Poverty and Equity Practice Africa Region World Bank Group Poverty and Equity Practice Africa Region World Bank Group TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA Poverty and Equity Practice Africa Region World Bank Group RIGHTS AND PERMISSIONS ACKNOWLEDGEMENTS The material in this work is subject to copyright. The report was led by Carolina Mejía-Man- Because The World Bank encourages dissemination tilla (TTL and Senior Economist, Poverty of its knowledge, this work may be reproduced, in and Equity GP). The team consisted of Cara whole or in part, for noncommercial purposes as Ann Myers (Consultant, Poverty and Equity long as full attribution to this work is given. GP), Besufekad Alemu (Consultant, Poverty and Equity GP), Irene Clavijo (Consultant, ATTRIBUTION Poverty and Equity GP), Kristen Hommann (Senior Economist, Urban GP), Kirill Vasiliev THE REPUBLIC OF UGANDA Please cite the work as follows: “World Bank. (Senior Education Specialist, Education GP), 2020. Tackling the demographic challenge in Joanna Dorota Juzon (Consultant, Education Uganda. Poverty and Equity Practice, Africa GP), Diana Sekaggya-Bagarukayo (Education Region. ©World Bank.” Specialist, Education GP), Innocent Mulind- wa (Senior Education Specialist, Education © 2020 The World Bank All queries on rights and licenses, including GP), Rogers Ayiko (Senior Health Special- 1818 H Street NW, Washington DC 20433 subsidiary rights, should be addressed to World ist, Health GP), Rogers Parmen Enyaku Telephone: 202-473-1000; Bank Publications, The World Bank Group, 1818 (Consultant, Health GP), Collins Chansa Internet: www.worldbank.org H Street NW, Washington, DC 20433, USA; fax: (Senior Economist, Health GP), Julia Men- 202-522-2625; e-mail: pubrights@worldbank.org. sah (Operations Officer, Health GP), Grace Nyerwanire Murindwa (Consultant, Health SOME RIGHTS RESERVED DESIGN AND LAYOUT GP), Brendan Michael Hayes (Senior Health Specialist, Health GP) and Emi Suzuki (De- This work is a product of the staff of The World .Puntoaparte Editores mographer, DEC). Bank. The findings, interpretations, and conclu- www.puntoaparte.com.co sions expressed in this work do not necessarily This report was prepared under the guidance reflect the views of the Executive Directors of The PHOTOGRAPHIES of Carlos Felipe Jaramillo (Country Direc- World Bank or the governments they represent. tor), Antony Thompson (Country Manager, The World Bank does not guarantee the accuracy of © World Bank AFMCG) and Pierella Paci (Practice Manager, the data included in this work. The boundaries, col- Poverty and Equity GP). The peer reviewers ors, denominations, and other information shown Shutterstock Vlad Karavaev / Black Sheep for this report were Paolo Belli (Program Lead, on any map in this work do not imply any judgment Media / Sarine Arslanian / Thipwan / Tim Hook HDN) and Elina Pradhan (Economist, Health on the part of The World Bank concerning the legal / Andreas Marquardt / DstockIL / Pecold / Adam GP). The team is grateful for their constructive status of any territory or the endorsement or accep- Jan Figel / The Road Provides / emre topdemir / comments and for guidance received by Allen tance of such boundaries. Adam Jan Figel Dennis (Program Leader, EFI). INTRODUCTION Page 12 CHARACTERIZING UGANDA’S DEMOGRAPHIC TRANSITION Page 16 CONTENTS POPULATION PROJECTIONS FOR UGANDA: 2020 – 2060 Page 38 SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS Page 56 IMPLICATIONS FOR LABOR MARKET AND POVERTY INDICATORS Page 134 EXECUTIVE (sustained from 2025 onwards), will cost around scenario, the poverty incidence rate under the US$979 million in 2020, increasing to around U$1.90 a day is set to reach 30 percent by 2060, US$2,224 million in 2060. At the same time, resulting in a total of 31 million poor Ugandans. A SUMMARY the cost of providing universal health coverage similar pattern is expected for the vulnerable pop- (starting in 2020) goes up from US$1,366 million ulation: while the share of vulnerable people as to US$3,092 between 2020 and 2060 (a two-fold a proportion of the total population will decline, increase compared to the ‘Business as Usual’ sce- the number of vulnerable people will increase by nario in both years). In terms of infrastructure 2060, with important implications for the future investment, by 2060 the annual cost of guaran- of social protection programs. teeing energy, water and sanitation access for all, under the medium population variant, amounts to Several important overarching policy recom- US$14,784 million, in comparison to US$4,890 mil- mendations are derived from the analysis of the Uganda is entering a key stage of its US$683 to US$1,546 million between lion in 2020 (a 650 percent increase relative to the implications of the projected population trends in development path given the expect- 2020 and 2060. Finally, the annual ex- ‘Business as Usual’ scenario for 2060). The cost of Uganda over the period 2020-2060 presented in ed demographic trends over the next penditure on infrastructure (investment the ‘Improved Equilibrium’ is reduced significant- this report, as follows: 40 years. The population of Uganda, in electricity and water and sanitation) ly when the low-fertility scenario is considered, currently estimated at 46 million, will will increase from US$1,302 million and the cumulative savings reach US$9.5 billion in IMPROVING THE at least double between 2020-2060. to US$2,223 million during the same education, US$6 billion in health, and US$5 billion EFFICIENCY OF PUBLIC Under the most likely scenario, the period. When the low-variant fertility in infrastructure investment. total population of Uganda will reach scenario is considered, which implies a EXPENDITURE AND 104 million people by the year 2060. lower population growth over the next Beyond the fiscal effort in public service pro- ENHANCING THE Around 70 percent of that population 40 years, there are considerable cumu- vision, the projected population trends will EFFECTIVENESS OF PUBLIC will be of working age, and about half lative savings in terms of the fiscal effort. require a profound transformation of Uganda’s INVESTMENT PROJECTS of the population will reside in urban More specifically, these savings amount labor market. This will be necessary to accommo- centers (a two-fold increase in the pro- to US$5.5 billion, US$3.0 billion, and date the expected 1.1 to 1.2 million new entrants To tackle the demographic challenge, an empha- portion of urban population observed US$2.3 billion respectively in education, per year (on average) into the labor force over sis on the efficient utilization of public resources today). Considering that the country health, and infrastructure investments, the next 40 years. While an effort to curb fertil- is required. This can be implemented not only in already encounters multiple challeng- showing that there is a fiscal payoff as- ity will lessen the burden moderately (by about terms of how the budget is allocated across sectors es in the delivery of basic services, sociated with efforts to reduce fertility. 400,000 people in 2060) the flow of people into and the importance of social spending (particularly specifically in education, health, elec- the labor market will still represent a consider- in education and health) for Uganda’s development, tricity and water and sanitation, and in Not surprisingly, the effort required able challenge. More importantly, the task not but also in terms of how efficiently the money is managing public investment projects, under an ‘Improved Equilibrium’ only comprises the creation of more jobs but also spent within each of the sectors. In recent years, serving the projected population and scenario is substantial, which in turn higher-quality jobs. That is why, over the next few Uganda has shifted towards infrastructure spend- improving the current access levels will results in larger savings when pop- decades, Uganda requires policies to accelerate its ing at the expense of investing in social sectors such not be an easy task. ulation growth is curbed by lower economic transformation, which is the basis for as education and health, resulting in a decade long fertility. For Uganda to reach the goals the creation of formal wage jobs in productive decline in real per capita allocations. However, only The fiscal effort under a ‘Business as the government has set for itself (which sectors of the economy. by investing in human capital will the country en- Usual’ scenario will be considerable, are aligned with the SDGs), the status sure that future cohorts of Uganda’s population with large potential savings in an out- quo or ‘Business as Usual’ is inadequate The projections also indicate that Uganda is attain their full productive potential, increasing look based on reduced fertility.1 Under and will not ensure that the young pop- still more than a decade away from attaining productivity and boosting economic growth. In a ‘Business as Usual’ scenario (which ulation accumulates the human capital low middle-income status and that the coun- terms of the efficiency of spending, enhancing the maintains current access levels)2 , the required to reach its full productive try will still be grappling with a considerable functioning of the national government’s financ- 1. All costs are expressed in 2020 US$. total cost of providing education services potential. As expected, achieving these number of poor in 40 years. While the poverty ing of local government service delivery could be will increase from US$834 million in goals will require a sizeable fiscal effort. incidence rate under the international pover- attained by restoring the adequacy and equity of 2. Based on the medium-fertility 2020 to about US$1,001 million in 2060. More specifically, to provide universal ty line is expected to decline steadily between allocations of funds for service delivery, and by scenario from the UN World Similarly, the expenditure needed to pro- access to primary and secondary edu- 2020-2060, the number of poor is projected to creating the right incentives for local government Population Prospects, considered vide basic health services to the growing cation and improve the quality of these increase due to the pace at which the population to leverage institutional and service delivery per- the most likely scenario. population will more than double from services according to the ESSP targets is expanding. Under the most likely population formance (World Bank, 2020b). TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA EXECUTIVE SUMMARY 6 7 In terms of public investment proj- in Uganda in the medium term. Thus, ects, the infrastructure investment the GoU must develop a strong policy needed to tackle the demographic framework for sustainable Public Private challenge requires improving Public Partnerships (PPPs) in all sectors, in or- Investment Management (PIM). Poor der to close financing gaps and achieve PIM has been a major issue for the GoU higher levels of spending efficiency. PPPs and has constrained its ability to govern will allow upfront private financing for and address inadequate infrastructure capital investment and crowd-in addi- gaps across the board. Moving forward, tional sources where user charges can be there is a need to enhance the effective levied. At the same time, moving towards management at all stages of the public results-based budgeting (and away from investment project cycle, from inception input-based budgeting) can contribute to the management and maintenance of to raise the efficiency of all sectors. The the completed asset. Reforms to public GoU has started to pilot this approach The last condition is particularly im- capacity and remit to plan, regulate, course interconnected as, for example, finance management systems in Uganda in some areas (such as education and portant for cities outside Kampala, given and coordinate infrastructure and pri- empowering women is important to have ensured that some parts of the PIM health), and it will be important to mon- that they are highly dependent on trans- vate investments. Not even 20 percent ensure their access and use of modern cycle meet several good practice stan- itor what benefits and what challenges fers from the central government and of Uganda’s private land is registered contraceptive methods and employment dards. Nonetheless, there are still issues are surfacing, to assess the possibility of have little revenue coming from other and titled, and much of the remaining opportunities. However, it is clear that with prolonged procurement processes, scaling it up. Finally, it will be import- sources, which limits their ability to non-private land is constrained by the educating girls is fundamental, with deficiencies in the “quality at entry” of ant to assess the level of integration and plan and invest over the medium term. complex customary land regulations. clear and large demonstrated positive projects, implementation challenges coordination of the different levels of ser- Addressing these issues is essential to spillovers on the other three pillars. (such as cost escalations, time-overruns, vice provision in each sector, to identify Promoting urban development will be the successful implementation of the contract disputes, abandonment of proj- were reforms may be needed. important to generate labor demand. recommendations above. Improving the educational attain- ects, poor quality of some completed Local economic development strategies ment of girls is essential for Uganda’s projects), and limited maintenance that MANAGING for urban centers can help attract the ENHANCING THE future. Enhancing the educational can be addressed. private sector and promote job oppor- opportunities for adolescent girls is URBANIZATION AGENCY OF GIRLS tunities for the growing population. It crucial, as it boosts their productive is also important that secondary cities AND WOMEN and economic prospects in the future, ASSESSING THE Adequate urban planning and smart with high potential for job creation in maximizing their income when they en- SERVICE DELIVERY urban policies will be crucial for agro-processing, other manufacturing, Educating girls, empowering wom- ter the labor force. In addition, higher both providing services and creating and tourism be able to receive special en, enhancing access to reproductive educational attainment among young MODELS AND job opportunities for the growing attention. In addition, youth employ- health services and employing wom- women delays childbearing, lowers the INVOLVING THE population of Uganda. Knowing that ment policies and programs offered at en are four crucial actions in order chances of early marriage and empow- PRIVATE SECTOR by 2060 half of the population will re- the moment are heavily tilted towards for Uganda to harness the potential ers them as adult women, which in turn side in urban centers, cities and their self-employment and solving supply-side benefits of the demographic transi- lowers fertility over time. In addition, An assessment of the sustainability of governments in Uganda can commit constraints, such as “skills gaps.” Instead, tion. Building on the Global Agenda improvements in women’s level of edu- the service delivery model in each sec- to lead urban development and not fol- they can increasingly equip young work- Council on the Demographic Dividend, cation not only affects fertility rate but tor can contribute to ensure broader low it. Thus, it is important to ensure ers for entry into urban waged jobs and the World Bank’s Africa Human Capi- also improves child health outcomes. access and higher quality in the provi- that cities, and in particular secondary help target the opportunities offered tal Plan emphasizes that enhancing the More educated mothers are more likely sion of education, health, energy and cities, have: i) a functioning land admin- through regional developments and in- agency of girls and women is essential to use prenatal and child health services water and sanitation services. This in- istration system with formal, readily dustrial policies (Merotto, 2019). for countries to accelerate their human improving child health outcomes, which cludes examining the potential benefits transferrable land rights; ii) the capacity capital development and take advan- has positive consequences for human of the participation of the private sector, to plan and regulate infrastructure and Improving land administration and tage of the demographic transition. capital. Ensuring the completion of at as well as studying the financing model private investments and; iii) predict- land rights is a key component of It underscores the 4Es framework: i) least the first cycle of secondary edu- of each sector. It is very unlikely that the able financial resources from the local urban development. Ugandan cities educating girls, ii) empowering wom- cation is particularly important, which public sector alone will be able to bear government transfer system to manage can aim to improve (i) the land admin- en, iii) enhancing access and use to requires raising the quality of education the burden of the fiscal implications of the operation and maintenance of infra- istration system with formal, readily reproductive health services and iv) at the primary level and promoting girls’ tackling the demographic challenge structure assets. transferrable land rights, and (ii) the employing women. These efforts are of transition into secondary education. TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA EXECUTIVE SUMMARY 8 9 Alternative programs and ensuring certain basic tiveness of modern methods of contraception and infrastructure conditions can also contribute to the risk of pregnancy when using no method, but higher levels of education for girls. Other measures, also on the supply side, through the strengthening such as incentivizing girls to remain in school or go and expansion of existing sexual and reproductive back to school if they dropped out, can also enhance health services. Particular attention to vulnerable their educational attainment. Additionally, programs adolescent girls and women, such as those belong- that provide life skills can boost the effectiveness ing to households in the lower end of the income of the traditional curriculums in building knowl- distribution and those residing in rural areas, can edge, through gains in self-esteem and confidence. have long-run payoffs. In addition, the provision of Building schools closer to where girls live, or as an counseling and tailored information can contribute alternative, providing adequate modes of trans- to maintaining a high usage rate of modern con- portation to schools, and ensuring separate water, traception methods, as inconsistent use is a major sanitation and hygiene facilities for girls is also im- issue throughout Uganda. portant, as is the need to reduce the risk of violence and sexual harassment at school (World Bank, 2017). Employment opportunities need to be expanded for women, and where possible, addressing gen- Empowerment implies that all individuals have der gaps in productivity can further empower the same right and freedom to make decisions women. Promoting the employment of women, regarding all aspects of their lives. Opportunities and young women in particular, has the potential to should not depend on gender or other differentiat- benefit Uganda both directly, through the produc- ing aspects, and each woman should have a saying tive contribution to the economy, and indirectly, in her education and employment, as well as when by lowering fertility. At the same, participating in and who to marry. Empowerment is closely linked a productive activity and earning income helps to cultural and social norms, and interventions to raise the bargaining power of a woman in her aimed at changing them can be planned not only household, increasing her decision-making pow- for girls and women, but also for boys and men, er. Going forward, the country not only needs to which still play a central role in the household adopt measures to ensure that there are enough decision making process. There are encouraging job opportunities for the future generations, as results from a Rwandan program that engaged men already discussed, but also that these are inclu- in groups to discuss gender and power relations, sive of women. Moreover, Ugandan women who with positive results in terms of shared decision are currently participating in the labor market are making for couples (Doyle at al. 2018), that could be segregated to less productive sectors, and even piloted in Uganda. While these changes may take the cases where that is not the case, they tend to longer to materialize, they are key to complement have lower productivity compared to their male the efforts in other areas. counterparts, explained either by their inability to access capital and productive inputs and, in some Increasing the agency of women in Uganda cases, hire sufficient labor. Policy interventions also requires expanding the reproductive aimed at encouraging women to engage in activities health/family planning programs available that are more profitable (albeit typically male dom- at the moment, accompanied by information inated), ensuring they have access to finance, and campaigns. Interventions on this front can fo- that they are equipped with the appropriate skills cus both raising the demand for family planning, -both technical and non-cognitive-, can enhance by improving women’s information on the effec- women’s agency. TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA EXECUTIVE SUMMARY 10 11 Uganda is currently at a develop- opportunities, the country could embark Moreover, if Uganda mental crossroad. Despite impressive in a demographic disaster rather than wants to improve progress in the last two decades, there is a demographic dividend, where social still a long road to the ambitious agenda and political instability is coupled with human development that the country has set for its future: intergenerational poverty traps. outcomes, it must the Uganda 2040 Vision foresees a mid- expand the coverage dle-income country with the majority of According to the most up-to-date its citizens living in urban areas, having population projections, the number and access to basic smaller families, and earning income of Ugandans will at least double by services for the general in non-agricultural sectors. In reality, the year 2060. The population of Ugan- the country’s economic growth is still da, currently estimated at 46 million, population, which will inadequate for Uganda’s lower mid- is projected to increase to around 100 be difficult with the dle-income status ambitions, about 42 million under the most likely scenario. projected demographic percent of the population live with less Considering that the country already than U$1.90 a day, and households are encounters several issues in terms of trends. The benefits of a unable to cope with negative shocks. the efficient delivery of basic services demographic transition In addition, structural transformation (such as education, health, electricity are not guaranteed for remains limited and the majority of the and water and sanitation) and the effec- population still survives on subsistence tive management of public investment every country, and they agriculture or is engaged in small infor- projects at all stages of the cycle in all can only take place if mal enterprises, with low productivity sectors, this poses significant challenges there is widespread and few prospects for growth. in the medium-term. In addition, Ugan- da is characterized by one of the lowest access of the population The way in which the country ad- revenue mobilization rates in East Af- to high quality services dresses the demographic challenge rica and thus the fiscal space to expand A in terms of education, over the next 40 years will be crucial public expenditure is very limited. for its future. Demographic transitions health, electricity and provide unique opportunities but also The demographic composition of the water and sanitation. pose considerable challenges for low country is also projected to change income countries. Uganda is entering over the medium term, with a consid- the early transition stage of its demo- erable expansion of the working-age graphic transition. With the right set population. Between 2020 and 2060, of policies and conditions in place, the the number of working-age Ugandans is country has the opportunity to capital- expected to increase by about 50 million, ize on some of the possible benefits of which represents a 20-percentage point this demographic transition.3 However, increase in the ratio of working-age in- in the absence of widespread access dividuals to the total population and to basic services and infrastructure of translates into an average of 1.1 to 1.2 quality, as well as productive economic million entrants to the Ugandan labor market every year. Considering the cur- INTRODUCTION 3. Often referred to as the economic dividend: rent outlook of Uganda’s labor market, where most workers are engaged in sub- a period of sustained economic growth and sistence agriculture or self-employment improvement of the human development activities characterized by low pro- indicators. The textbook examples of coun- ductivity, generating enough economic tries that were able to reap the economic opportunities for the population bulge is dividend are the East Asian countries such perhaps one of the biggest challenges of as Thailand, Vietnam and South Korea. the expected population trends. TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA A. INTRODUCTION 12 13 The current status quo in terms of cover- hanced Equilibrium’ scenario. For the The analysis quantifies the magnitude of age and access to some of the basic services ‘Business as Usual’ scenario, it quanti- the effort required for Uganda to serve the is limiting the human capital accumulation fies the inputs and fiscal effort that will growing population in the coming years, of young Ugandans, constraining their in- be needed over the period 2020-2060 as well as the considerable resources come generating ability and curbing their to provide the projected population that will be needed to increase the lev- productivity in the future. At the moment, with basic education, health, electric- el of access (and quality) of the services a child born in Uganda today will be only ity and water and sanitation services, provided. It also presents detailed policy 38 percent as productive when she grows under current levels of access and qual- recommendations in each sub-sector for up as she could be if she enjoyed complete ity, and highlights the savings derived this to be feasible and sustainable. It is education and full health, according to the from an effort to reduce fertility (under clear that an expansion of the services at HCI (Human Capital Index)—one of the the low-fertility variant). At the same scale will not be possible without signifi- lowest levels in the world.4 Expanding time, the report explores how select cant reforms in each sector to improve the access and improving the quality of basic labor market and poverty indicators efficiency of the service delivery, as well services will be crucial if Uganda wants to evolve under the two fertility variants, as an overall shift in the management of move from the current lackluster equilib- highlighting labor demand as one main public investment and an increased role rium to a brighter development path. It challenges going forward. of the private sector in Uganda. will also be necessary to ensure that the growing population bulge will be engaged The report also explores the effort The report is organized as follows. in productive economic activities that are required to ensure that future gen- Chapter 2 characterizes Uganda’s adding value to economy. erations of Ugandans enjoy higher progress in terms of its demographic levels of access to basic services, a transition, describes its most recent Against this background, this report necessary condition to fully benefit demographic trends and shows some examines what it would take for from a demographic transition. How- correlates of the country’s fertility lev- Uganda to tackle the demographic ever, as discussed above, the ‘Business els. The population projections under challenge in the next four decades. as Usual’ scenario is insufficient to reap the medium and low-fertility variants Firstly, it assesses Uganda’s current benefits from the demographic transi- for the period 2020-2060 are presented context in terms of its demographic tion and to achieve the transformation in Chapter 3, while Chapter 4 explores transition, exploring some correlates of that the country aspires to. Thus, the the implications in terms of service fertility—one of the most determinant report also quantifies the inputs and fis- delivery of these projections under the factors of any country’s demograph- cal efforts that will be needed for each ‘Business as Usual’ and ‘Enhanced Equi- ic transition. Secondly, it presents sector under an ‘Enhanced Equilibrium’ librium’ scenarios. Based on these same population projections for the period scenario. This scenario involves univer- projections, Chapter 5 presents the ex- 2020-2060, at the national level as well sal access for each sub-sector, in line pected trends of select labor market and as disaggregated by specific age groups with both the Sustainable Development poverty indicators. and for urban and rural areas, under Goals (SDGs) and national sectorial two different fertility assumptions: goals, and in the case of education sec- the medium and low-variant scenarios tor, it also involves improving the quality 4. The HCI looks across health, education, as defined by the UN Population Divi- of services provided.5 The difference be- nutrition and skills and is calculated sion. The bulk of the analysis focuses tween considering the medium-fertility based on five indicators: probability of on the implications of the population variant in comparison to the low-fertili- survival to age 5; children’s expected projections under the two population ty variant is also explored here, pointing years of schooling; quality of learning; variants in terms of: i) service delivery at the savings derived from further re- adult survival rate, and the proportion in the education and health sectors, ducing fertility. of children who are stunted. ii) infrastructure investment focusing on power, water supply and sanitation The main objective of the report is 5. The low quality of education has sub-sectors, and iii) select labor market to inform policymakers and relevant been a major concern in Uganda, and poverty indicators, under both a stakeholders in Uganda as they formu- and largely explains the low scores ‘Business as Usual’ scenario and an ‘En- late their plans for the medium term. in the HCI mentioned above. TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA A. INTRODUCTION 14 15 B.1 More than 90 percent of global poverty is concentrated in pre- and DEMOGRAPHIC early-demographic transition coun- DIVIDEND: THE tries. These countries typically have a swelling working-age population that POTENTIAL OF lags in key human development indi- DEMOGRAPHIC cators and continues to register rapid population growth. In these countries, TRANSITIONS the transition to lower fertility creates a golden opportunity to raise living standards. Additionally, the changes in the population structure that come In a demographic transition, a country from a demographic transition are not B evolves from a state of high mortality inherently good or bad and present and high fertility into one with low both opportunities and challenges for mortality and low fertility, with a pe- realizing economic growth in the forms riod of rapid population growth first of demographic dividends. triggered by declining mortality rates, followed by declining fertility rates. Usually, going through the different The transition is associated with changes demographic transition stages par- in the demographic indicators, with one allels the model path of economic of the most salient changes being the de- development, and socio-economic cline of the total dependency ratio — the outcomes are expected to improve, ratio of the dependent to the working-age generating a demographic dividend. population6 (Bloom & Williamson, 1998; When the country experiences rapid Bruni, Rigolini, & Troiano, 2016). The economic expansion and considerable demographic transition can be divided gains in terms of human capital indi- CHARACTERIZING into four stages: i) the pre-transition, ii) early transition, iii) late transition, and cators, the demographic transition can be strongly linked to a demographic UGANDA’S iv) post-transition. The pre-transition dividend. Given the continuous nature stage is characterized by high fertility, of demographic transitions, the de- and high mortality with an elevated child mographic dividend is usually broken DEMOGRAPHIC dependency ratio. The early transition is defined by a lowering mortality rate, an down into two parts called the first and second demographic dividends TRANSITION increasing share of the working-age pop- and parallel the late-transition stage ulation, and a lower child dependency (Schneidman et al., 2016). Policies and ratio. The late transition stage exhibits a planning can make a critical difference lowering fertility rate and an additional in how demographic change affects lowering child dependency ratio. In the progress toward development and B.1 DEMOGRAPHIC DIVIDEND: THE POTENTIAL Page 17 post-transition stage, with both low fer- economic growth (Global Monitoring OF DEMOGRAPHIC TRANSITIONS tility rate low mortality rates, there is a Report, 2015/2016). As Canning et al. rapid increase in the elderly population, a (2015) highlights, policies can be geared B.2 WHERE DOES UGANDA STAND IN TERMS Page 20 decreasing share of the working-age pop- to realize and maximize the payoffs ulation, and a fertility rate that is below from each of the two dividends associ- 6. More specifically, it is defined as the ratio OF DEMOGRAPHIC TRANSITION? the replacement level. ated with a demographic transition. of those 0-14 and 65+ over those 15-65. TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA B. CHARACTERIZING UGANDA’S DEMOGRAPHIC TRANSITION 16 17 The first demographic dividend, characterized by the effect this bulge cohort. As these groups move into productive jobs, the East Asia (UNICEF, 2020). For this to occur, the bulged cohort contribute to social, political, and economic instability, while of increased labor supply on the economy, is brought on by a gains in terms of household and national income are materialized. has accumulated enough assets by old-age in ways that decrease also leading to deteriorating social capital (Global Monitoring decreasing fertility rate and a lower child dependency ratio. costs for the incoming younger cohorts (Canning et al. 2015). Report, 2015/2016). At the same time, sustained investments in Higher survival rates in a given cohort, followed by fewer children The second demographic dividend takes place as this education and health are necessary as the young population ex- in the next, produces a population bulge that translates into a high- cohort, which experienced significant human capital in- As mentioned, these gains or dividends are not automatic, pands, ensuring not only widespread access but also the delivery er labor supply and a lower dependency ratio (Schneidman et al., vestments, moves through the economic life cycle, and and they will only materialize if certain necessary condi- of high-quality services that guarantee human capital accumu- 2016). The effect is magnified when lower fertility allows women saves. These individuals are more productive than previous tions are met for the country. To facilitate the payoff from the lation. If investment per capita (or per student in the case of to enter the labor force at a higher proportion. Those who enter generations and with higher earnings and more disposable in- first economic dividend, there needs to be an overall increase education) declines, the bulge cohort will not be able to access working-age can produce for their households and themselves come, savings go up considerably (Figure 1). If these savings are in economic opportunities and jobs. The full economic benefits high-productivity jobs. Similarly, for the second dividend to take while having fewer children than previous cohorts (Figure 1). This translated into productive investments in key sectors, there is a will only be achieved if there is strong labor demand as well as place, the country must have a mature financial sector in place, allows society — both households and the government — to invest second boost to economic growth and national income, which entrepreneurial opportunities. If this is not the case, large cohorts capable of absorbing savings, and redirecting those savings in a education and health resources in fewer children (Kalemli-Ozcan, in turn results in higher living standards for the entire popula- of youth entering working-age will face unemployment and un- productive way. This should take place over a long time-horizon Ryder, & Weil, 2000), increasing human capital for the members of tion (Schneidman et al., 2016), as observed in some countries of deremployment. The discontent from this group can potentially to avoid future generations bearing the economic burden. FIGURE 1. Two distinct phases of the demographic dividend can be harnessed WHAT First dividend Second dividend CHARACTERIZES A DEMOGRAPHIC Total DIVIDEND? dependency Source: Adapted from ratio Schneidman et al. (2016) 6 5 4 3 2 1 Permanent incrase in capital-worker ratio Accumulation of human and output per capita and physical capital More disposable income to save More production More people working More people of working age Good policies are necessary at all ateps TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA B. CHARACTERIZING UGANDA’S DEMOGRAPHIC TRANSITION 18 19 B.2 Kenya stand out as countries that have experienced FIGURE 2A. Pre-dividend a significant decline in the fertility rate from 6.8 to DEMOGRAPHIC TRENDS / Early-dividend PHASES OF DEMOGRAPHIC TRANSITION 2020 WHERE DOES UGANDA 4.3 for the former, and from 5.4 to 3.5 for the latter. Late-dividend In both cases, success is attributed to widespread Source: World Bank STAND IN TERMS access to family planning and modern methods of Post-dividend OF DEMOGRAPHIC contraception. As pointed out by many before, Ugan- da will not be able to reap the demographic dividend TRANSITION? Total Fertility Rate without drastically reducing its fertility rate (Uganda 8 National Planning Authority, 2014; UNICEF, 2020). As a result of sustained levels of high fertility, With its decreasing mortality rate and an in- Uganda’s population has been growing much creasing share of working-age individuals, faster than in other parts of Africa, limiting in- Uganda Uganda is entering the early transition stage come per capita growth. Between 2000 and 2018, TFR 5.1, LE 62.5 of its demographic transition (Figure 2a). Since Uganda had a consistently higher population growth 2013, when Uganda Vision 2040 was launched, rate than other countries in the Sub-Saharan Africa Uganda has moved from the pre-transition stage region (Figure 2e). In fact, it was the only country 6 (high mortality, high fertility) to the early transition in the region above a 3 percent annual population stage, with dropping child mortality rates and de- growth threshold since the year 2000. If the current creasing, but relatively high fertility rates—depicting rate of approximately 3.7 percent, according to the a very young age structure—and is preparing to real- 2019 UN World Population Prospects, is sustained ize payoffs from the first demographic dividend. As over time, the population will double in less than in most of Sub-Saharan Africa, Uganda’s mortality 20 years. High fertility also results in a high de- rates have fallen rapidly over the past 50 years, ex- pendency ratio, estimated at 92 in 2016 (UN World cept for a rise during the 1990s related to an increase Population Prospects, 2019), implying that for every 4 in AIDS-related deaths (Canning et al., 2015). Since 100 economically active persons, there are 92 de- 2000, the crude death rate in Uganda has more than pendents. This dependency ratio is markedly high halved, from approximately 18 to 7 annual deaths relative to both in the Sub-Saharan Africa and East- per 1,000 persons (see Figure 2b). This decrease is ern Africa regions in 2020, which had an average of due to an increased focus on health services which 82.0 and 80.9 dependency ratios, respectively (UN have led to a decrease in child mortality, while also World Population Prospects, 2019). Uganda remains raising life expectancy. From 2000 to 2020, the child the country with the second-highest dependency mortality rate for children under age 5 fell from 136 ratio in Eastern Africa, after Somalia. to 96 per 1,000 live births. Similarly, life expectancy 2 increased from 44 to 63 years in the same period The window for savings or having a lifecycle in- (UN World Population Prospects 2019). come surplus is very limited in Uganda. Estimates suggest a very short window of an income surplus of However, Uganda’s high fertility rates threaten between 10‐12 years that starts at age 42 and ends payoffs from the first demographic dividend. at age 56, in which a person is earning more income Currently, fertility in Uganda remains high at 5 than they consume (see Figure 2d). Given that the life births per woman, the tenth highest TFR in the expectancy is estimated at 65 years of age, the win- world (with all top ten countries in the Africa re- dow to accumulate wealth for Ugandans remains very 0 gion). While this represents a decline since 2000, it small. Uganda fares poorly compared to countries like remains one of the highest rates in East Africa (see Ghana and South Africa with a lifecycle surplus of Figure 2c). Tanzania’s fertility rate follows closely about 27 years that starts at age 33 and ends at age 60 50 60 70 80 90 at 4.9, with a less pronounced decline when com- years (National Population Council of Uganda, 2018). pared to Uganda between 2000 and 2019. On the Therefore, the urgency to accelerate Uganda’s demo- other hand, during the same period, Ethiopia and graphic transition is even more pronounced. Life expectancy (years) TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA B. CHARACTERIZING UGANDA’S DEMOGRAPHIC TRANSITION 20 21 FIGURE 2B. Curde Birth Rate FIGURE 2C. Uganda Malawi DEMOGRAPHIC TRENDS / Curde Death Rate DEMOGRAPHIC TRENDS / Sub-Saharan Africa Rwanda UGANDA’S DEMOGRAPHIC TRANSITION TOTAL FERTILITY RATE Total population Ethiopia Tanzania Source: UN population Division, World Population Prospects 2019 Revision Source: UN population Division, World Population Prospects 2019 Revision Kenya Curde Birth-Death Rates per 1,000 population Total Population in Millions Births per women 60 100 9 90 50 50 8 49 49 49 49 80 46 70 7.1 7.1 7.1 7.1 7.1 40 7 6.9 38 6.7 60 6.4 32 30 50 6 27 5.8 40 23 22 20 20 5.0 5 30 18 17 17 16 11 20 10 4 7 6 5 6 5 10 0 0 3 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA B. CHARACTERIZING UGANDA’S DEMOGRAPHIC TRANSITION 22 23 FIGURE 2D. 2,500,000 DEMOGRAPHIC TRENDS / 2,000,000 AGE PROFILE OF PER CAPITA LIFECYCLE DEFICIT: 1,500,000 UGANDA, 2017 Source: UNHS 2012/13 1,000,000 and 2016/17 500,000 0 -500,000 Curde Birth Rate -1,000,000 Curde Death Rate Total population -1,500,000 0 10 20 30 40 50 60 70 80 90+ Age (years) FIGURE 2E. 4.1 DEMOGRAPHIC TRENDS / ANNUAL POPULATION 3.7 3.7 3.7 GROWTH RATE 3.6 Source: World Bank 3.5 Development Indicators 3.4 3.2 3.2 3.2 3.2 3.2 3.2 3.2 3.2 3.2 3.1 Uganda 2.6 Sub-Saharan Africa Ethiopia Kenya 2.1 Malawi Rwanda Tanzania 1.6 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA B. CHARACTERIZING UGANDA’S DEMOGRAPHIC TRANSITION 24 25 B.2.1 da (UDHS 2016). In the case of married stable at 1.5 to 1.6 in 2000/01, 2006, and from 31 percent in 2000/01. While the graphic transition, ensuring that DETERMINANTS women, this represents a considerable 2011 before decreasing to 1.1 in 2016 (Fig- age-specific fertility rate in Uganda peaks women have access to modern con- OF FERTILITY increase since 2000/01, when around only ure 3b).7 Rural areas show much greater among women who are 20 to 24 years old traception methods, while also finding 18 percent reported use. However, unmar- observed and wanted fertility rates, 5.9 and at 260 births per 1,000 women (Figure ways to support their consistent use, ried, sexually active women, report the 4.6 respectively, while urban areas exhibit 3d), it picks up even around age 15 to 19, can advance in making this a reality. A Both proximal and distal determinants same rate of using modern contraceptive a significantly lower desired and observed with 132 births per 1,000 women within greater level of access to family planning of fertility are highly relevant in Ugan- methods as ten years before (2006), at birth rates (4.0 observed and 3.4 wanted in those ages.8 In comparison, in 2016, the methods can be attained by expanding da, and both can be affected by policy. 47 percent (Figure 3a). Access to modern urban), as well as a lower gap of only 0.6 adolescent fertility rate per 1,000 women reproductive health/family planning Given the crucial role fertility rates play contraceptives, rather than knowledge of, births (UDHS 2016). (for girls ages 15 to 19) was 123 births in programs available at the moment, ac- in a country’s demographic transition, it seems to be the issue: while knowledge is Zambia, 119 births in Tanzania, 77 births in companied by information campaigns, is important to understand the different largely universal, 28 percent of currently As expected, disparities in the use of Kenya, 69 births in Ethiopia, and only 39 following the example of countries in the factors that affect Uganda’s fertility rate married women and 32 percent of sexual- modern contraception exist between births in Rwanda. Among Uganda’s peer region like Kenya and Ethiopia. Differenc- and how they have evolved in recent ly active unmarried women have an unmet different groups of women. For exam- countries, only Malawi was higher at 135 es in terms of access and use underscore years. Proximal determinants of fertility need for family planning. Similarly, close to ple, among currently married women, the births per 1,000 women ages 15 to 19 (Fig- the need for targeted support for vulner- are those factors that directly affect fertil- 60 percent of women in the reproductive use of modern contraception is higher for ure 3e).9 This is associated with the high able women belonging to households in ity, such as the use of contraception, age of age group reported at least one problem in those in urban areas (41 percent) than for rate of early marriage, as the average age the lower end of the income distribution first birth, and the intervals between births accessing healthcare for themselves. those in rural areas (33 percent). While at first marriage stood at about 20 years and residing in rural areas. In terms of (Madhavan & Guengant, 2013). Distal this is partly explained by the gap in the old in 2011 (World Bank, 2019). Similarly, consistent use, Uganda’s contraceptive determinants of fertility are background availability of health services between in 2020, the age-specific fertility rate for discontinuation rate10 is very high, stand- characteristics (mainly of the mother and Moreover, only 5 percent rural and urban areas in Uganda, it also females aged 15 to 24 in Uganda stood at ing at about 45 percent for all methods. her household) that influence fertility, even of public and private demonstrates how distal factors influence approximately 119, well above the aver- if they do not directly affect it (Bongaarts, fertility. Among all women of different ed- age for Sub-Saharan Africa was 104 (UN J. 1978). These include child mortality healthcare providers ucation levels, those who are married and World Population Prospects 2019). 7. This gap is analogous to the difference in rates, female education, and socio-eco- in Uganda provide those who are sexually active but unmar- mean ideal family size between married nomic status and cultural norms (such as adolescent and youth- ried tend to have a comparable need for The birth interval between children men and women, who were 15 to 49 years early age at marriage). Not surprisingly, family planning services (around half of also affects a woman’s total fertility old, where married men report wanting 6 the distal and proximal determinants are friendly sexual and women), the higher a woman’s education rate and as of 2016, the median interval children while married women report de- intertwined. For example, the use of con- reproductive services, level, the more likely her family planning was 31.9 months for Ugandan women. siring on average 5.1 children (DHS, 2016). traception is usually higher for women needs are met with modern contraceptive This median birth interval is just a small which contributes to the with higher levels of education and from methods. About 21 percent of all women increase over the median interval of 29.2 8. Age-specific fertility rates are calculated wealthier backgrounds. Furthermore, the high teenage pregnancy with no education have their family plan- months in 2000/01, demonstrating little for the 3 years prior to the survey based on variation along each of these dimensions rate, an important ning needs met with modern methods change in the last sixteen years. Birth in- women’s birth histories. The total fertility points to opportunities for policy interven- whereas 34 percent of women with more tervals increase with the mother’s age – the rate is the number of children a woman determining factor of the tions and programs that can contribute to than a secondary education do (Figure 3c). median birth interval among women ages would have by the end of her childbearing further reduce fertility in Uganda. overall high fertility. This suggests that education may play an 40-49 (38.6 months) is 14.4 months longer years if she had children at the contem- important role in the ability of women to than the interval among women ages 15- poraneous age-specific fertility rates. The relatively wide gap between de- meet their family planning needs. 19 (24.2 months). There is also significant PROXIMAL DETERMINANTS sired fertility and observed fertility variation in birth intervals by the area of 9. World Development Indicators. OF FERTILITY highlights the limited access to family The median age of the mother at her residence, with the median birth interval planning. On average, all Ugandan women first birth also affects fertility because in urban areas being 5.1 months longer than 10. The contraceptive discontinuation rate is The adoption of modern contraceptives between the ages of 15 and 49 still have one it widens the window for childbearing that of rural areas (36.2 versus 31.1 months). defined as the percentage of contraceptive in Uganda has been slow and lags sig- more child than what they report as their years and the number of children a This partly explains why the birth interval use episodes discontinued within 12 nificantly relative to other countries in ideal family size. The total wanted fertility woman will ultimately have. Currently, is such an important factor in a woman’s months. This is usually measured for the region. According to the UDHS 2016, rate in Uganda declined slightly from 5.3 it stands at 19.2 years in Uganda, one of total fertility rate. women 15 to 49 years old, with episodes of about 35 percent of married women and children in 2000/01 to 5.1 children in 2006, the lowest in the world (UBOS and ICF, contraceptive use counted for each woman 47 percent of sexually active unmarried to 4.7 children in 2011, and then to 4.3 chil- 2018). As of 2016, one quarter (25 per- Given that reducing fertility is a nec- in the 5 years preceding the survey. There- women (ages 15-49 in both cases) use any dren in 2016. In the same period, the gap cent) of Ugandan women age 15-19 had essary condition to materialize the fore, each woman can have more than one modern form of contraception in Ugan- between wanted and actual fertility was begun childbearing, just a small decline opportunities presented by a demo- contraceptive use episode (DHS, 2016). TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA B. CHARACTERIZING UGANDA’S DEMOGRAPHIC TRANSITION 26 27 This highlights the importance of FIGURE 3A. Unmarried women ACCESS AND USE OF CONTRACEPTION, FERTILITY TRENDS / counseling and information needs PERCENTAGE OF SEXUALLY ACTIVE, AGE 15-49, WOMEN CURRENTLY USING A Married women for Ugandan women to maintain MODERN CONTRACEPTIVE METHOD Source: World Bank the use of these methods. Both the access to modern methods and support on how to effectively use these methods can primarily support adolescent girls, which will help to 2001 44% 18% 2006 47% 18% delay childbearing and increase the intervals between births. 2011 44% 26% 2016 47% 35% FIGURE 3B. Observed Fertility ACCESS AND USE OF CONTRACEPTION, FERTILITY TRENDS / Wanted Fertility OBSERVED AND DESIRED FERTILITY OVER TIME FOR ALL WOMEN AGE 15-49 Source: World Bank 2001 6.9 5.3 2006 6.7 5.1 2011 6.2 4.7 2016 5.4 4.3 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA B. CHARACTERIZING UGANDA’S DEMOGRAPHIC TRANSITION 28 29 FIGURE 3C. ACCESS AND USE OF CONTRACEPTION, FERTILITY TRENDS / NEED AND USE OF MODERN Need for Family Planning Need Met by Modern Methods CONTRACEPTION BY EDUCATION AMONG WOMEN AGE 15-49 Source: World Bank 50% 52% 48% 54% 21% 27% 30% 34% No education Primary Secondary More than education education Secondary education Births per 1,000 women FIGURE 3D. 350 ACCESS AND USE OF CONTRACEPTION, FERTILITY TRENDS / 289 300 URBAN AND RURAL AGE- 270 SPECIFIC FERTILITY RATES 260 OF WOMEN AGE 15-49 247 250 Source: UDHS 2016 229 209 197 194 200 162 145 152 147 150 132 102 92 100 73 67 47 50 Rural 14 2 14 National 2 14 Urban 1 0 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 Age rate TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA B. CHARACTERIZING UGANDA’S DEMOGRAPHIC TRANSITION 30 31 FIGURE 3E. Births per 1,000 women ACCESS AND USE OF CONTRACEPTION, 250 FERTILITY TRENDS / CROSS-COUNTRY 239 AGE-SPECIFIC 232 FERTILITY RATES Source: UN population Division, World Population Prospects 2019 Revision 200 189 150 131 119 100 77 Uganda 50 Ethiopia Malawi Kenya Tanzania 16 Rwanda Sub-Saharan Africa 0 15-19 20-24 25-29 30-34 35-39 40-44 45-49 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA B. CHARACTERIZING UGANDA’S DEMOGRAPHIC TRANSITION 32 33 DISTAL DETERMINANTS her first birthday, and 1 in 21 does not sur- ed women, not only have lower family Socio-economic conditions at the lower socioeconomic levels, persistently survival of children allows households OF FERTILITY vive until his or her fifth birthday (Figure size preferences, but also on average household level are strongly correlat- higher child marriage rates in rural ar- to attain their desired family size easier, 4a). Uganda can continue efforts to lower have greater knowledge and access to ed with differences in fertility rates. eas contribute to higher fertility rates. contributing to a reduction in fertility. While the under-five child mortali- the mortality rates for children under the modern contraceptive methods and use Fertility rates at the lowest wealth quin- Around 27 percent of women ages 15-19 Similarly, enhancing the educational op- ty rate in Uganda has dropped, over age of five, as this would allow couples to these to delay childbearing as the time- tile are almost two times higher than in rural areas have begun childbearing, portunities for adolescent girls is crucial, six percent of Ugandan children still plan fewer births and properly invest in cost associated with raising children is those at the highest wealth quintile – 7.1 as compared with 19 percent of young as this delays childbearing and promotes do not reach their fifth birthday. The children who have a much greater like- high relative to less educated women children versus 3.8 children (DHS 2016). women in urban areas. At the same time, higher rates of modern contraceptive under-five child mortality rate is a distal lihood of surviving, reducing the total (Canning et al., 2015; Global Monitor- This is related to the fact that modern the TFR ranges from a low of 3.5 children use. Particularly important is ensuring determinant of fertility as evidence sug- fertility rate and positively contributing ing Report 2015/2016). In 2016, among family planning method needs are sat- per woman in the Kampala region to a the completion of at least the first cycle gests that families have more children to a demographic dividend. all sexually active Ugandan women isfied 39 percent of the time for women high of 7.9 children per woman in the of secondary education, which requires when they expect that some proportion of with no education, only 42 percent had in the lowest quintile, while this need is Karamoja region (DHS 2016). raising the quality of education at the pri- their children may not survive into adult- Higher levels of female education their family planning needs satisfied met for more than half of the women in mary level and promoting the transition hood (Canning et al., 2015). As of 2018, are consistently associated with by modern methods, compared to 63 the highest wealth quintile (Figure 4c). While improvements in child mor- into secondary education. Enhancing infant mortality in Uganda was 34 deaths lower fertility rates in Uganda. As percent of Ugandan women who were tality, female education, and the productive and economic opportunities per 1,000 live births, a 61 percent decline of 2016, women with no education had highly educated (DHS 2016). Similarly, Similarly, the area of residence (ru- income-generating ability of wom- for young women will also contribute to from 88 deaths per 1,000 live births in the highest total fertility rate (6.4 births more years in school can delay the age at ral versus urban, and region) is also en are worthy goals in themselves, lower fertility, as this delays the age of 2000/01. In 2018, the under-five mortal- per woman), while women with higher which a woman gets married and begins correlated with differing levels of they are also critical in realizing the marriage and childbearing, and empow- ity was 46 deaths per 1,000 live births, an education had the lowest fertility rate childbearing. Among women ages 25-49, fertility. As expected, rural areas show potential benefits of demographic ers women in terms of their reproductive even more pronounced decline from 148 (3.6 births per woman) (Figure 4b). As the reported median age at first birth in- greater observed and wanted fertility transitions. Uganda can sustain the decisions. Likewise, as mentioned by deaths per 1,000 live births in 2000/01. mentioned above, this can be elucidat- creases from 18.3 years among women rates compared to urban areas, 5.9 and 4.6 progress made in reducing child mortal- Shneidman et al. (2016), a shift in social However, at these levels and despite the ed in the relationship between female with no education to 24.4 years among versus 4.0 and 3.4 respectively, – a differ- ity by continuing to invest in programs norms that are limiting gender equality remarkable progress, 1 in 30 Ugandan education and many of the proximal those with more than a secondary-level ence of almost two children (Figure 4d). that reduce morbidity and malnutrition, in Uganda is a longer-term necessary children still dies before reaching his or determinants of fertility. More educat- education (in 2016) (DHS 2016). Together with lower access to healthcare and by investing in high-quality health change that relates to all of the above services and family planning as well as care services. As discussed, the improved distal determinants. Deaths per 1000 live births FIGURE 4A. 160 RELATIONSHIP BETWEEN 148 140 FERTILITY 134 AND DISTAL DETERMINANTS 120 117 OF FERTILITY / CHILD MORTALITY 102 100 RATES OVER TIME 89 88 Source: World 81 80 Bank Development 77 72 Indicators 67 63 60 59 56 50 51 45 46 40 40 37 34 20 Under age 5 mortality 0 Infant mortality 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA B. CHARACTERIZING UGANDA’S DEMOGRAPHIC TRANSITION 34 35 FIGURE 4B. Observed Fertility FIGURE 4C. Demand for Family Planning RELATIONSHIP BETWEEN FERTILITY AND DISTAL DETERMINANTS OF FERTILITY / Wanted Fertility RELATIONSHIP BETWEEN FERTILITY AND DISTAL DETERMINANTS Demand Satisfied by Modern Methods OBSERVED AND DESIRED FERTILITY BY EDUCATION OF FERTILITY / CORRELATION BETWEEN DEMAND FOR FAMILY Source: World Bank PLANNING AND WEALTH QUINTILE Source: World Bank 7 6.4 52% 53% 52% 49% 49% 6 5.9 31% 31% 28% 25% 5.2 5 19% 4.6 4.4 4 3.7 3.6 3.2 3 Lowest Second Middle Fourth Highest wealth quintile wealth quintile wealth quintile wealth quintile wealth quintile FIGURE 4D. RELATIONSHIP BETWEEN FERTILITY AND DISTAL DETERMINANTS OF Observeed Fertility 2 FERTILITY / OBSERVED AND DESIRED FERTILITY BY URBAN STATUS Wanted Fertility Source: UDHS 2016 1 4.0 3.4 5.9 4.6 0 No education Primary Secondary More than education education Secondary education Urban Rural TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA B. CHARACTERIZING UGANDA’S DEMOGRAPHIC TRANSITION 36 37 C.1 ilar demographic and socioeconomic traits, there are four additional fertility METHODOLOGY variants: low, high, constant-fertility and instant-replacement-fertility.14 In all of them, mortality and migration assump- This study is based on the UN Pop- tions remain constant while the fertility ulation projections for the period assumption varies. For this study, in addi- 2020-2060. The population projections tion to the medium-variant projection, we that are used to quantify the challenge focus on the low-variant projection, which in terms of service delivery and fiscal assumes that total fertility is projected to effort that Uganda faces over the next remain 0.5 births below the total fertility 40 years are based on the World Popu- in the medium-variant. The low fertility lation Prospects 2019, produced by the scenario implies an additional effort in C UN Department of Economic and Social terms of fertility reduction that results Affairs, Population Dynamics.11 These in lower population growth rates (when projections are constructed using all compared to the medium-variant), but available sources of data on population still a feasible endeavor if multi-sectoral size and levels of fertility, mortality, and policies (including the education, health, 11. The information is publicly available international migration for Uganda. They and social protection sectors, among oth- at https://population.un.org/wpp/. use parametric functions to model the ers) are implemented (UNICEF, 2020), demographic change (Wilmoth, 2015), addressing the factors that influence fer- 12. That is why in the case of Uganda, and the parameters are modeled using a tility rates as discussed in Chapter 2. the projections differs from those Bayesian Hierarchical model that draws of the Uganda Bureau of Statistics information from other countries to es- Age-specific, as well as urban and rural (UBOS) - https://www.ubos. timate parameters distributed around population projections, were adapt- org/explore-statistics/20/. the world average.12 The projections ed or developed for the purposed of cover different scenarios, with varying the study. Based on the age-specific 13. In other words, the projections POPULATION assumptions on fertility, mortality, and (for every 1-year group from 0 to 100) consider the trajectory of access and migration. The most widely recognized projections of the medium-variant, we use to family planning and repro- is the medium-variant projection, which were able to generate the equivalent for ductive health services observed in PROJECTIONS FOR corresponds to the median of several thousand distinct trajectories of each the low-variant. Age-specific population projections are needed to estimate the de- country in recent years as well as that of countries with similar conditions. UGANDA: demographic component. The method mographic challenge in terms of service considers the experience of each country, delivery and investment in the education 14. Constant and instant-replacement-fer- while also reflecting uncertainty about and health sectors, analyzed in Chapter tility are very unlikely scenarios. Also, 2020 – 2060 future changes based on the past expe- rience of other countries under similar 4. Similarly, the total population projec- tions for both variants were combined we discard focusing on the high fertility variant in order to simply the fiscal and conditions (United Nations, World Pop- with the projections of the World Ur- physical requirement projections. ulation Prospects, 2019).13 banization Prospects 2018, also produced by the UN Department of Economic and 15. More specifically, the urbanization C.1 METHODOLOGY Page 39 We focus on the medium and low-vari- Social Affairs, Population Division, to rate projected in the World Urban- ant scenarios of the population (and compute total population projections for ization Prospects 2018 for the period C.2 POPULATION PROJECTIONS Page 40 population density) projections. In urban and rural areas for the period 2020- 2020-2060 were used to derive total 2020-2060 addition to the medium-variant projec- 2060.15 These are key when assessing the population projections for urban and tion, which is the most likely scenario challenge of the demographic trajectory rural areas in Uganda. This implies based on Uganda’s historic trends as well of the country in terms of infrastructure that the urbanization rate is constant as the experience of countries with sim- investments, as discussed in Chapter 4. across the medium and low-variants. TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA C. POPULATION PROJECTIONS FOR UGANDA: 2020 – 2060 38 39 C.2 POPULATION PROJECTIONS 2020-2060 According to the projections, the population of As of 2020, Uganda is estimated to have approx- Uganda will double by the year 2060. Under both of imately 229 people per square kilometer (km). the scenarios considered (medium and low-variants), This will increase to between 456 to 518 people the population will increase two-fold over the next per square km by 2060 (Figure 6a) relative to 40 years. While there are currently around 46 mil- 2020, a 126 and 97 percent increase under the lion Ugandans in the country, by 2060, this number medium and low-variant projections, respec- is expected to increase to 104 million under the me- tively. Consistent with the increased population dium-variant, and to 90 million under the low-variant density, a larger number of people will live in ur- (Figure 5a). Considering that coverage and access to ban centers. In 2020, about 34 million people are basic public services remain very low in Uganda, this living in rural areas of the country, while urban portends critical challenges to the development path centers hold approximately 11 million people, of the country in the medium-term. The projections close to 25 percent of the population. Accord- assume that population growth rates will slow sig- ing to the projections, by 2060 close to half of nificantly over the next few years. More specifically, Ugandans will be residing in urban areas, and the it is estimated to reach its peak in 2020, at around 3.6 urban population will surpass the rural popula- percent, and then decline subsequently: reaching a tion. Under the medium-variant estimates, there rate in 2060 of 1.3 percent in the medium-variant and will be 53 million people in urban areas and 51 less than 1 percent under the low-variant (Figure 5b). million people in rural areas by 2060 (Figure 6b). However, under the low-variant projection, there Population growth will result in higher levels will be 46 million people in urban areas while 44 of population density, and by 2060 about half million people will be living in rural parts of the of the population will reside in urban centers. country (Figure 6c). TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA C. POPULATION PROJECTIONS FOR UGANDA: 2020 – 2060 40 41 FIGURE 5A. Estimates FIGURE 5B. Estimates TOTAL POPULATION TRAJECTORY / Medium Variant TOTAL POPULATION TRAJECTORY / Medium Variant TOTAL POPULATION POPULATION GROWTH RATE Low Variant Low Variant Source: UN population Division, World Population Prospects 2019 Revision Source: UN population Division, World Population Prospects 2019 Revision Total Population (millions) Population growth rate (%) 120 4% 3,6 104 100 3,3 97 3,2 3,2 89 90 3% 2,9 86 82 80 81 2,6 74 2,5 76 2,5 70 2,3 67 2,2 64 2,1 60 59 2% 1,9 58 1,9 52 1,7 1,7 46 1,5 1,5 40 38 1,3 1,3 32 1,0 1% 28 0,8 24 20 0 0% 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA C. POPULATION PROJECTIONS FOR UGANDA: 2020 – 2060 42 43 FIGURE 6A. Persons per square km POPULATION DENSITY AND URBANIZATION / 600 POPULATION DENSITY Source: UN population Division, World Population Prospects 2019 Revision 518 484 500 448 452 431 410 408 400 373 381 335 352 297 322 300 291 262 259 229 191 200 162 139 Estimates Medium Variant 118 Low Variant 100 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA C. POPULATION PROJECTIONS FOR UGANDA: 2020 – 2060 44 45 FIGURE 6B. Rural POPULATION DENSITY AND URBANIZATION / Urban MEDIUM-FERTILITY VARIANT POPULATION BY LOCATION Total Source: UN population Division, World Population Prospects 2019 Revision 104 89 74 59 46 34 24 20 27 34 41 29 46 28 50 39 53 51 4 7 11 2000 2010 2020 2030 2040 2050 2060 FIGURE 6C. Rural POPULATION DENSITY AND URBANIZATION / Urban LOW-FERTILITY VARIANT POPULATION BY LOCATION Total Source: UN population Division, World Population Prospects 2019 Revision 90 81 70 58 46 34 24 20 27 34 40 18 44 26 45 36 44 46 4 7 11 2000 2010 2020 2030 2040 2050 2060 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA C. POPULATION PROJECTIONS FOR UGANDA: 2020 – 2060 46 47 The projections point to an increase is projected to rise by 2060. While the 0 to 14 population will determine the in the working-age population, with working-age population is projected to level of support and investments the important implications for the eco- increase by a factor of two from 2020 to working-age population must make to nomic development of Uganda, as 2060, the senior population is set to in- provide care for these youth. Under the will be analyzed in Chapter 5. The crease by a factor greater than six in that medium-variant scenario, the proportion age structure of the country will change same period. of youth in the population falls from 46 dramatically over the next 40 years. to 28 percent from 2020 to 2060 (Fig- The working-age population is set to ure 7c). However, under the low-variant increase from 24 million in 2020, to 69 While the absolute scenario, this number falls much more and 63 million Ugandans by the year numbers will remain significantly—from 46 to 23 percent of 2060 under the medium and low-vari- low in 2060, at about 6 the population within the same time ants (Figure 7a and b). At the same (Figure 6d). This seemingly small five time, the youth population (ages 0 to million seniors in both the percentage point difference between 14 years) is projected to change from 21 medium and low variants, the two projections suggests how an ad- million in 2020 to either (i) increase to this could strain the health ditional effort in reducing fertility can approximately 29 million by 2060 un- yield benefits in terms of investments der the medium-variant projection or care system in Uganda as in the age 0-to-14 youth population. (ii) remain at 21 million in 2060 under seniors often have higher Additionally, by 2060, the dependency the low-variant projection. As is well ratios will differ considerably under health care needs. known, a greater number of children the two fertility scenarios: 49.9 under are associated with a higher child de- the medium-variant and 42.6 under the pendency ratio, which is translated At the same time, this underlines the low-variant scenario (Figure 7e).16 As into fewer resources for households importance of a financial system in a discussed previously, a lower dependen- for both livelihood and productive pur- position to promote long-term savings, cy ratio boosts household and national poses. As such, policies that strive to at so that seniors can sustain themselves income as long the working-age popu- least constrain the youth (0 to 14 years) from the income saved and invested lation is engaged in economic activities population growth to the lower end of during their working-age years (Global that provide adequate levels of income. the population projections can assist Monitoring Report 2015/2016). Uganda in deriving a greater economic dividend in the coming years. The proportion of youth and the el- 16. The dependency ratio is calculated derly will influence the dependency by taking the sum of persons in the 65+ Not surprisingly, as life-expectancy ratio, which will drop considerably and 0-14 age groups and dividing this rises, under both the medium and in the medium term. As a percent- sum by the number of persons in the low-variants, the age 65+ population age of the overall population, the age age 15-64 working-age population. TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA C. POPULATION PROJECTIONS FOR UGANDA: 2020 – 2060 48 49 FIGURE 7A. 65+ FIGURE 7B. 65+ POPULATION PROJECTIONS BY AGE / 15 - 64 POPULATION PROJECTIONS BY AGE / 15 - 64 MEDIUM-VARIANT POPULATION BY AGE LOW-VARIANT POPULATION BY AGE 0 - 14 0 - 14 Source: UN population Division, World Population Prospects 2019 Revision Source: UN population Division, World Population Prospects 2019 Revision Millions Millions 120 100 6 90 6 63 100 4 69 55 80 4 59 2 45 70 80 2 46 1 60 34 1 60 50 34 1 24 1 40 24 1 40 16 1 30 16 28 29 1 27 11 23 23 23 24 21 21 1 11 21 20 20 16 16 12 12 10 0 0 2000 2010 2020 2030 2040 2050 2060 2000 2010 2020 2030 2040 2050 2060 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA C. POPULATION PROJECTIONS FOR UGANDA: 2020 – 2060 50 51 FIGURE 7C. 2% 2% 2% 2% 3% 4% 6% POPULATION PROJECTIONS BY AGE / MEDIUM-VARIANT AGE PROPORTION OF POPULATION Source: UN population Division, World Population Prospects 2019 Revision 48% 49% 52% 57% 61% 65% 67% 50% 49% 46% 41% 36% 31% 28% 0 - 14 15 - 64 65+ 2000 2010 2020 2030 2040 2050 2060 2% 2% 2% 2% 3% 4% 6% FIGURE 7D. POPULATION PROJECTIONS BY AGE / LOW-VARIANT AGE PROPORTION OF POPULATION Source: UN population Division, World Population Prospects 2019 Revision 48% 49% 52% 58% 64% 68% 70% 50% 49% 46% 39% 33% 28% 23% 0 - 14 15 - 64 65+ 2000 2010 2020 2030 2040 2050 2060 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA C. POPULATION PROJECTIONS FOR UGANDA: 2020 – 2060 52 53 FIGURE 7E. Dependency POPULATION PROJECTIONS BY AGE / 120 DEPENDENCY RATIO Source: UN population Division, World Population Prospects 2019 Revision 108 106 103 100 99 92 83 81 80 75 71 68 62 61 60 58 55 54 51 50 49 47 44 42 40 20 Estimates Medium Variant Low Variant 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA C. POPULATION PROJECTIONS FOR UGANDA: 2020 – 2060 54 55 D.1 ary level, up to 57 percent of total enrolled students are in private schools according to EDUCATION 2019 Government data (Uganda Bureau of SERVICES Statistics, 2019). Therefore, a greater pro- portion of students are in private schools as education level increases. Evidence from across Africa shows that As is common in East Africa, Uganda each year of education produces a pri- follows a 2-7-4-2 education system. vate rate of return on investment17 of The system encompasses two years of 12.5 percent, and a far higher return for D pre-primary education and seven years females (14.5 percent), than males (11.3 of primary education, at the end of which percent) (Patrinos, 2018). The Universal pupils take the Primary Leaving Exam- Primary Education (UPE) reform of 1997, ination (PLE). The PLE then determines the Universal Secondary Education (USE) the transition to the four-year cycle of reform of 2007, and the curriculum re- lower secondary education. Those who forms at primary and secondary are thus complete lower secondary education key policy moves aimed at enhancing the transition to the two-years of either up- sustainable growth and poverty reduction per secondary education or technical and for Uganda. The implementation of these vocational education (TVET). reforms is aligned to the National Develop- ment Plan (NDP) along with Vision 2040. The delivery of primary education is decentralized, with the overall respon- Despite impressive early gains in sibility devolved to Local Governments achieving universal access to primary SERVICE DELIVERY (LGs). Thus, LGs are responsible for education, the specific sub-sectors’ appointing, promoting, and transferring performance is mixed and plagued by primary teachers and managing associ- equity-related issues. The Gross En- IN LIGHT OF ated payrolls. Post-primary education is semi-decentralized with the central level rollment Rate (GER) at the pre-primary level is still very low (16 percent) and UGANDA’S POPULATION being responsible for teacher management almost exclusively constituted of middle and the supervision function. The Ministry and high-income families in urban areas. of Education and Sports (MoES) is fully Survival rates are low, with only three 17. ‘The concept of the rate of return on PROJECTIONS responsible for policy, guidance, and over- sight of local government service delivery. out of ten pupils who start Primary One (P1) completing the seven-year primary investment in education is very similar to that for any other investment. It is a cycle, explained by high repetition and summary of the costs and benefits of the The participation of non-state actors drop-out rates at the lower primary lev- investment incurred at different points has allowed the expansion of access to el (Ministry of Education and Sports, in time, and it is expressed in an annual D.1 EDUCATION SERVICES Page 57 education in a cost-effective way, com- 2019). GER at the secondary education (percentage) yield’ (Patrinos, 2018). pared to investing in expanded public level has stagnated for a decade, at below D.2 HEALTH SERVICES Page 88 provision. For example, pre-primary 30 percent. 18In addition, low attainment 18. This is much lower than some education is fully managed, funded and de- of basic education constrains access to regional counterparts: Burundi and D.3 INVESTMENT IN INFRASTRUCTURE Page 109 livered by non-state actors. At the primary post-secondary education, where GER Tanzania at 57 percent; while the level, over 30 percent of the total enrolled is estimated at 6.4 percent, compared to Democratic Republic of Congo registers pupils are in private schools. At the second- the sub-Saharan average of 9.4 percent. 61 percent (World Bank, 2019). TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 56 57 Education quality and efficiency Teacher absenteeism, jections, for the provision of education D.1.1 The above parameters have underlying B That the supplied textbooks will be used related issues continue to charac- weak pedagogical skills, services. Simultaneously, it shows METHODOLOGICAL quality assumptions that are in line with optimally during the teaching-learning terize the education sector. The low management skills the implications of enhancing access CONSIDERATIONS the ‘minimum standard’ requirements process including sufficient focus on 2018 National Assessment of Progress and quality in service in-line with the set by the MoES. These assumptions are children with disabilities; in Education (NAPE) results show that of school administrators, GoU medium-term goals. The analysis INDICATORS CONSIDERED the following: only half of the learners in primary as well as inequitable focuses on the primary and secondary ed- C That the constructed gender and schools demonstrated the expected ucation sub-sectors between 2020-2060, A That deployed teachers at the ra- disability friendly classrooms will numeracy and literacy competencies teacher deployment as they account for the majority of the an- The following adjustable parameters tios stated for each scenario will be in line with agreed strategy and for grades 3 and 6 in 2018. Low learn- norms are some of nual education budget. The graph below regarding the access and quality in the ed- have the requisite qualifications construction norms; ing outcomes continue in lower the underlying issues frames the magnitude of the challenge, ucation sector were considered throughout to instruct at the stated levels of secondary education. For instance, showing the projections of the school-age the projection exercise: i) enrolment (GER) education, deployed equitably D That all inspectors will be facilitated to according to NAPE (2014), there was (MoES, 2020). population under the medium-variant. [access], ii) pupil to teacher ratio [proxy for across schools and districts with quality assure teaching-learning pro- a continued decline in the proportion The primary and secondary school-age quality], iii) pupil to textbook ratio [proxy considerations of gender equity, cesses in schools and regularly provide of S2 students rated proficient in En- This section examines the implications population will grow at a similar pace and for quality], iv) pupil to classroom ratio and that teachers will be provid- feedback to schools as expected. glish in the period 2008 – 2013 (World of population growth, under the low peak in 2060, reaching 13 and 11 million [proxy for quality], and iv) inspectors per ed with Continuous Professional Bank, 2019b). and medium-variant population pro- respectively (Figure 18). school ratio [proxy for quality]. Development support; 19. Projections are based on a period 1960-2020 20.5 24.3 27.1 29.1 30.1 29.9 29.1 27.9 27.1 FIGURE 8. Millions SCHOOL AGE 14 POPULATION 13.3 13.1 GROWTH 12.7 12.9 PROJECTIONS 19 12.1 2020-2100, 11.8 12 12.1 11.1 11.3 MEDIUM-VARIANT / 11.1 ANNUAL POPULATION 10.7 10.6 10.4 GROWTH RATE 10 Source: Author’s 10.9 calculations based on UN 9.6 population Division, World Population Prospects 8 2019 Revision 9.4 8.5 6 5.6 5.7 5.5 5.3 6.6 5.4 5.1 4.9 4.9 4 4.5 Pre-primary (3-5) 2 Primary (6-12) Lower and upper secondary (13-18) 0 2020 2030 2040 2050 2060 2070 2080 2090 2100 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 58 59 Two scenarios were considered for the exercise, and for each one, the input requirements (number Scenario 1, called ‘Business as Usual’, The exercise uses the public and teachers, textbooks, classrooms, or the baseline scenario, models the private share of enrolment based on implications of population growth the ESSP 2020-25 predictions. Ac- and inspectors) and the associated under the assumption that the cording to the ESSP, the public share fiscal implications were estimated for current access and quality remain of enrolment at the primary level will constant over time. In other words, slightly decrease in the period 2020 to both the medium and low-variant the baseline scenario looks at how much 2030. The share of public enrolment population projections. However, it will cost the GoU to finance the sys- at the secondary level, however, will tem, without any improvements to the increase significantly from 43 in 2019 to simplify the presentation, the education sector between 2020 to 2060. to 62 percent by 2030. This is due to implications in terms of inputs are Table 1 shows the key parameters used to model Scenario 1. the government’s decision to withdraw from a PPP arrangement that provided presented only for the medium- financial support to the private sector in the form of per capita subsidies. As fertility variant. These indicators come a result of this policy change, the ab- from the most recent sorption of enrolment by the public data collection exercise20 sector will increase significantly in the medium term. (2019), conducted by the Uganda Bureau of The ‘Expansion with quality’ scenar- Statistics (UBOS) and the io is expected to improve ‘Learning Adjusted Years of School’ (LAYS), a Ministry of Education and key component of the Human Capi- Sports (MoES). tal Index (HCI). While on average a child in Uganda completes 7 years of Scenario 2, called ‘Expansion with Qual- school by the age 18, this figure drops ity’, models the implications for the to only 4.5 years if quality of learning system, given gradual improvements outcomes is factored in (2.5 years are in key sector parameters related to considered ‘lost’ due to poor quality access and quality. The model assumes of education). It is expected that in- that the first set of improvements will be creased learning achievement will realized by 2025 – this is when the Edu- result from the expansion of access to cation Sector Strategic Plan (ESSP) for secondary education (schooling), and the 2020-2025 period targets are set to be from improvements in teaching qual- achieved. The second set of improvements ity (learning). 21 are modelled to be introduced gradually until 2040 and then sustained until 2060. For both scenarios, the fiscal impli- 20. ‘Report on the master list of Improvements are aimed at bringing uni- cations are calculated using the four education institutions in Uganda’, versal primary and secondary education cost categories shown below (Fig- Uganda Bureau of Statistics (2019). access as well as significant improvements ure 9), and are expressed in 2019/20 in quality, which is in line with the reali- prices. The financial implications are 21. ‘Uganda should increase the LAYS zation of the SDG goals. Table 2 illustrates calculated for the public sector only, to up to 7.5 years in the medium how the targets for Scenario 2 are intro- thus presenting budgetary requirements term to catch up with its neighbors duced into the model over time. for the Government of Uganda. (Kenya currently scores 7.8). TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 60 61 TABLE 4A. SCENARIO 1- ‘BUSINESS AS ASUAL’ / PARAMETERS TO BE MAINTAINED AT THE CURRENT LEVEL FIGURE 9. (2019) IN THE PERIOD 2025-2060 COST CATEGORIES USED FOR CALCULATING Source: Author’s calculations FISCAL IMPLICATIONS Source: Author’s calculations Primary Education Secondary Education GER 132% 32% Pupil to teacher ratio (public) 52 21 Pupil to textbook ratio 4 7 • Classroms Pupil to clasroom ratio (public) 71 65 • Teacher housing Schools per inspector ratio 80 90 CAPITAL • ICT labs COSTS 1 • Latrines • Multifunctional science labs TABLE 4B. SCENARIO 2- ‘EXPANSION WITH QUALITY’ / ESSP TARGETS ACHIEVED IN 2025, ‘UNIVERSAL’ TARGETS ACHIEVED IN 2040 AND MAINTAINED UNTIL 2060 Source: Author’s calculations 2025 2030 2035 2040 2045 2050 2055 2060 ESSP ‘UNIVERSAL’ WAGE TARGETS TARGETS RECURRENT • Teacher salaries COSTS 2 • Inspectors Primary Education GER 123% 115% 107% 100% 100% 100% 100% 100% Pupil to teacher ratio 48.1 43.7 39.3 35 35 35 35 35 Pupil to textbook ratio 1.95 1.65 1.35 1 1 1 1 1 Pupil to clasroom ratio 65 57 48 40 40 40 40 40 Schools per inspector ratio 60 53 47 40 40 40 40 40 Public share of enrolment 66% 63% 63% 63% 63% 63% 63% 63% Secondary Education • Textbooks NON-WAGE GER 45% 53% 62% 70% 70% 70% 70% 70% RECURRENT 3 • Teacher training COSTS • Capitation grants Pupil to teacher ratio 18 16 14 12 12 12 12 12 Pupil to textbook ratio 5 4 3 2 2 2 2 2 Pupil to clasroom ratio 58 52 47 40 40 40 40 40 Schools per inspector ratio 60 53 47 40 40 40 40 40 Public share of enrolment 50% 62% 62% 62% 62% 62% 62% 62% TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 62 63 D.1.2 between now and 2040 (Figure 10c). This Considerable savings can be achieved ‘BUSINESS AS USUAL’: translates to an average of 350 new class- if policies aimed at curbing rapid MAINTAINING rooms per year. With no improvements in population growth are implemented. pupil to textbook ratio, the requirement Under the low-variant population pro- CURRENT ACCESS for textbooks26 will be on average 300,000 jections, the cumulative savings over the LEVELS and 200,000 every year for primary and period 2025-2060 could account to US$ secondary school children respectively 5.5 billion. This translates to an average INPUT REQUIREMENTS between now and 2040 (Figure 10d). annual saving of nearly US$ 137 million for primary and secondary sub-sectors Despite the fact that under the FISCAL IMPLICATIONS (Figure 11e). ‘Business as usual’ scenario no im- provements in terms of access and Reflecting input requirements, the quality are assumed22, considerable fiscal effort under the ‘Business as input requirements are needed to usual’ scenario will be considerable. In prevent a decline in key access and order to prevent a decline in key quality 22. Thus, the teacher-pupil ratio (for the quality indicators. With national enroll- and access indicators as a result of pop- public sector) is kept at the baseline ment more than doubling at the primary ulation growth, substantial investments level, as described in section 2. level (Figure 10a), the number of primary by the GoU will be required. Under the school teachers, hired by the government, medium-variant, the combined primary 23. By comparison, on average 1,213 of will need to increase from 135,000 in 2019 and secondary budgets will increase from new teachers accessed the government to 211,000 in 2040, and to 230,000 from US$ 480 million (2019) to an annual av- payroll annually between 2002 and 2016 then on to 2060 (Figure 10b). This trans- erage of US$ 853 million in the period of (Education Fact Sheet 2016, MoES). lates to over 3,600 new teachers per year 2025-30, and to an annual average of al- added to the government payroll between most US$1 billion in the period 2040-45 24. Number of teachers required for the now and 2040. 23Similarly, with a four-fold (Figure 11a) . While the main cost driver current staffing norms. This assumes increase in enrollment at the secondary for both primary and secondary will be that the non-public providers will level between 2015 and 2060 (Figure 10a) recurrent wages (Figure 11b and Figure continue to pay wages for teachers the number of lower and upper secondary 11c), infrastructure investments will also employed in non-government schools, teachers will need to more than double, take up a considerable portion of the who currently constitute 63 percent from 36,000 to 75,000 between 2019 and budget in the first 15/20 years, when the of the teachers in the country. 2060 (Figure 10b). 24 population pressures will peak. Lower overall costs for the secondary sub-sec- 25. Education Fact Sheet 2016, MoES. In order to maintain the same pupil to tor are due to the current private sector classroom ratio, the Government of share of enrollment. 26. Fiscal implications for textbooks take Uganda will need to step up its construc- into account a rate at which textbooks tion efforts and increase the number In GDP terms, this scenario will rep- are recycled between cohorts. of primary classrooms by 50,000 until resent 2 percent of GDP annually for 2040 and another 14,000 by 2060. This the period of 2020-25 (Figure 11d). This 27. A jump in the overall costs between translates to an average of over 1,600 represents a slight increase from 1.68 per- 2019 and 2020-25 for the baseline classrooms per year between now and cent in 2019 for primary and secondary scenario is explained by a steep growth 2060. By comparison between 2002 and sub-sectors (1.73 percent for the entire in the school age population growth 2016, the government constructed on education budget). While the cost (as % in the period 2020-25, as well as the average 2,32025 classrooms per year at of GDP) of delivering education services following: more investments into the primary level. In the case of the sec- to the growing population under the sta- teacher training being taken up by GoU ondary level, the construction burden for tus quo declines over time, the current (currently a large portion is funded government is lower, given that the partic- problems of the sector are not addressed, by GPE); and increase in capitation ipation of the private sector is larger: 7,000 which means that future generations will grants through the Uganda Intergov- classrooms will need to be constructed not reach their full potential. ernmental Fiscal Transfers Program. TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 64 65 FIGURE 10A. Primary FIGURE 10B. Primary PROJECTED EDUCATIONAL INPUTS UNDER THE PROJECTED EDUCATIONAL INPUTS UNDER THE Lower and upper secondary Lower and upper secondary BUSINESS AS USUAL SCENARIO / BUSINESS AS USUAL SCENARIO / NATIONAL ENROLLMENT PUBLIC TEACHERS Source: Author’s calculations Source: Author’s calculations 20 250 Millions of students Thousands of teachers 229.7 223.4 17.5 17.0 210.5 16.1 200 15 188.9 14.4 12.4 162.4 150 10 100 75.0 71.5 5 64.7 57.0 50 3.5 3.4 44.5 3.0 2.7 2.1 0 0 2020 2030 2040 2050 2060 2020 2030 2040 2050 2060 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 66 67 FIGURE 10C. Primary FIGURE 10D. Primary PROJECTED EDUCATIONAL INPUTS UNDER THE PROJECTED EDUCATIONAL INPUTS UNDER THE Lower and upper secondary Lower and upper secondary BUSINESS AS USUAL SCENARIO / BUSINESS AS USUAL SCENARIO / NUMBER OF PUBLIC CLASSROOMS NUMBER OF TEXTBOOKS IN PUBLIC SCHOOLS Source: Author’s calculations Source: Author’s calculations 200 40 Millions of textbooks Thousands of public classrooms 168.2 163.6 154.2 150 29.8 30 29.0 138.4 27.3 24.5 118.9 21.1 100 20 13.8 13.2 11.9 10.5 50 10 8.2 23.1 24.2 20.9 18.4 14.4 0 0 2020 2030 2040 2050 2060 2020 2030 2040 2050 2060 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 68 69 FIGURE 11A. Primary FISCAL IMPLICATIONS UNDER THE ‘BUSINESS AS Lower and upper secondary USUAL’ SCENARIO (5-YEAR AVERAGE) / AVERAGE ANNUAL TOTAL COST UNDER THE MEDIUM-FERTILITY VARIANT Source: Author’s calculations Millions of USD 700 659 658 653 636 645 605 579 600 565 500 400 337 343 330 321 319 301 288 300 268 274 200 158 100 0 2020 2025 2030 2035 2040 2045 2050 2055 2019 2025 2030 2035 2040 2045 2050 2055 2060 Budget TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 70 71 FIGURE 11B. Non-wage recurrent FISCAL IMPLICATIONS UNDER THE ‘BUSINESS AS USUAL’ SCENARIO (5-YEAR AVERAGE) / Capital AVERAGE ANNUAL COST FOR PRIMARY EDUCATION (MILLIONS OF USD) Wage recurrent Source: Author’s calculations 636 579 605 565 179 306 193 329 204 348 216 367 80 57 53 53 2020 2025 2030 2035 2025 2030 2035 2040 646 653 659 658 225 383 231 394 236 402 239 407 38 28 21 12 2040 2045 2050 2055 2045 2050 2055 2060 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 72 73 FIGURE 11C. Non-wage recurrent FISCAL IMPLICATIONS UNDER THE ‘BUSINESS AS USUAL’ SCENARIO (5-YEAR AVERAGE) / Capital AVERAGE ANNUAL COST FOR SECONDARY EDUCATION (MILLIONS OF USD) Wage recurrent Source: Author’s calculations 301 274 288 268 100 118 114 133 124 145 132 154 50 27 19 15 2020 2025 2030 2035 2025 2030 2035 2040 338 343 318 330 140 163 147 171 152 177 155 181 15 12 9 7 2040 2045 2050 2055 2045 2050 2055 2060 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 74 75 FIGURE 11D. % of GDP FIGURE 11E. Med primary FISCAL IMPLICATIONS UNDER THE ‘BUSINESS AS FISCAL IMPLICATIONS UNDER THE ‘BUSINESS AS USUAL’ Low primary USUAL’ SCENARIO (5-YEAR AVERAGE) / SCENARIO (5-YEAR AVERAGE) / COST OF ‘BUSINESS AS USUAL’ SCENARIO UNDER COST SAVINGS OF LOW VERSUS MEDIUM POPULATION VARIANT Med secondary THE MEDIUM-FERTILITY VARIANT Source: Author’s calculations Low secondary Source: Author’s calculations 2020 2.0% 2025 Millions of USD 3,500 3,293 3,290 3,264 3,226 3,181 3,027 3,000 2025 2,894 2030 1.7% 2,826 2,721 2,608 2,620 2,603 2,586 2,481 2,500 2,332 2030 1.5% 2035 2,000 1,685 1,715 2035 1.3% 2040 1,650 1,592 1,505 1,441 1,500 1,341 1,367 1,394 1,393 1,379 1,386 1,367 2040 1.1% 2045 1,000 2045 1.0% 2050 500 2050 0.9% 2055 0 2055 2060 0.8% 2025 2030 2035 2040 2045 2050 2055 2060 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 76 77 D.1.3 bring down the number of over and un- place 192,000 classrooms for primary FISCAL IMPLICATIONS not too distant from what regional peers ‘IMPROVED der-aged pupils in the system. 28This will schools in order to meet the classroom invest in education.29 EQUILIBRIUM’: represent considerable efficiency gains to pupil ratio target of 40 by 2040. This The fiscal effort needed to enhance for the sector, as resources will be spent translates to an average of 3,650 primary access and improve the quality of the The government can reduce the finan- EXPANSION WITH across a larger number of pupils, instead classrooms per year. Similarly, an ad- education service delivery is consid- cial burden considerably if policies QUALITY of ‘reinvesting’ in a smaller number of ditional 87,000 new secondary school erable. In the ‘Expansion with Quality’ aimed at reducing population growth students or spent unproductively on a classrooms will be required between scenario, the combined (primary and are implemented. If the low-variant INPUT REQUIREMENTS primary school drop-out. At the same 2020 and 2040 in order to reduce the secondary levels) average annual bud- population projections are used under the time, enrollment in secondary education pupil to classroom ratio (Figure 12c). At get will need to double from US$ 480 ‘Expansion with Quality’ assumptions, the As discussed above, the second scenar- will increase four-fold between 2020 and the same time, the government will need million in 2019 to US$979 million in the cumulative savings over the period 2025- 28. Such as strengthening the early io ‘Expansion with quality’ assumes 2060 (Figure 12a), and thus, the number to supply nearly twice as many books for period 2020-25 (Figure 13a). In terms 2060 will sum to over US$ 9.5 billion, childhood education and timely a set of reforms, as proposed by the of teachers for public schools will also primary education in 2060 compared of the education budget, the expansion US$ 4.6 billion at the primary and US$ enrolment of pupils in primary school. new ESSP, to improve both access and need to increase fourfold between now to 2020. Over 30 million additional sec- scenario will represent around 5 percent 4.9 billion at the secondary level (Figure quality of education. In this scenario, and 2060 (Figure 12b). ondary school textbooks will need to of GPD and 20 percent of the projected 13b). This translates to potential average 29. Education spending in Kenya primary enrollment numbers (Figure be procured between 2020 and 2060 national budget in the 2020-2025 peri- annual savings of US$ 238 million (US$ accounted for 5.2 percent of GDP and 12a) will not change significantly, as To expand access and enhance quali- –which translates to 875,000 books per od. Thus, efforts to increase access and 116 million for the primary sub-sector and 21.0 percent of government expen- a result of implementing measures to ty, the government will need to put in year (Figure 12c). improve quality are fiscally feasible, and US$ 123 million for secondary). diture in 2017/18 (UNICEF, 2018) FIGURE 12A. Millions PROJECTED 14 EDUCATIONAL INPUTS 13.1 13.2 UNDER THE EXPANSION 12.9 12,4 12,6 12.6 12.4 12.5 WITH QUALITY 12.1 SCENARIO / 12 NATIONAL ENROLLMENT Source: Author’s calculations 10 8 7.4 7.6 7.1 6.7 6 5.6 4.5 4 3.4 46 2.1 34 2 1.7 Primary 0 Lower and upper secondary 2020 2025 2030 2035 2040 2045 2050 2055 2060 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 78 79 FIGURE 12B. Primary FIGURE 12C. Primary PROJECTED EDUCATIONAL INPUTS UNDER THE PROJECTED EDUCATIONAL INPUTS UNDER THE Lower and upper secondary Lower and upper secondary EXPANSION WITH QUALITY SCENARIO / EXPANSION WITH QUALITY SCENARIO / PUBLIC TEACHERS NUMBER OF PUBLIC CLASSROOMS Source: Author’s calculations Source: Author’s calculations 500 250 Thousands Thousands 206.9 209.0 404.7 203.2 396.2 198.2 385.6 191.5 370.6 349.5 400 200 161.9 140.1 249.9 128.5 237.2 239.5 118.9 300 232.9 117.3 150 227.2 111.7 114.8 219.5 107.4 101.3 199.1 181.6 173.6 175.9 162.4 74.7 200 100 53.9 95.3 29.8 44.5 100 14.4 50 0 0 2020 2025 2030 2035 2040 2045 2050 2055 2060 2020 2025 2030 2035 2040 2045 2050 2055 2060 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 80 81 FIGURE 12D. Primary FIGURE 13A. S1: ‘Business as usual’ PROJECTED EDUCATIONAL INPUTS UNDER THE FISCAL IMPLICATIONS UNDER THE EXPANSION WITH S2: ‘Expansion’ Lower and upper secondary EXPANSION WITH QUALITY SCENARIO / QUALITY SCENARIO (5-YEAR AVERAGE) / NUMBER OF TEXTBOOKS IN PUBLIC SCHOOLS FISCAL IMPLICATIONS UNDER THE DIFFERENT Source: Author’s calculations SCENARIOS (MILLIONS OF USD) Source: Author’s calculations 100 Millions 79.6 78.8 90 77.4 75.5 2020 834 979 2040 964 2,104 2025 2045 72.9 80 70 57.9 2025 1,285 2045 983 852 2,153 48.1 2030 2050 60 43.3 42.8 42.7 40.7 41.8 39.1 50 36.9 30.8 40 24.7 2030 2050 894 1,640 996 2,195 2035 2055 30 15.1 8.2 20 10 2035 937 2,068 2055 1,001 2,224 2040 2060 0 2020 2025 2030 2035 2040 2045 2050 2055 2060 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 82 83 FIGURE 13B. Millions of USD FISCAL IMPLICATIONS UNDER THE EXPANSION 9,000 WITH QUALITY SCENARIO (5-YEAR AVERAGE) / FISCAL COST SAVINGS 8,000 UNDER THE MEDIUM AND LOW POPULATION 7,662 VARIANTS 7,508 Source: Author’s calculations 7,317 7,064 7,000 6,498 6,322 6,259 6,245 6,192 6,122 6,000 5,000 4,837 4,000 3,839 3,481 3,456 3,447 3,467 3,455 3,364 3,179 3,000 2,847 2,941 2,911 2,770 2,711 2,766 2,586 2,418 2,048 2,000 1,000 Med secondary Low secondary Med primary Low primary 0 2025 2030 2035 2040 2045 2050 2055 2060 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 84 85 C Revisiting the textbook procurement III. Finally, increasing education sector funding D.1.3 teachers’ housing only where it is neces- mechanisms and investing more in is an urgent priority necessary to address chron- PROVIDING EDUCATION sary), larger schools to achieve economies digital learning materials. Uganda ic underfunding and demographic pressure. FOR UGANDA’S GROWING of scale, and the creation of multi-purpose has some of the highest unit costs per spaces (e.g. multi-purpose labs and librar- textbook on the continent31, leading to A Hopefully, the country will experience a POPULATION ies). In addition, revisiting the policy of low pupil per textbook ratios. While the gradual increase in the share of the public double shifts to ensure effective classroom minimum textbook requirement will be budget going to education. Uganda’s public Investing in education is crucial to fully space utilization may be beneficial. reduced with the introduction of the new education expenditure as a share of the total capitalize on the benefits of going through a de- lower secondary curriculum (by reducing public expenditures has decreased from 15 per- mographic transition. As the ‘Business as Usual’ C Revision of teacher utilization and deploy- the number of compulsory subjects), dra- cent in FY12/13 to 10 percent in FY19/20. This scenario demonstrates, the GoU will have to invest ment policies and practices, especially under matic reductions in unit costs across all suggests that education has a lower national heavily just to prevent the system from declining the new lower secondary education curric- sub-sectors are necessary to close the fi- priority than seven years ago. The government (without any improvements to the sector). However, ulum. The official teaching load in Uganda in nancing gap for basic textbook provision. needs to gradually increase its public expen- this would imply that Uganda would continue to un- lower secondary education should be in line diture on education as a share of the national derinvest in the productive potential of its citizens. with the regional standard of 20 hours per week. D Diversifying low-cost service delivery budget to re-align it with the regional average This will enable school managers to redistribute platforms through investment in re- and international norms, and as a requisite to More substantial and strategic investments in work more efficiently. In addition, the allocation mote learning approaches, including ensure the human capital accumulation of the the sector are not only fiscally feasible but will of teachers should be need-based, and more uni- distance education and online learn- growing youth population. also generate substantial efficiency gains in formly implemented.30 ing at the secondary education level. the long term. This section proposes three sets of This could reduce operational costs in B Introducing a sustainable PPP strategy to policy recommendations that will allow the GoU II. The introduction of strategic and systemic the medium and long run but comes better leverage non-state resources. More to better capitalize on the investments made in reforms and investments will allow the govern- with certain pre-conditions such as the than half of national expenditure is current- the ‘Expansion with Quality’ scenario by partially ment to better allocate resources and achieve development of student support systems. ly paid by households and the private sector. offsetting the initial investment and ultimately gen- substantial savings. At the same time, content and pedagog- The current USE PPP strategy, which has erating considerable savings. ical practices for teachers coupled with successfully leveraged non-state funding via A Restructuring the education system by student tracking on progression for ef- a per-student subsidy and allowed for a large- I. More effective and efficient utilization of ex- separating lower and upper secondary cy- fective remote learning programs could scale expansion of the sector, was phased out isting resources. This will allow the sector to cles. Under this proposal, lower secondary be explored. Uganda can learn from its in 2018. Thus far, no alternative has been prioritize and re-focus on achievable goals. education would become part of compulsory neighbours - Rwanda and Kenya, who proposed by the government, which puts hun- universal basic education, while upper sec- have developed a range of diverse remote dreds of thousands of secondary students at A Introduce and ensure adherence to min- ondary education remains an un-compulsory, learning platforms, including TV, radio risk of dropping out. Thus, the development imum standards of service delivery. The academically focused track (consistent with and online technologies to provide more of a policy framework for governing and reg- priority should be placed on poor perform- enrolment capacities in higher or technical and diverse support to schools and teachers ulating non-state actors is a priority. ing areas and/or schools to elevate their vocational education). In addition, it includes (World Bank, 2020). performance in line with national averages. specialized learning profiles at the lower sec- Focusing on those who lag will reduce ineq- ondary level aligned with the new curriculum E Shifting to performance-based uities and curb inefficiencies (e.g. repetition (e.g. humanitarian, scientific, vocational) to budgeting in the long-term. The intro- and drop-outs) within the system. allow for better efficiency and transition tracks. duction of performance-based budgeting 30. Previous analyses show that the allocation is a strategic reform that will allow the of teachers to schools doesn’t follow a clear B Development and implementation of B Implementing robust school safety mea- government to reduce inefficiencies and pattern or to be aligned with actual needs. a cost-effective and demand-driven sures, including prevention of early maximize the returns on investments in Poor deployment practices, therefore, school construction strategy. Expand- marriage and pregnancies. Violence against education. Performance-based budget- result in further additional costs to the gov- ing at such a rapid scale and pace requires children (VAC), early marriage and pregnan- ing is currently being piloted under the ernment (World Bank Group, 2019b). more cost-effective and sustainable school cies are major impediments to both expansion Uganda Intergovernmental Fiscal Trans- infrastructure investments. This should and quality of education. Reducing VAC, can fers Program. While the implementation 31. This is due to a variety of factors including generally include, amongst others: better utiliza- generate substantial efficiency gains through challenges are inevitable, this is a very low competitiveness of the industry, issues related tion of existing infrastructure, reduction decreasing drop-out and repetition rates, in encouraging development, likely to gen- to the purchase of design rights by the government, in construction costs where possible (e.g. addition to major social benefits. erate substantial efficiency gains. as well as high distribution and storage costs. TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 86 87 D.2 TABLE 4C. (General Government Expenditure of Health – ADMINISTRATIVE LEVELS, IMMEDIATE POLITICAL OVERSIGHT STRUCTURES AND ESTIMATED CATCHMENT POPULATION OF THE DIFFERENT LEVELS OF SERVICE DELIVERY HEALTH SERVICES GGHE) is about 2 percent of GDP for 2019/20, among the lowest in Sub-Saharan countries. This Source: Ministry of Health (2016); Service Delivery Standards; Ministry of Health (2010); Second Health Policy; Parliament of translates to around U$8 per capita or 15.7 per- Uganda 1997; Local Government Act 1997. cent of the Total Health Expenditure, according to the National Health Expenditures account Delivery of primary health care services (Ministry of Health, 2016). 33 In the mid-2000s, in Uganda is largely decentralized to local transfers for the provision of health services governments (LGs). 32 While the Ministry of began to decline in real per capita terms due Health (MoH) is responsible for policy formu- to changing government priorities. By 2015/16, lation, setting standards, technical support, non-wage recurrent transfers in the health sec- epidemic control and monitoring overall sector tor declined by 65 percent from their peak in the Health system level Administrative level Political Population served performance, the district local governments are early 2000s. The financing gap that has been cre- responsible for service delivery. Moreover, the ated by the diminishing government funding over District Health Services Headquarters (District the years has been met by development partners Health Office) provides the governance and man- and households. By 2015/16, the health sector Health Centre I (Village) Village Local Council 1 1,000 agement oversight for health service delivery at was being heavily financed by development part- the district level. Health services are delivered ners contributing about 42 percent of the Total at the following levels: Health Centers I (Village Health Expenditure followed by households at Health Team at household/communities/villages), 41 percent, and the Government of Uganda at 15 Health Centre II Parish Local Council 2 5,000 II, III, and IV; and Hospitals (General, Regional percent. Consequently, while health outcomes Referral, National Referral and Specialized Hos- have improved in Uganda over the past decade, pitals). Different levels of health service delivery many of the indicators remain far from national are accountable to different levels of administra- and global targets. In addition, the sector faces Health Centre III Sub-county Local Council 3 20,000 tive and political structures and serve standard some important challenges including: (i) short- catchment populations (Table 3). age in critical human resources, (ii) sub-optimal supply of quality medicines and health technolo- The MoH is responsible for allocating the sector gies, (iii) infrastructure shortfalls, (iv) low levels Health Centre IV County Local Council 4 100,000 budget to the different levels of the health sys- of funding for major inputs, (v) poor quality of tem. The Ministry of Finance provides each sector, health services, (vi) low allocative and technical including the MoH, with an overall resource enve- efficiency, and (vii) poor coordination with other lope for each Financial Year (FY). The MoH then sectors (Ministry of Health, 2019). General Hospital District Local Council 5 500,000 allocates the funds to different levels of the health system after consultations with key stakeholders in the health sector and based on the priorities outlined in the Health Sector Development Plan (2015/16- Regional Referral Hospital Region National Parliament 2,000,000 2019/20) and review of performance in the previous FY. After the national budget is approved by Par- liament, the different levels of the health system deliver health services in line with the approved National Referral Hospital National National Parliament 43,000,000 work-plans and budgets. In Uganda, public spending on social services, 32. In line with the Decentralization Policy such as education and health, is low, even in (1992), the 1995 Constitution of the Republic of Ministry of Health National National Parliament 43,000,000 comparison to other low-income countries. Uganda, and the Local Government Act of 1997. Headquarters The share of health expenditure from both do- mestic resources and on-budget external support 33. For the fiscal years 2014/2015 and 2015/2016. TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 88 89 D.2.1 to be 44 percent.35 In the case of universal health METHODOLOGICAL coverage, the assumption is that Uganda reaches a CONSIDERATIONS UHC service coverage index of 90 percent, in line with the Sustainable Development Goals (SDGs). The analysis presented here focuses on public The following assumptions were made in the spending (General Government Expenditure analysis for the ‘Business as Usual’ and UHC sce- on Health – GGHE) for the national minimum narios. Foremost, for both scenarios, it was assumed healthcare package. This encompasses capital, that there were no changes in the model of service recurrent, and non-recurrent expenditures for delivery, epidemiological and social transitions. Un- delivery of essential health services including re- der the UHC scenario, in order to attain this level of productive, maternal, newborn and child health, access, the following requirements were considered: infectious diseases, non-communicable diseases targets of 44.5 medical doctors, nurses and mid- – be it promotive, preventive, curative, rehabili- wives per 10,000 people (WHO, 2016) and around tative or palliative.34 18 hospitals beds per 10,000 people (UN, 2020). In comparison, the requirements to attain the current The cost estimates of serving the growing level of access of 44 percent are about 15 medical population under the different population staff per 10,000 people (NPA Policy Brief, 2018/19) projections over the next 40 years are based and around 11 hospital beds per 10,000 people (Min- on the GGHE of the year FY 2019/20. The istry of Health, 2019). GGHE for this year amounted to US$ 703 million (6.4 percent of the national budget and 2 percent of GDP (Ministry of Finance Planning and Eco- nomic Development). This was converted into per capita expenditure, which is the basis to estimate 34. It must be noted that this study did not the cost over the period 2020-2060 under the dif- consider other key determinants of the cost ferent population and access scenarios. Data for of providing healthcare services to the popu- the projections of the physical resources or in- lation over the next 40 years such as changes puts, namely number of health facilities, hospital in the disease patterns, the model of service beds, health worker density and relevant stan- delivery and the adoption of technologies. dards, were obtained from various governments documents including the Annual Health Sector 35. The UHC service coverage index measures progress Performance Report for FY 2018/19 (Ministry of towards SDG 3.8.1 and its component tracer indicators, Health, 2018/2019) and the NPA POLICY BRIEF based on the most recently available data and agreed (2018/2019). upon methods (1). The 14 UHC SCI tracer indicators, which span essential health service domains from The implication of the population trends we reproductive and child health to noncommunicable explored for a ‘Business as Usual’ scenario and diseases (NCDs) and service capacity. The 14 tracer an ‘Improved Equilibrium’ scenario or universal indicators are: A) RMNCAH - Family planning, Antenatal health coverage (UHC). For each of them, the cost care, 4+ visits (ANC), Child immunization (DTP3), estimates are obtained under both the low and me- Care seeking for suspected pneumonia, B) Infectious dium-variant population projections. Cost estimates disease control - TB treatment, HIV treatment (ART), are presented in 2019/20 prices and no consider- Insecticide-treated nets (ITN) and basic sanitation; C) ations were made for the potential changes in the Non-Communicable Diseases - Normal blood pressure, models of service delivery, epidemiological and so- Mean fasting plasma glucose, and Tobacco nonsmoking; cial transitions. For the ‘Business as Usual’ scenario, D) Service capacity and access - hospital bed density, the current UHC service coverage index is assumed health worker density, IHR core capacity index. TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 90 91 D.2.2 Uganda will need 116 additional gener- 133 fewer HCIVs by 2060 under the 2020 and 2060).36 Similarly, Uganda will percent of GDP (US$ 204 million) in ‘BUSINESS AS USUAL’: al hospitals under the medium-variant, low-variant scenario compared with need 89,557 additional doctors, nurses 2060 respectively. The projected GGHE MAINTAINING and still 89 additional general hospitals the medium-variant scenario. and midwives under the medium-vari- as a percentage of GDP is expected to under the low-variant – an increase of ant scenario by 2060, compared to 68,960 drop from 1.88 percent in 2020 to 1.39 CURRENT ACCESS 71 percent and 50 percent respectively While the need to provide more under the low-variant (Figure 14c).37 Cu- percent by 2040 and 1.08 percent under 36. Considering linear trends, this LEVELS UNDER from the current 163 general hospitals hospital beds, doctors, nurses and mulatively, this means that, at the end of the medium-variants, while it will reduce translates to 1,662 additional hospital DIFFERENT FERTILITY country-wide (Figure 14a and b). The midwives by 2060 is high under both the 40 year period, around 20,597 fewer to 1.31 percent by 2040 and 0.94 percent beds per year under the medium SCENARIOS low fertilty variant translates into 27 the low and medium-variants, signifi- medical staff will be required under the by 2060 under the low population variant population variant and 1,425 additional and 8 fewer general hospitals required cantly fewer are required under the reduced fertilty scenario, which will ( Figure 15a and b). In total, achieving the 1,425 hospital beds per year under REQUIREMENTS IN TERMS by 2060 and 2040 (when the country low-variant assumption. As indicated bring important savings in terms of sala- low population variant scenario would the low population variant. OF INPUTS aspires to achieve the Vision 2040) in Figure 14b, by 2060, Uganda will need ries, as discussed below. result in more than UGX 11.5 trillion respectively, which means that the 63,557 and 48,940 additional hospital (U$3.03 billion) in cumulative savings for 37. Considering linear trends, the country As expected, the physical inputs country will need to build and equip beds respectively under the medium and FISCAL IMPLICATIONS the Ugandan health budget over the pe- will need an additional 2,342 core health required to maintain the level of one less general hospital every 2-3 low-variants. Achieving the lower pop- riod from 2020 to 2060. This means that workers annually by 2040 to achieve the basic health services coverage at years, and two less HCIVs annual- ulation growth rate translates to 14,617 Lower population growth rate (as having lower population growth trans- current level of service coverage under the 44 percent for Uganda’s growing ly compared to the medium-variant. and 4,512 fewer hospital beds required projected by the low-variant scenario) lates to savings which could be used to medium population variant as compared population over the next 40 years Similarly, the country will need 7 by 2060 and 2040 respectively (about translates to savings of 0.08 percent of expand service provision and/or increase to an additional 2,008 core health workers will increase considerably. By 2060 fewer regional referral hospitals and 365 hospital beds less per year between GDP in 2040 (US$ 63 million) and 0.14 quality of healthcare. per year under the low population variant. FIGURE 14A. Number of hospitals ADDITIONAL INPUTS 140 REQUIRED UNDER THE 44% UHC SERVICE COVERAGE 116 120 INDEX FOR THE LOW AND MEDIUM POPULATION 102 VARIANTS (2020-2060) / ADDITIONAL (GENERAL) 100 89 HOSPITALS REQUIRED 87 81 Source: Author’s calculations* 80 73 71 61 57 60 49 42 37 40 27 25 13 20 12 46 Medium variant 3 3 34 Low variant 0 2020 2025 2030 2035 2040 2045 2050 2055 2060 *Based on the approved FY 2019/20 Budget (Ministry of Finance, Planning and Economic Development) and the National Planning Authority reported UHC service coverage index as of 2019 (NPA Policy Brief, 2018/19). TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 92 93 FIGURE 14B. Medium variant FIGURE 14C. Medium variant ADDITIONAL INPUTS REQUIRED UNDER THE 44% ADDITIONAL INPUTS REQUIRED UNDER THE 44% UHC Low variant Low variant UHC SERVICE COVERAGE INDEX FOR THE LOW AND SERVICE COVERAGE INDEX FOR THE LOW AND MEDIUM MEDIUM POPULATION VARIANTS (2020-2060) / POPULATION VARIANTS (2020-2060) / ADDITIONAL ADDITIONAL HOSPITAL BEDS REQUIRED DOCTORS, NURSES AND MIDWIVES REQUIRED Source: Author’s calculations* Source: Author’s calculations* 70,000 100,000 63,557 89,557 60,000 78,907 80,000 55,998 50,000 48,940 67,744 68,960 48,076 62,686 44,487 60,000 56,221 55,371 40,000 39,899 39,295 47,124 44,506 33,443 31,585 40,000 30,000 38,148 27,073 32,779 23,263 28,726 20,000 20,386 21,230 20,000 19,155 15,067 10,000 13,594 10,158 2,280 2,280 9,439 0 7,209 6,699 1,618 1,618 2020 2025 2030 2035 2040 2045 2050 2055 2060 0 *Based on the approved FY 2019/20 Budget (Ministry of Finance, Planning and Economic Development) and the National Planning Authority 2020 2025 2030 2035 2040 2045 2050 2055 2060 reported UHC service coverage index as of 2019 (NPA Policy Brief, 2018/19). TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 94 95 FIGURE 15A. PROJECTED GGHE COSTS UNDER THE 44% UHC SERVICE COVERAGE INDEX FOR LOW AND MEDIUM / PROJECTED 1.88 1.60 1.39 1.23 1.08 GGHE AS % OF GDP Source: Author’s calculations* 1.88 1.57 1.31 1.12 0.94 Medium variant Low variant 2020 2030 2040 2050 2060 FIGURE 15B. PROJECTED GGHE COSTS UNDER THE 44% UHC SERVICE COVERAGE INDEX FOR LOW AND MEDIUM/ GGHE (MILLION USD) 703 914 1,145 1,375 1,592 PROJECTIONS Source: Author’s calculations* 703 893 1,082 1,253 1,387 Medium variant 2020 2030 2040 2050 2060 Low variant *Bbased on the approved FY 2019/20 Budget (Ministry of Finance, Planning and Economic Development) and the National Planning Authority reported UHC service coverage index as of 2019 (NPA Policy Brief, 2018/19) TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 96 97 D.2.3 D.2.4 expenditure in Uganda, yet OOP is associated with implement corrective measures in real-time if ‘ENHANCED EQUILIBRIUM’: RECOMMENDATIONS TO TACKLE negative effects to the welfare of households. An ef- necessary. Improving management, maintenance IMPROVING ACCESS LEVELS THE DEMOGRAPHIC CHALLENGE fort to mobilize and manage these resources through and repair of equipment and enhancing staff time mandatory and/or voluntary contributory schemes at task are two critical efficiency saving areas that FROM THE HEALTH SECTOR INPUTS REQUIRED TO MAINTAIN can help to increase resources in the health sector. need to be pursued more vigorously. CURRENT ACCESS LEVELS UNDER Providing the growing population with basic health Deepening Public Private Partnership in DIFFERENT FERTILITY SCENARIOS The involvement of citizens, civil services will be essential to guarantee their productive Health (PPPH) would leverage private re- potential over their lifecycle, and thus, will help Uganda sources for the sector. The government’s society and other stakeholders As expected, the requirements to achieve universal take advantage of the demographic transition. In addition, formulation of the PPPH policy was a bold step can also help to improve the health care coverage goals (i.e. UHC of 90 percent) the national policy of expanding access in line with the SDG in enhancing the private sector participation and transparency and accountability of in terms of inputs are substantial. Under the current aspirations needs to be supported by robust efforts to concur- contribution to the health sector. It would be access level (i.e. UHC index of 44 percent) there is little rently: a) increase the level and improve the organization of beneficial to further strengthen the PPPH, espe- healthcare resources. guarantee that the growing young population of Ugan- resources directed to the health sector, b) improve allocative cially in areas where the government investment dans over the next 40 years will be able to attain their and technical efficiencies in the health sector, and is low. Access to capital and an adequate invest- Scaling up digitalization of business process- full productive potential as adults. Thus, a new scenario ment climate are important for the development es. The digitalization of health service delivery, consistent with the goals of providing universal basic c) address the family planning and of private health businesses (training, healthcare, management of healthcare resources, training of health care services is also analyzed: an UHC index of reproductive health needs of the research and innovation). personnel, procurement and engagement of stake- 90 percent. Under the most likely population scenario holders can also help to enhance efficiency. This (medium-variant population projection) the country will population, which will help to accelerate B Enhancing efficiency in the health sector. With will be particularly important for the higher-lev- need 173 additional general hospitals by 2060, which is the reduction in the population growth inefficiencies accounting for the loss of between 20 el facilities, for which business processes can be 57 more than if the current levels of access were to be rate, with positive outcomes on health to 40 percent of healthcare resources in the coun- streamlined, automated and digitalized. The gov- maintained (Figure 16a and b). Similarly, a total of 257,117 try (World Health Report, 2010), the importance ernment has already started on this agenda and is additional health care workers (167,560 more than if indicators and significant savings over of enhancing the efficiency of sector is clear. Some encouraged to continue this path. current access rates are mainted) and around 104,002 the next 40 years. efficiency enhancing interventions that could be additional hospital beds (40,445 more when compared adopted and or scaled up are: Strengthening health promotion and disease to UHC of 44) will be needed. A Increasing the resources to address the health prevention through a multi-sectoral collabo- needs of the growing population. As has been shown, Deepening the implementation of re- ration. Since over 70% of the disease burden in FISCAL IMPLICATIONS the required resources to serve the growing population sults focused budgeting and purchasing Uganda is preventable and prevention measures and to achieve universal access to basic health services approaches in the health sector. The govern- are far cheaper than treatment on per capi- Increasing the UHC service coverage index of 44 over the next 40 years are significant. Thus, it will be ment’s adoption of program-based budgeting ta terms, investing in this area can beneficial. percent to 90 percent more than doubles the pro- important to explore all possible financing sources: will potentially enhance efficiency in resource Taking a multi-sectoral investment approach in jected GGHE as a share of GDP. While the projected allocation as it aligns spending with program prevention has been shown to produce better re- GGHE as a percentage of GDP is expected to drop from Increasing government financing of health. objectives. Coupled with the nation-wide sults due in part due to leveraging of resources 3.75 percent in 2020 to 2.78 percent by 2040 and 2.17 While it might be difficult to reach the Abuja adoption of results-based financing (RBF) as a and mutual accountability. percent under the universal service coverage assump- Target of increasing the general government ex- strategic purchasing mechanism involving both tion, this would imply significant additional resources penditure on health as a proportion of the general the public and private health facilities, it will C Satisfying the unmet need for family planning compared to the status quo (Figure 17a). More specif- government expenditure to 15 percent, the GoU enhance efficiency in the sector. Deliberate and reproductive health services. As discussed ically, under the medium population variant, Uganda should explore the possibility of increasing the efforts to deepen reforms in these two areas in Chapter 2, the unmet needs for modern con- will need to spend an additional 1.42 percent (US$ current level of 6.4 percent. Having an adequate are critical in achieving health sector policy traception among women as well as the fact that 1,145 million) and 1.09 percent (US$ 1,592 million) of core public funding of health can not only increase objectives at lower costs. the desired fertility is considerably higher than GDP to achieve universal coverage by 2040 and 2060 coverage, it also enhances the government’s stew- the observed fertility highlights the importance of respectively (Figure 17b). Now, when an effort to reduce ardship and oversight of interventions in the sector. Efficient deployment and use of resources. expanding and improving the family planning and fertility is considered (low-variant projection), we ob- Inefficiencies often arise from weaknesses in reproductive health services in Uganda. This will serve that the GGHE as a percentage of GDP drops to Increasing and organizing private financing the deployment of resources (including human not only bring positive effects on the health out- 2.63 in 2040 and 1.89 by 2060—a difference of 0.15 and for health. Private financing of health care and resources, infrastructure, equipment and medi- comes of women (and their children), but will help 0.28 points of GDP compared to the medium-variant especially out of pocket (OOP) financing currently cine). Thus, it is important to regularly monitor to curb population growth, lowering the pressure projection (Figure 17c). accounts for about 37 percent of the total health the effectiveness of the deployed resources and on healthcare resources. TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 98 99 FIGURE 16A. FIGURE 16B. 90% UHC service 90% UHC service ADDITIONAL INPUTS REQUIRED TO REACH THE 90% UHC SERVICE COVERAGE ADDITIONAL INPUTS REQUIRED TO REACH THE 90% UHC SERVICE COVERAGE coverage index coverage index INDEX FOR THE MEDIUM POPULATION VARIANT (2020-2060) / INDEX FOR THE MEDIUM POPULATION VARIANT (2020-2060) / 44% UHC service 44% UHC service ADDITIONAL (GENERAL) HOSPITALS REQUIRED ADDITIONAL HOSPITAL BEDS REQUIRED coverage index coverage index Source: Author’s calculations* Source: Author’s calculations* Additional hospital beds 120,000 41 4 20 104,002 100,000 27 3 13 91,634 2020 2025 2030 80,000 78,671 65,289 63,557 60,000 63 86 109 55,998 51,685 48,076 42 57 73 39,899 40,000 38,066 2035 2040 2045 31,585 24,654 23,263 20,000 15,067 11,796 131 153 173 7,209 2,648 1,618 0 87 102 116 2020 2025 2030 2035 2040 2045 2050 2055 2060 2050 2055 2060 *Based on the approved FY 2019/20 Budget (Ministry of Finance, Planning and Economic Development) and the National Planning Authority reported UHC service coverage index as of 2019 (NPA Policy Brief, 2018/19). TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 100 101 FIGURE 16C. ADDITIONAL INPUTS REQUIRED TO REACH THE 90% UHC SERVICE COVERAGE INDEX FOR THE MEDIUM POPULATION VARIANT (2020-2060) / 300,000 ADDITIONAL DOCTORS, NURSES AND MIDWIVES REQUIRED Source: Author’s calculations* 257,117 250,000 226,538 200,000 194,491 161,409 150,000 127,776 100,000 94,108 89,557 78,907 67,744 60,951 56,221 50,000 44,506 90% UHC service coverage index 29,162 32,779 44% UHC service coverage index 6,546 21,230 *Based on the approved FY 2019/20 Budget 10,158 0 2,280 (Ministry of Finance, Planning and Economic Development) and the National Planning Authority reported UHC service coverage 2020 2025 2030 2035 2040 2045 2050 2055 2060 index as of 2019 (NPA Policy Brief, 2018/19). TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 102 103 FIGURE 17A. 44% UHC service PROJECTED GGHE FOR 44% AND 90% SERVICE COVERAGE UNDER THE MEDIUM cover age index AND LOW POPULATION VARIANTS / 90% UHC service PROJECTED GGHE AS A % OF GDP UNDER THE MEDIUM POPULATION VARIANT cover age index Source: Author’s calculations* 3.75% 1.88% 3.20% 1.60% 2.78% 1.39% 2.45% 1.23% 2.17% 1.08% 2020 2030 2040 2050 2060 FIGURE 17B. 44% UHC service PROJECTED GGHE FOR 44% AND 90% SERVICE COVERAGE UNDER THE MEDIUM AND cover age index LOW POPULATION VARIANTS / 90% UHC service GGHE (MILLION USD) PROJECTIONS UNDER THE MEDIUM POPULATION VARIANT cover age index Source: Author’s calculations* 1,407 703 1,828 914 2,290 1,145 2,751 1,375 3,184 1,592 2020 2030 2040 2050 2060 *Based on the approved FY 2019/20 Budget (Ministry of Finance, Planning and Economic Development) and the National Planning Authority reported UHC service coverage index as of 2019 (NPA Policy Brief, 2018/19). TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 104 105 FIGURE 17C. 44% UHC service FIGURE 17D. 44% UHC service PROJECTED GGHE FOR 44% AND 90% SERVICE COVERAGE UNDER THE cover age index PROJECTED GGHE FOR 44% AND 90% SERVICE COVERAGE UNDER THE MEDIUM cover age index MEDIUM AND LOW POPULATION VARIANTS / AND LOW POPULATION VARIANTS / 90% UHC service 90% UHC service PROJECTED GGHE AS A % OF GDP UNDER THE LOW POPULATION VARIANT GGHE (MILLION USD) PROJECTIONS UNDER THE LOW POPULATION VARIANT cover age index cover age index Source: Author’s calculations* Source: Author’s calculations* Projected GGHE Million USD 3,000 4.0 2,775 3.75 2,505 2,500 3.13 2,164 3.0 2,000 2.63 1,787 2.23 1,500 1,407 1,387 2.0 1,253 1.89 1,082 1,000 893 703 1.88 1.57 500 1.0 1.31 1.12 0.94 0 2020 2030 2040 2050 2060 0 2020 2030 2040 2050 2060 *Based on the approved FY 2019/20 Budget (Ministry of Finance, Planning and Economic Development) and the National Planning Authority reported UHC service coverage index as of 2019 (NPA Policy Brief, 2018/19). TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 106 107 D.3 energy are vertically unbundled and INVESTMENT IN designed to incentivize competition through private sector participation INFRASTRUCTURE (PPPs, concession agreements). Rural electrification is less competitive and managed by the Rural Electrification Board and higher access rates to rural customers have been hampered by a Despite recent investments, Uganda combination of tariff affordability and still has a considerable infrastructure a strategy that remained too focused deficit, requiring significant addition- on grid expansion. al efforts, particularly in the power, water supply, and sanitation sub-sec- Access to clean water and sanita- tors. A recent analysis estimated that an tion varies throughout Uganda, with annual investment of US$ 1.6 billion or rural areas requiring a significant about 14 percent of GDP per year be- level of investment relative to ur- tween 2006 and 2015 would be required ban centers. The Directorate of Water to meet the economic and social targets Development within the Ministry of traced in the Millennium Development Water and Environment is responsible Goals (MDGs) within the information for the construction of water and san- and communication technologies (ICT), itation-related infrastructure. Piped power, transport, water and sanitation, water and sewage services are limited and irrigation sectors. The sectors with to urban areas and operated by the Na- the highest investment requirements tional Water and Sewerage Corporation were the power and water supply and (NWSC). NWSC operates in 256 towns sanitation sectors, with an estimated an- and manages about 660 thousand wa- nual capital investment of US$ 390 and ter and 22 thousand sewer connections US$ 293 million respectively (Table 4). (NWSC, 2020). While NWSC is one of Despite recent efforts by the GoU, the the best performing water utility com- infrastructure deficit in these three sec- panies in Sub-Saharan Africa, regulated tors affects Ugandan households’ access by a dedicated department under the to basic services. Directorate of Water Development, ex- panding access to the wider population, The energy sector in Uganda is especially in rural areas, has been a chal- well positioned to reap positive lenge (Murungi and Blockland, 2016). and significant returns from fis- Apart from NWSC, regional ‘Umbrella’ cal investment. Compared to other public utilities operate piped water sys- Sub-Sahara African countries, the tems, and water supply and sanitation energy sector in Uganda has a strong responsibilities in small towns. Rural organizational structure and finances growth centers are entrusted to local (Godinho and Eberhard 2019). It is government entities and, with excep- governed by an independent regula- tions, typically entail non-network tor and, in addition, the generation, technologies (Ministry of Water and transmission, and distribution of Environment, 2020). TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 108 109 D.3.1 Measuring access to safely managed TABLE 4D. METHODOLOGICAL water and sanitation services is com- PREVIOUSLY ESTIMATED ANNUAL INFRASTRUCTURE SPENDING NEEDS IN UGANDA, 2006–15 (2020 US$ MILLION) CONSIDERATIONS plicated by the absence of pertinent Source: Ranganathan and Foster (2012) information in household surveys. Most household surveys lack information Sector Capital expenditure Operations & maintenance Total cost The analysis in this section focuses on bacterial safety of water sources and ICT 161 20 181 on capital investments and fiscal how excreta are managed and treated. In Irrigation 260 1 261 impact for electricity access and order to address this information deficit, distribution, and water supply this analysis will rely on the ‘basic access’ Power 439 64 503 and sanitation, required to serve definition formulated under the SDGs Transport 154 94 249 Uganda’s growing population over that entail for access to ‘improved’ water Water and Sanitation 330 63 393 the next 40 years. The population supply sources, such that these protect- projections are based on low and me- ed water sources are within 30 minutes Total 1,344 242 1,587 dium level fertility scenarios based on walking distance from the household, the United Nations World Population and for sanitation using an ‘improved’ Prospects, as explained in Chapter latrine technology not shared with other TABLE 4E. 3. Cost estimates are prepared for a households (Table 5). 38 SUSTAINABLE DEVELOPMENT GOALS ‘Business as Usual’ scenario, that iden- Source: Ritchie, Roser, Mispy, Ortiz-Ospina (2018) tifies capital cost investments needed Given the significant gaps in access, for an increasing population if current realizing the SDGs will require a con- SDG INDICATOR 7.1.1 SDG INDICATOR 6.1.1 SDG INDICATOR 6.2.1 Access to electricity Safe drinking water Safe sanitation and hygiene access rates are to be maintained. Both siderable effort as discussed below. the power and water supply sectors Using the most recent household survey A safely managed drinking water Share of the total population using are highly capital intensive and rely on for Uganda (Uganda National Household service is defined as one located on a safely managed sanitation service; network distribution in more dense- Survey 2016/17), the access statistics are The proportion of population with premises, available when needed that is, excreta safely disposed of in access to electricity. It comprises and free from contamination. situ or treated off-site. ly populated areas and non-network estimated (Table 6). About 66 percent of Definition electricity sold commercially, both technologies in less populated areas. the urban population in Uganda is esti- on-grid and off-grid. ‘At least basic’ drinking water service ‘At least basic’ are improved sanitation is an improved source within 30 facilities not shared with other mated to have access to electricity either minutes’ round trip to collect water. households. In addition, the implications of through the grid or from solar energy, attaining the Sustainable Devel- whereas among the rural residents only By 2030 achieve universal access to By 2030 ensure universal access By 2030 achieve universal and opment Goals (SDGs) under the 30 percent have access to either. Like- adequate and equitable sanitation Goal to affordable, reliable and modern equitable access to safe and and hygiene for all and end two population variants are also wise, 85 percent of urban and 57 percent energy services. affordable drinking water for all. open defecation. explored. The SDGs aim to have uni- of rural residents have access to either versal access to electricity and safely improved or piped water supply within managed water and sanitation by 2030 a 30 minute walking distance, and only 31 TABLE 4F. and are built on the earlier defined percent of urban and 17 percent of rural CURRENT ACCESS TO ELECTRICITY, WATER AND SANITATION IN UGANDA (2016/17) MDGs (see Table 5). In the case of residents have access to a private latrine Source: Uganda National Household Survey 2016/17 electricity access, household surveys that is of an improved standard. typically categorize the type of elec- tricity source the household is using Percent for lighting and whether this source 38. “Improved” water solutions that by People with access to electricity from national grid in urban areas 54.66 is from the national grid or otherwise. the nature of its construction protect the People with access to electricity from solar in urban areas 11.82 Energy People with access to electricity from national grid in rural areas 7.26 Since part of the strategy to increase source from outside contamination. It People with access to electricity from solar in rural areas 22.48 access to electricity especially in rural includes a borehole or a protected well areas includes off-grid solutions in the or spring, among others. “Improved” People with access to piped water within 30 minutes of premise in urban areas 60.44 People with access to improved water within 30 minutes of premise in urban areas 24.14 form of solar energy, ‘having access’ is sanitation are pour latrines with Sanitation & People with access to piped water within 30 minutes of premise in rural areas 8.66 measured in this analysis as receiving piped sewer systems and septic tanks, Water People with access to improved water within 30 minutes of premise in rural areas 48.13 electricity either from the national ventilated or improved pit latrines, pit People using basic improved and not shared sanitation services in urban areas 31.24 People using basic improved and not shared sanitation services in rural areas 17.03 grid or from solar sources. latrines with a slap, or composting toilets. TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 110 111 D.3.2 the grid (US$ 801) and off-grid electricity (US$ 200). OBTAINING PER CAPITA These were then converted to per capita cost by div- COST ESTIMATES ing by the average household size (4.9) applied in their analysis. Capital expenditure for grid electricity did not entail electricity generation that is expected to be This study provides approximate cost figures delivered through private sector investments. based on the most updated information and some relevant assumptions. Costing infrastruc- Densely populated urban areas are associated ture per capita is an exercise that is invariably with relatively higher investment costs for im- criticized as being overly simplistic since the cost proved water supply and waste management of infrastructure is dependent on a variety of con- systems than low-density rural areas. Cost esti- textual local circumstances – such as population mates for water supply and sanitation are derived density, terrain, distance to and type of water source from a meta-analysis prepared by Hutton and Var- or power generation, etc. – that will not be captured ughese (2016) for various water, sanitation, and by a single number. However, the intention here is hygiene interventions. These were gathered from to provide approximate cost figures to evaluate peer-reviewed journals as well as project documents different fertility outcomes against each other. In and vetted by practitioners in 40 countries. The order to meet the SDGs, it is assumed that future study estimates are derived for 2016, cost estimates access would be rolled out as follows: the urban have been inflated by 15 percent to account for possi- population would get access to electricity through ble cost increases. The cost of extending piped water the grid, to piped water at their premises, and to at to the household premises in urban areas is thus es- least a latrine with a septic tank. These technical timated at real US$ 120 per capita and for ‘improved’ options that can be afforded because urban den- water technologies in rural habitats at real US$ 40 sities offer economies of scale and typically need per capita.40 A latrine with septic tank is estimated to be installed to manage possible environmental at real US$ 230 per capita for urban areas including externalities arising from population density. Rural full excreta management, and ‘improved’ sanitation residents, on the other hand, would access more options are assumed to cost real US$ 80 per capita cost-effective technical solutions – dictated by their on average, also including safe excreta disposal.41 lack of density – including solar energy, and ‘im- proved’ water and sanitation technologies referred above. Across the spectrum of infrastructure assets, 39. PowerPoint presentation from 2020 shared by it is assumed that assets have a longevity of 25 years Raihan Elahi, World Bank. The analysis took into and need to be replaced thereafter. This translates consideration population growth and assumed into a depreciation rate of 4 percent every year, or that 52 percent of the population would be 20 percent every 5 years. The cost estimates do not served by grid electricity, while the remaining 48 include operation and management costs and are percent would be accessing off-grid solutions. presented in 2019/20 US$. 40. Hutton and Varughese (2016) estimated USD 76.9 It is estimated that energy investments will be per capita for piped water for Uganda; however, US$ 200 to US$ 801 per household, with higher the Ministry of Environment apply cost estimates investments necessary for households located between USD 75 and 120 in their projections, and off electrical grids. A recent costing analysis for the upper boundary is used in this analysis. energy39 estimated that US$ 4,661 million of capital investments were needed to meet the 2030 SDGs in 41. Based on Hutton and Varughese (2016), safe Uganda. Using the cost estimates of this analysis – excreta management is added to the cost of by dividing the number of new households served household assets. Using their cost data, for urban over the cost for each access type – per household septic tanks this implies a cost of $158.6 plus costs were computed for connecting households to $44.6, and for rural pit latrines $42.9 plus $35.1. TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 112 113 D.3.3 will need improved and private sanitation (Figure 18). As scenario: 3.0 million, 5.7 million, and 1.7 million, respectively below for each 5-year cycle (Figure 19). Cumulative spending ‘BUSINESS AS USUAL’ - COST OF expected, the numbers are smaller under the low-fertility sce- (Figure 18). For all services, there is a larger difference in ur- on all three sectors until 2060 would amount to US$ 18.5 billion MAINTAINING CURRENT ACCESS nario projections for urban areas, an additional: 22.9 million ban areas between service access under the medium and low under the medium fertility scenario and US$ 16.2 billion under will need to be connected to an electrical grid; 29.1 million fertility paths (compared to rural areas) since part of the rural the low fertility scenario, which represents savings of around UNDER DIFFERENT FERTILITY will need piped or improved water; 10.7 million will need im- population is expected to migrate to urban areas and urban 15 percent. However, as a proportion of Uganda’s GDP, total SCENARIOS proved and private sanitation. The rural areas show a much fertility is typically lower. spending for all three sectors is moderate, averaging around more moderated need. Under the medium-fertility projection, 0.55 to 0.61 percent of GDP when the cost is annualized over With access rates kept constant, under the most likely an additional: 4.9 million will need to be connected to an elec- The cumulative savings for all three subsectors: energy, the years as a percentage of the prospective GDP. This points population scenario, an additional 27.3 million people in trical grid; 19.5 million will need piped or improved water; water, and sanitation under the low-variant scenario, com- to the rather conservative estimates offered in this analysis and urban areas will need to be connected to the grid, 34.8 mil- 2.8 million will need improved or private sanitation. These pared to the medium-variant, reaches 15 percent. Costing the fact that only these three sectors are included in the overall lion will need piped or improved water; and 12.8 million numbers are reduced considerably under the low-fertility new access and replacement of depreciated assets is shown infrastructure spending required for Uganda FIGURE 18A. Persons with access (Millions) POPULATION (IN MILLIONS) TO BE PROVIDED 40 ACCESS UNDER BUSINESS AS USUAL SCENARIO / ELECTRICITY FROM GRID OR SOLAR Source: Author’s calculations* 34.9 35 30.5 30.4 30 27.2 26.3 25 23.9 22.3 20.7 20 18.6 17.6 15.3 15.1 15.2 14.9 15 14.7 14.4 12.3 13.8 13.4 13.5 13.5 13.2 13.0 13.0 12.2 12.5 11.2 Urban (medium fertility) 10.2 10 9.7 Urban (low fertility) 7.6 Rural (medium fertility) Rural (low fertility) 5 *Using Uganda National Household Survey 2016/17, 2020 2020 2020 2020 2020 2020 2020 2020 2020 UN World Population Prospects (2019) TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 114 115 FIGURE 18B. Urban (medium fertility) FIGURE 18C. Urban (medium fertility) POPULATION (IN MILLIONS) TO BE PROVIDED Urban (low fertility) POPULATION (IN MILLIONS) TO BE PROVIDED Urban (low fertility) ACCESS UNDER BUSINESS AS USUAL SCENARIO / ACCESS UNDER BUSINESS AS USUAL SCENARIO / Rural (medium fertility) Rural (medium fertility) PIPED OR IMPROVED WATER WITHIN 30 MINUTES DISTANCE IMPROVED AND PRIVATE SANITATION Source: Author’s calculations* Rural (low fertility) Source: Author’s calculations* Rural (low fertility) Persons with access (Millions) Persons with access (Millions) 50 18 16.4 44.4 16 14.3 14.3 40 14 38.8 38.7 12.8 12.3 34.6 12 33.4 11.2 10.5 30.4 30 9.7 10 28.8 29.0 28.3 28.4 27.5 26.4 8.8 8.7 26.3 8.5 8.6 25.8 25.7 25.2 8.3 8.3 24.9 24.9 25.6 7.9 8 7.5 7.7 7.7 7.6 23.2 23.9 23.7 7.7 7.2 7.5 7.0 7.2 21.4 22.7 22.4 6.8 6.9 6.4 20 21.2 5.8 5.8 6 19.5 19.5 5.7 18.7 4.6 15.7 4.5 15.3 4 3.6 12.4 12.3 10 9.7 2 2020 2025 2030 2035 2040 2045 2050 2055 2060 2020 2025 2030 2035 2040 2045 2050 2055 2060 *Using Uganda National Household Survey 2016/17, UN World Population Prospects (2019). TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 116 117 FIGURE 19A. 540.9 COST OF MAINTAINING CURRENT 391.9 ACCESS LEVELS FOR ELECTRICITY, WATER AND SANITATION / ELECTRICITY PROVISION 47.6 Source: Author’s calculations* 40.3 351.6 493.3 2025 2030 337.4 459.2 36.3 39.6 373.7 498.8 702 760.5 632.6 45.4 40.1 33.4 587.2 661.9 727.1 2035 2040 2045 527.9 580.0 617.9 34.2 27.7 19.8 562.1 607.7 637.7 901.3 819.1 866.2 Urban (medium fertility) 24.4 15.0 5.4 794.7 851.2 895.9 Urban (low fertility) 2050 2055 2060 9.7 650.5 1.9 665.7 0.4 665.6 Rural (medium fertility) Rural (low fertility) *Using World Bank (2020d), Hutton and 660.2 667.6 666 Varughese (2016) on previous results. TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 118 119 857 FIGURE 19B. 791 COST OF MAINTAINING CURRENT ACCESS LEVELS FOR ELECTRICITY, WATER AND SANITATION / PIPED OR IMPROVED WATER PROVISION Source: Author’s calculations* 231 560 230 627 2025 2030 224 547 216 597 771 813 954 990 911 223 688 214 740 203 787 2035 2040 2045 205 639 195 675 183 700 844 870 883 1,027 1,053 1,069 Urban (medium fertility) 189 838 175 878 160 909 Urban (low fertility) 2050 2055 2060 167 724 156 732 156 729 Rural (medium fertility) Rural (low fertility) *Using World Bank (2020d), Hutton and Varughese (2016) on previous results. 891 888 885 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 120 121 FIGURE 19C. 535 582 COST OF MAINTAINING CURRENT ACCESS LEVELS FOR ELECTRICITY, WATER AND SANITATION / IMPROVED AND PRIVATE SANITATION Source: Author’s calculations* 139 396 138 444 2025 2030 134 387 130 423 521 553 621 679 652 134 487 122 557 128 524 2035 2045 2040 123 452 110 496 117 595478 575 606 706 727 740 Urban (medium fertility) Urban (low fertility) 113 593 105 622 96 644 2050 2055 2060 100 512 94 518 94 516 Rural (medium fertility) Rural (low fertility) *Using World Bank (2020d), Hutton and Varughese (2016) on previous results. 612 612 610 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 122 123 D.3.4 about 3.25 percent of GDP under the lower FIGURE 20A. Rural (medium fertility) ‘ENHANCED fertility path. Certainly, differences in the POPULATION (IN MILLIONS) TO BE PROVIDED ACCESS UNDER Rural (low fertility) EQUILIBRIUM’ OR savings due to different fertility paths are BUSINESS AS USUAL SCENARIO / Urban (medium fertility) not as discernable during the early years, ELECTRICITY FROM GRID OR SOLAR ACCESS FOR ALL - Urban (low fertility) where the difference in population growth Source: Author’s calculations* THE COST OF is still very small (Figure 21). However, MEETING THE SDGS cumulative spending on all three sectors Persons with access (Millions) 60 until 2060 would amount to US$ 42.4 bil- In order to meet the SDGs in all three lion under the medium fertility and US$ sectors, rural areas may require tai- 37.4 billion under the low fertility scenar- lored attention. This is shown in each io, suggesting cumulative savings of more of these figures below by the steep rise than US$ 5 billion. 52.5 of providing access to the rural popula- 50.8 51.0 50.0 50 tion until 2030. Like the estimates with The investment requirements, as 48.5 access kept constant at current rates, percentages of GDP, calculated by Ran- access by the initial starting population ganathan and Foster (2012), are slightly 46.4 45.9 45.5 45.8 45.0 45.3 in both rural and urban areas are shown above the percentages computed in 43.9 43.9 44.4 for 2020. By 2030, universal access in this analysis, but not significantly so. 42.1 both rural and urban areas is reached More specifically, excluding operation and 40.9 40.9 and then maintained until 2060. As maintenance and focusing only on the cost 40.0 39.5 40 expected, the increases in access are for energy, water supply and sanitation far steeper than under the ‘Business as (WASH), they estimate an average annu- 36.0 Usual’ scenario. al spending requirement of 3.6 percent of 33.5 GDP, slightly above the percentages com- puted in this analysis (0.26 and 0.35 GDP For example, access to 31.1 30 points for the medium and low-variants, rural sanitation would respectively). Another difference is that the 28.2 28.0 28.0 need to increase by proportion of investment in energy versus 26.5 the WASH sectors is slightly higher in this nearly ten-fold, from 23.0 analysis because power generation has not the current 5.8 million been included in the cost estimates of this 22.1 20 to 51 million under the study, as generation capacity is expected 18.5 to be financed by private investors in that 18.1 medium and 44 million competitive segment of the energy sector under the low fertility and also because the SDGs are slightly more scenario (Figure 20). demanding for the WASH sector, which 10.2 11.0 makes WASH investments more costly.42 10.9 10 7.6 The projected costs are front-loaded to- ward the early years and decrease over time, with the low-fertility scenario incurring significant cumulative fiscal saving of 12 percent up to the year 2060. 42. Specifically, the SDGs specifies the Even though far higher costs need to be WASH goal as ‘bacteria-free drinking 0 shouldered in the years up to 2030, the to- water’, which cannot be necessarily guar- tal average spending until 2030 is still shy anteed in urban areas through improved 2020 2025 2030 2035 2040 2045 2050 2055 2060 of 3.35 percent of GDP annually under the water sources and ‘safely managed’ medium-fertility path and slightly lower at sanitation with safe excreta disposal. *Using Uganda National Household Survey 2016/17, UN World Population Prospects (2019). TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 124 125 FIGURE 20B. Urban (medium fertility) FIGURE 20C. Urban (medium fertility) POPULATION (IN MILLIONS) TO BE PROVIDED Urban (low fertility) POPULATION (IN MILLIONS) TO BE PROVIDED Urban (low fertility) ACCESS UNDER BUSINESS AS USUAL SCENARIO / ACCESS UNDER BUSINESS AS USUAL SCENARIO / Rural (medium fertility) Rural (medium fertility) PIPED OR IMPROVED WATER WITHIN 30 MINUTES DISTANCE IMPROVED AND PRIVATE SANITATION Source: Author’s calculations* Rural (low fertility) Source: Author’s calculations* Rural (low fertility) 18.5 18.5 9.7 3.6 11.0 11.0 19.5 28.2 18.1 40.9 5.8 28.2 18.1 40.9 9.7 10.9 3.6 10.9 19.5 28.0 40.0 5.8 28.0 40.0 2020 2025 2030 2020 2025 2030 23.0 28.0 33.5 23.0 28.0 33.5 22.1 43.9 26.5 46.4 31.1 48.5 22.1 43.9 26.5 46.4 31.1 48.5 42.1 43.9 45.0 42.1 43.9 45.0 2035 2040 2045 2035 2040 2045 39.5 45.9 52.5 39.5 45.9 52.5 36.0 50.0 40.9 50.8 45.8 51.0 36.0 50.0 40.9 50.8 45.8 51.0 45.5 45.3 44.4 45.5 45.3 44.4 2050 2055 2060 2050 2055 2060 *Using Uganda National Household Survey 2016/17, UN World Population Prospects (2019). TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 126 127 FIGURE 21A. FIGURE 21B. COSTING TO MEET THE SDGS FOR COSTING TO MEET THE SDGS FOR ENERGY, WATER AND SANITATION ENERGY, WATER AND SANITATION AND BEYOND / ELECTRICITY AND BEYOND / WATER PROVISION PROVISION (USD MILLION) (USD MILLION) 555 1,346 391 1,138 Source: Author’s calculations* Source: Author’s calculations* 736 539 664 1,290 1,516 379 1,987 1,099 Urban (medium fertility) Urban (medium fertility) Urban (low fertility) Urban (low fertility) 725 634 1,486 1,906 Rural (medium fertility) Rural (medium fertility) Rural (low fertility) Rural (low fertility) 2025 2030 2025 2030 771 832 888 1,004 1,019 1,098 822 713 774 755 718 785 253 914 896 934 155 116 727 673 608 70 113 2035 2040 2045 215 2035 2040 2045 948 995 1,032 1,196 1,280 1,347 643 567 491 813 823 819 979 1,001 1,001 524 467 467 82 50 18 2050 2055 2060 33 6 1 2050 2055 2060 *Using World Bank (2020d), Hutton and Varughese (2016) on previous results. TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 128 129 FIGURE 21C. USD million COSTING TO MEET THE SDGS FOR ENERGY, WATER AND SANITATION AND BEYOND / 2,000 SANITATION 1,884 1,901 Source: Author’s calculations* 1,870 1,864 1,848 1,827 1,800 1,699 1,628 1,600 1,537 1,422 1,400 1,316 1,297 1,290 1,279 1,226 1,197 1,200 1,167 1,106 1,086 1,052 1,000 800 600 Urban (medium fertility) Urban (low fertility) 400 Rural (medium fertility) 330 298 Rural (low fertility) 266 260 230 210 187 300 160 *Using World Bank (2020d), Hutton and 131 109 Varughese (2016) on previous results. 93 93 Note: Medium-fertility projection in orange and green; low-fertility projections in light 0 orange and light green. 2025 2030 2035 2040 2045 2050 2055 2060 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 130 131 D.3.5 Outside of Kampala, Uganda’s other cities THE ROLE OF and regions collect lower taxes and, there- SMART POLICIES fore, require extra transfers to meet the SGDs goals. Uganda’s local governments are AND PLANNING IN highly dependent on transfers from central bud- FACING THE RISING gets and they have little revenue that can guard URBAN POPULATION them against their fluctuations, which leads to a lack of financial flexibility for local investment The higher population density that will be decisions. This is particularly true for local gov- observed in Ugandan cities over the next four ernments outside of Kampala, which collected decades can bring opportunities if well-man- an average of US$ 26 per capita from various aged. Higher densities enable efficient public locally administered taxes, compared to US$ service provision since the cost per person to 59 per capita in Kampala for the year 2013/14 lay the infrastructure for roads, drainage, pipes, (Ibid). Additionally, many cities in Africa do mass transit, and electricity lines are shared, not have the responsibility to perform all the generating economies of scale not feasible with- required functions (i.e. cadaster management, out them. However, urban densities can also property taxation, infrastructure investments, generate negative externalities – from traffic etc.). In cases where they do, political economy congestions to human health threats caused by considerations often prevent the fair application inadequately managed sewage – that threatens of property and asset taxes. urbanization’s promises of improved livability and prosperity. Retrofitting sewage pipes in Uganda can increase its capacity to address informal, non-planned areas increases access the growing population challenges and meet costs substantially and can result in complicat- the SDGs by improving land administration ed land acquisition and resettlement processes. and land rights and the ability to plan and It is thus important for cities and their govern- implement urban infrastructure and private ments to lead the urban development and not to investments in cities. While fiscal space is very follow it. According to a recent regional policy limited – much of the recent uptake of private report on Africa’s urbanization (Hommann and investments were going towards the energy Lall, 2019), this requires: sector followed by transport– Uganda can aim to improve (i) land administration system with 1 A functioning land administration system formal, readily transferrable land rights, and (ii) with formal, readily transferrable land rights. the capacity to plan, coordinate and regulate private investments in infrastructure. Reaching 2 Capacity to plan, coordinate, and regulate these goals requires less financial capital and infrastructure and private investments. more political capital. Not even 20 percent of Uganda’s private land is registered and titled 3 Financing from donors or the private sec- (Ibid), and much of the remaining non-private tor to leverage the sizeable cost of network land is constrained by the complex customary infrastructure investments, while assuring land regulations. Addressing these capacities will local governments of predictable transfers lead to more financial support from donors and to manage the operation and maintenance of the private sector and allow the attainment of the infrastructure assets. country’s infrastructural goals. TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA D. SERVICE DELIVERY IN LIGHT OF UGANDA’S POPULATION PROJECTIONS 132 133 As discussed above, Uganda is in Similarly, while Uganda has made nities given that a larger share of the the early stage of its demographic considerable progress in reducing population will reside in urban centers transition, and one of the main chal- poverty in the last two decades, in the years to come. lenges over the next 40 years will be this issue remains at the center of to ensure that the growing young its development pathway. While the This section highlights the magnitude population bulge has access to pro- incidence of poverty is considerably of the jobs and poverty challenge by ductive job opportunities. Recent lower now than it was two decades exploring the implications of popu- experience shows that it is not an easy ago, the recent trends show a reversal lation growth over the next 40 years endeavor: while the working-age pop- of that trend. The poverty headcount in terms of select labor market and ulation has been expanding rapidly, at rate under the international poverty poverty indicators. In particular, it around 3.9 percent per annum between line of U$1.90 a day stands currently shows how the rapid expansion of the E 2011 and 2017, and is more educated at 41.6 percent, around 20 percentage working-age population poses a major than before 43, labor demand has not points lower than in 2002 (62.2 per- challenge for the sluggish labor market increased at the same pace (Merotto cent). Nonetheless, and reflecting the in Uganda. In addition, and based on 2019). After increasing in the late 2010s, high degree of vulnerability to exter- GDP per capita projections, it shows how labor force participation has fallen, nal shocks (such as weather and price the incidence of international poverty is especially for young people and wom- shocks) that households face, poverty likely to evolve between 2020 and 2060. en.44 These are worrisome trends, as increased moderately between the two one of the mechanisms through which most recent official measurements. countries capitalize on a demographic Poverty increased from 34.6 percent in transition process is through increased 2012/13 to 41.6 percent in 2016/17, a 6 income generated both by the growing percentage-point increase that resulted youth population and women entering in an increase of the poor population by the labor force. 4.5 million people. IMPLICATIONS FOR Moreover, Uganda’s labor market is characterized by slow structur- Poverty in Uganda remains a rural phenomenon, with 90 percent of the LABOR MARKET al transformation and low labor poor population residing in rural ar- productivity, which is reflected in eas. In addition, the poverty increase poor-quality jobs. Most workers are observed in recent years was mostly AND POVERTY engaged in agriculture—close to 65 percent of the labor force in 2016—even driven by an increase in rural poverty, as poverty rates in urban centers have INDICATORS though the sector accounts for less than remained stagnant for the past decade. a quarter of the country’s GDP. Further- The increase in rural poverty is mainly 43. The primary level completion rate more, the productivity of that sector is attributed to households engaged in ag- (for both men and women) increased well below comparable peers in Africa. riculture who suffered the consequences from 39 percent in 2011 to 44 percent Wage employment is scarce (24 percent) of a severe drought that affected the in 2016. http://data.uis.unesco.org E1. METHODOLOGICAL CONSIDERATIONS Page 136 and underemployment is persistent, re- country for the better part of 2016 and flecting high levels of dependence on 2017. Going forward, in order to contin- 44. In the case of young individuals, E2. LABOR MARKET AND POVERTY TRAJECTORIES Page 138 subsistence agriculture.45 At the same ue a path of poverty reduction, Uganda this is partly but not totally explained UNDER DIFFERENT POPULATION SCENARIOS time, the overall quality of jobs is no- will need to adopt measures to reduce by an increased school attendance. tably low. In addition, labor earnings the vulnerability of households to exter- have been falling across the board, as nal shocks and enhance the income of 45. Where mean working hours are E3. FACING THE LABOR MARKET AND POVERTY Page 150 is expected when supply exceeds de- the rural poor while ensuring that those irregular (below 30 hours per week) CHALLENGES OF POPULATION GROWTH mand, particularly in the services sector residing in urban areas have increasing and earnings are low (below 35 USD (Merotto, 2019). access to income generating opportu- per month), Merotto (2019). TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA E. IMPLICATIONS FOR LABOR MARKET AND POVERTY INDICATORS 134 135 TABLE 7. MAIN SOURCES FOR INDICATORS USED IN DEMDIV 48 Topic Secondary Education Demographic Health Survey for the country (DHS, 2016) Demographic indicators and the UN Population Division (UN PopDiv 2019). WHO, UNICEF, UNFPA, the World Bank and UN E.1 medium and low population variants discussed Health indicators PopDiv for the year 2019. in Chapter 3. More specifically, the data comes from METHODOLOGICAL a number of publicly available sources (see Table 7), CONSIDERATIONS UNESCO Institute for Statistics Database (2014) and and the two alternative population scenarios mimic Education indicators the medium and low-variant population projections the Barro-Lee dataset (2014). by the UN population Division for the period 2020 The projections for the labor market indica- through 2060 (see Box 1 for further details on the tors are based on the Demographic Dividend population growth assumptions used in the model). World Economic Forum (2015) and the World Economic indicators (DemDiv) Model, which is designed to gauge the Development Indicators dataset (2013). potential economic benefits of the demographic The poverty incidence projections are based dividend in high fertility countries. DemDiv is on the poverty projection tool developed by an open-access, customizable projection model the Poverty and Equity Practice of the World 48. For a full list and the description of the variables used see Moreland et al., 2014; Appendix A., p. 29 developed by the U.S. Agency for International Bank. More specifically, they are based on a ‘pov- Development (USAID) through the Health Poli- erty-to-growth elasticity’ (PGe) methodology. The cy Project.46 It is structured as a two-part model PGe is understood as the rate of change in the pov- that projects demographic changes and economic erty rate brought about by the change in real GDP BOX 1. changes with equations to estimate employment per capita. This elasticity varies depending on a POPULATION GROWTH ASSUMPTIONS USED IN THE DEMOGRAPHIC DIVIDEND (DEM DIV) and investment, along with an estimation of ‘pass-through’ indicator, the factor of adjustment GDP and GDP per capita. More specifically, the between GDP per capita growth and the welfare demographic component underlies the model aggregate growth (found in household surveys). structure, projecting child mortality, dependency Conceptually, a higher pass-through rate signals The DemDiv model is run under two alternative pop- reaching a CPR of 70 percent by 2060. The CPR growth ratio, fertility, population size and structure, and more inclusive growth, in which poverty responds ulation growth scenarios (a medium-variant and a under the medium-variant scenario corresponds to an life expectancy. These demographic calculations more significantly to economic growth, while a low-variant scenario). The medium-variant scenario increase from the current prevalence rate in Uganda then feed into the economic model, which consists lower pass-through rate signals that poverty is not assumes a moderate and gradual growth in the contra- to a level for a reference country such as Kenya. As an of three equations describing capital formation, as affected by economic growth. For this study we ception prevalence rate (CPR) from 26 percent in 2020 additional reference, the CPR average in low-income employment growth, and total factor productivity consider two alternative pass-through scenarios: a to 39.4 percent in 2060. Following standard practice for countries was 35 percent and in lower-middle income as a function of age structure and other social and high pass-through setting which assumes a factor of demographic variables, the definition for CPR is the ratio countries it was 52 percent in 2014. The alternative economic variables. The two model components 1 and a medium pass-through scenario in which the between the number of women aged 15 to 49 using any low-variant scenario resembles the pathway towards the interact over the projection period to describe the elasticity is adjusted by a factor of 0.87. contraceptive method (modern or traditional) and the level of contraceptive use in middle-income countries, for combined effects of changes in both sub-models, total number of women in that age range. which the average CPR was 65 in 2014 .49 ultimately projecting GDP and GDP per capita. 47 46. http://www.healthpolicyproject.com/ Alternatively, the low-variant scenario assumes a faster 49. Data source for fertility indicators: www.data. The model was calibrated with the latest rate of growth in the use of contraception in Uganda, worldbank.org/indicators, accessed April 29, 2020 data available for Uganda and run under two 47. See Moreland et al., 2014 for fur- population growth scenarios that mimic the ther technical details. TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA E. IMPLICATIONS FOR LABOR MARKET AND POVERTY INDICATORS 136 137 E.2 middle-income country (LMIC)53 status until 2033.54 Only by then, would GDP per capita grow enough (about 20 percent in FIGURE 22A. LABOR INDICATORS AND GDP PER CAPITA 2020-2060 / Medium variant Low variant LABOR MARKET AND real terms over the next 13 years or an average of 1.4 percent real GAP BETWEEN THE LABOR FORCE AND EMPLOYMENT Source: Author’s calculations based on Dem Div projections POVERTY TRAJECTORIES growth per year), from the current level of US$710 (in constant 2010 prices). Moreover the 13-year horizon occurs under the more UNDER DIFFERENT optimistic low-variant scenario (Figure 22c). Under the more likely 30 Millions POPULATION SCENARIOS scenario, Uganda would have to wait until 2038 to become a LMIC. By 2060, the difference between the two scenarios is considerable, with a GDP per capita almost 40 percent higher under the low fertility variant. For refence, this is similar to the gap in GDP per capita currently observed between Uganda (US$710) and Ethiopia Our results indicate that the employment gap will increase (US$570)55, suggesting that there are substantial gains to effectively 25.3 considerably over the next 40 years, creating a heavy burden manage population growth over the medium term. on the Ugandan labor market. Age-specific population projec- 25 tions reveal that the labor market will need to accommodate 14 50. As mentioned in Chapter 3, the two scenarios million additional workers by 2040, under both the medium and show very little difference in terms of the population 22.3 22.0 low-variant scenarios.50 While the number of new entrants to projections of age groups up until 2040. the labor force is expected to peak after 2050 (at a level of 1.2 to 1.4 million people per year; see Figure 22b) the employment gap 51. For the analysis throughout this section the labor force is 20.2 (defined as the difference between the number of people in the defined to include all the population aged 15 and above. 19.4 labor force51 and the number of people employed52 will grow at a steady pace of 350,000 jobs per year or at an average annual rate 52. Following ILO standards, employment is defined as work performed 18.1 20 of 3 percent throughout 2020-2040 (Figure 22a). The jobs deficit in return for pay or profit. This definition, adopted by ILO since 2013, 16.7 will double by 2045, from the current, already burdensome value; is suitably narrower than the scope of the previous definition which reaching 16 million people (about 29 percent of the total labor included some unpaid activities such as subsistence work (ILO, 2013). 16.0 force) under both of the projection variants. 14.5 53. The World Bank classifies the world’s economies into four Under the most likely scenario, the medium-variant, the income groups — high, upper-middle, lower-middle, and 14.1 employment gap will increase threefold by 2060, reaching low (For further details about the country classifications 12.7 12.5 a value of 25 million jobs (or lack of job opportunities). The see: https://datahelpdesk.worldbank.org/knowledgebase/ 15 number will be lower under the low-variant scenario: by 2060, articles/906519-world-bank-country-and-lending-groups). 10.9 10.8 the Ugandan economy will need to create 3.3 million jobs less at that time if population growth is curbed under this lower fertility 54. This calculation is based on the current country income classification outlook (Figure 22a). It must be noted that while the model is thresholds determined by the World Bank at the start of each fiscal 9.1 9.0 projecting an economy that is growing in real terms over the next year; in this case FY19-20. The lower-middle income country (LMCI) 40 years, it is not assuming major changes to its structure, which thresholds were set at GNI per capita (current US$) values ranging 7.7 7.7 partly explains the sizeable employment gap projected. At the between US$1,029 and US$3,995. To calculate the corresponding same time, under the low-variant scenario, the number of en- threshold in terms of GDP per capita we first inferred the conversion 10 trants to the labor market increases to 1.2 million by 2050, and by factor between the two per capita output measures (i.e. GNI and 2060 the labor market will be welcoming one million new partic- GDP in constant 2010 US$) using the latest values for 2019. This ipants, 29 percent less than under the medium-variant scenario. factor was then used to construct the projected GNI series for the 2020-2060 period. The deflated value of the current US$1,029 The projections also suggest that Uganda is still more than a threshold corresponds to a threshold of US$876.92 in constant decade away from attaining low-middle income status and 2010 US$. Using the constructed GNI series we determine that that there are significant economics gains to curbing fertility. Uganda crosses threshold crossed in 2033 when the GNI per capita The DemDiv model is also able to project the country’s economic is projected to reach a level of US$888 (in constant 2010 prices). 0 over the next 40 years under the alternative population growth scenarios. The results indicate that Uganda will not obtain low 55. In constant 2010 prices. 2020 2025 2030 2035 2040 2045 2050 2055 2060 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA E. IMPLICATIONS FOR LABOR MARKET AND POVERTY INDICATORS 138 139 Millions FIGURE 22B. 1.6 LABOR INDICATORS AND GDP 1.4 1.4 1.4 PER CAPITA 2020-2060 / 1.3 1.2 ENTRANTS TO THE LABOR 1.2 1.2 FORCE PER YEAR 1.1 1.1 1.2 1.1 1.0 1.1 1.0 Source: Author’s calculations based 1.0 1.0 1.0 on Dem Div projections 0.9 0.9 0.8 0.4 0.4 0.2 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 Medium variant Low variant -0.4 Difference 2020 2025 2030 2035 2040 2045 2050 2055 2060 FIGURE 22C. US$ LABOR INDICATORS AND GDP 2,000 PER CAPITA 2020-2060 / GROSS DOMESTIC PRODUCT PER CAPITA 1,800 (IN CONSTANT 2010 US$) Source: Author’s calculations 1,600 based on Dem Div projections 1,411 1,400 1,294 1,191 1,200 1,099 1,053 1,019 1,023 1,000 947 989 867 954 922 890 800 840 789 710 780 Medium variant 600 Low variant 2020 2025 2030 2035 2040 2045 2050 2055 2060 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA E. IMPLICATIONS FOR LABOR MARKET AND POVERTY INDICATORS 140 141 share of vulnerable people as a pro- the bottom of the distribution more (high portion of the total population will pass-through elasticity assumption) low- decline, the number of vulnerable ers the poverty incidence to 22 percent people will increase by 2060, with im- (which would half the current poverty portant implications for the planning rate) and would only increase the number of social safety nets. Often, those living of poor by one million (see Figure 23c) at under U$3.2 (2011 PPP) a day – derived the end of the 40-year period. from the national poverty lines in low middle-income countries – are consid- As with poverty, the proportion of ered to be vulnerable: either living in the population considered vulnera- poverty or at risk of falling into poverty ble declines considerably under the as a result of a covariate or idiosyncratic low-fertility scenario, in comparison shock.57 Under the medium-variant and to the medium-fertility scenario. The medium pass-through assumptions, the projections show that efforts in reduc- While the poverty rate is expect- proportion of vulnerable is projected to ing fertility would be translated into ed to decline steadily over the next decline from 70 percent in 2020 to 61 a vulnerability rate that is 6 percent- 40 years, the number of poor will percent by 2060, while the number of age-points lower compared to the most increase in Uganda. The empirical vulnerable under the medium-variant likely scenario (see Figure 23a).58 This exercise shows under the most likely scenario is projected to increase from 32 is in turn would represent an annual population projection scenario (medi- million to 63 million people (an increase average reduction close to 0.4 percent um-variant), and assuming a medium close to 50 percent, see Figure 23b). between 2020 and 2060. A marked pass-through, the incidence of poverty These results suggest that the need for difference between the different popu- under the international poverty line of a comprehensive social-protection sys- lation scenarios is observed with respect U$ 1.90 (2011 PPP) a day will decline tem will persist over the medium term. to the number of vulnerable: 14 million from 41.6 in 2020 to about 30 percent As before, these numbers only improve less vulnerable people would be expect- in 2060 (see Figure 23a).56 However, giv- marginally under the more inclusive ed under the low fertility scenario (a 22 en the rate at which the population will growth scenario (high pass-through), percent difference) in 2060, as shown continue to expand, even though the as shown in Figure 23d. in Figure 23b. Thus, a reduction in the rate is falling, there will be an increase pace at which population grows pro- in the number of poor to around 12 mil- Under the low fertility variant scenar- vides clear gains in terms of the welfare lion (a 63 percent increase), reaching 31 io, the poverty incidence in Uganda is of the population as well as the number million poor Ugandans in 2060. Results projected to decrease while the number of poor and vulnerable people. are only slightly more positive when a of poor remains relatively unchanged more inclusive growth profile (bene- between 2020 and 2060 (although a fitting the poor more) is assumed (see significant decline compared to the 56. The U$ 1.90 a day (2011 PPP) -the in- Figure 23c). In that case, by 2060 the medium-variant scenario). A curb in ternational poverty line- is the average of poverty rate will decline to 29 percent, fertility, as assumed under the low-variant the national poverty lines of the poorest while the number of poor will reach 29 population scenario, reduces the propor- 15 countries in the world (expressed in million (an additional 11 million poor tion of the population living in extreme 2011 PPP dollars of 2011) and is often at the end of period compared to the poverty under the medium pass-through referred as the extreme poverty line. current 19 million). Overall, the results assumption to 24 percent by 2060, a 6 suggest that in order to reduce poverty, percentage-point reduction compared to 57. This is an approximation, as there there is a need for more radical pover- the medium-variant (see Figure 23a). In are more sophisticated definitions of ty-reducing policies and a structural addition, in this particular case the num- vulnerability, see Chaudhuri (2003). transformation of the economy. ber of poor remains relatively stable at 22 million poor Ugandans by that same year, 58. The proportion of the population A similar pattern is expected for the around 2 more million than currently es- considered vulnerable would vulnerable population: while the timated. A growth trajectory that benefits reach 55 percent by 2060. TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA E. IMPLICATIONS FOR LABOR MARKET AND POVERTY INDICATORS 142 143 FIGURE 23A. Percentage of the population POVERTY RATES AND NUMBER OF POOR 2020- 80 2060 / PROJECTED POVERTY RATES (MEDIUM PASS-THROUGH ELASTICITY) Source: Author’s calculations 70 based on Dem Div projections 68 70 and UNHS surveys 67 66 65 65 64 63 62 63 61 61 61 60 60 58 56 55 50 42 39 40 36 38 35 34 33 35 32 33 31 30 30 31 29 27 26 24 20 Medium variant $3.2 / day PPP Low variant $3.2 / day PPP Medium variant $1.9 / day PPP Low variant $1.9 / day PPP 10 2020 2025 2030 2035 2040 2045 2050 2055 2060 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA E. IMPLICATIONS FOR LABOR MARKET AND POVERTY INDICATORS 144 145 FIGURE 23B. Low variant $1.9 / day PPP FIGURE 23C. Low variant $1.9 / day PPP POVERTY RATES AND NUMBER OF POOR 2020-2060 / Medium variant $1.9 / day PPP POVERTY RATES AND NUMBER OF POOR 2020-2060 / Medium variant $1.9 / day PPP PROJECTED NUMBER OF POOR PROJECTED POVERTY RATES (HIGH PASS-THROUGH ELASTICITY) (MEDIUM PASS-THROUGH ELASTICITY) (MILLIONS) Low variant $3.2 / day PPP (PERCENTAGE OF THE POPULATION) Low variant $3.2 / day PPP Source: Author’s calculations based on Dem Div Medium variant $3.2 / day PPP Source: Author’s calculations based on Dem Div projections and UNHS surveys Medium variant $3.2 / day PPP projections and UNHS surveys 2020 19 19 32 32 2020 42 42 70 70 2030 21 22 38 39 2030 35 36 64 65 2040 22 25 43 47 2040 30 33 60 63 2050 22 29 47 56 2050 26 31 57 61 2060 22 31 49 63 2060 22 29 53 59 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA E. IMPLICATIONS FOR LABOR MARKET AND POVERTY INDICATORS 146 147 FIGURE 23D. POVERTY RATES AND NUMBER OF POOR 2020-2060 / PROJECTED NUMBER OF POOR (HIGH PASS-THROUGH ELASTICITY) (MILLIONS) 32 39 47 55 62 Source: Author’s calculations based on Dem Div projections $3.2 / day PPP and UNHS surveys 32 37 42 46 48 2020 2030 2040 2050 2060 19 21 24 27 30 $1.9 / day PPP 19 20 21 21 20 Medium variant Low variant 2020 2030 2040 2050 2060 TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA E. IMPLICATIONS FOR LABOR MARKET AND POVERTY INDICATORS 148 149 E.3 most likely population scenario. While an effort to curb fertility will lessen the bur- indicated by many (Merotto 2019, World Bank 201860) as key first steps Uganda can enhance the resilience of households to shocks, in addition to FACING THE den moderately, particularly after 2035, in this direction. This will necessar- the role they play in supporting hu- LABOR MARKET this will still be a considerable burden for ily need to be accompanied by larger man capital investments, particularly the country’s labor market.59 investments, both by the public and in the long term (World Bank, 2020c). AND POVERTY private sectors (UNICEF, 2020). At the moment, given that financing It seems unlikely that, CHALLENGES The projections also indicate that to the sector is limited, the existing direct income support programs only without a profound OF POPULATION Uganda is still more than a decade reach 3 percent of the population. transformation, Uganda’s GROWTH away from attaining low middle-in- Considering the government’s limit- labor market will be able come status and that the country ed fiscal space, it would be beneficial will still be grappling with a consid- to consider a shock responsiveness to rise to this challenge. erable number of poor in 40 years. approach to social protection and to At the moment, the While the poverty incidence rate un- focus the expansion of programs to The results presented in this sec- economy is not creating der the international poverty line is the poorest individuals in the need- tion highlight that perhaps one expected to decline steadily between iest geographical areas. Existing of the biggest challenges posed employment at a 2020-2060, the number of poor is pro- disaster risk financing pilots are a by the population projections sufficient pace to provide jected to increase due to the pace at good alternative to scale up, as well for Uganda in the medium term enough job opportunities which the population expands. Under as agricultural insurance, which can is labor demand. As discussed in the most likely population scenario, help rural household to cope with the Chapter 2, the full economic benefits to the Ugandan youth. the poverty incidence rate under the recurrent weather shocks. At the same of going through a demographic tran- U$1.90 a day is set to reach 30 per- time, given the low coverage of social sition can be achieved only if there is The challenge not only comprises cent by 2060, resulting in a total of insurance schemes, fiscal incentives strong demand for labor: the supply the creation of more jobs, but also 31 million poor Ugandans. The little may need to be provided to improve of labor is not enough in the absence higher quality jobs. At the moment, progress in terms of the number of take-up of voluntary savings schemes of insufficient demand. Moreover, nearly three out of four workers in poor, despite a favorable (although not by informal sector workers, which the workforce has to be engaged in Uganda are still non-wage workers, spectacular) real growth rate shows make up 90 percent of Uganda’s labor productive economic activities in who largely work for themselves or the need to promote a more inclusive force (World Bank, 2020c). order for the country to experience contribute to the family business in economic model. The link between an increase in the income of house- low productivity activities. While economic growth and poverty reduc- holds. As pointed out by Canning et this ensures their livelihood, these tion may be strengthened by allowing al. (2015), the East Asian economies jobs add little value to the economy those at the bottom to benefit from were able to reap a demographic and can be precarious and unstable. the sectors driving growth, which is dividend thanks to the combination Over the next few decades, Uganda currently not the case. Moreover, the of a fast demographic transition and requires policies to accelerate its GoU can strongly focus on a strategy to export-oriented economies that ex- economic transformation, which is enhance the income of the rural poor panded the demand for labor. the basis for the creation of formal while at the same time managing ur- wage jobs in productive sectors of banization so that urban centers are The Ugandan labor market requires a the economy. This will entail faster welfare enhancing and help raise the profound transformation in order to and planned urbanization and in- living conditions of the population. be able to accommodate approximate- dustrialization transitions over the 59. Few countries in Africa (perhaps Mali ly 1.1 to 1.2 million new entrants into medium term, as well as providing Similarly, the vulnerability of and Gabon) have seen their workforces the labor force per year over the next the necessary conditions to attract falling into poverty will still be a grow at such as pace (Merotto, 2019). 40 years. The number of new entrants Foreign Direct Investment. The de- reality for a large proportion of the will increase to 1.1 million individuals per velopment of commercial agricultural Ugandan population by 2060. This 60. World Bank (2018). “Closing year starting in 2027, which will continue and agro-industrial activities, as well underscores the need for examining the Potential-Performance Divide to widen the existing labor gap under the as regional trade integration, has been how social protection programs in in Ugandan Agriculture.” TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA E. IMPLICATIONS FOR LABOR MARKET AND POVERTY INDICATORS 150 151 B engagement in reproductive and ma- ternal health and violence prevention in Rwanda: findings from a random- M Bloom, D. & Williamson, J. G. (1998). ized controlled trial. PLoS One, 13(4). “Demographic Transitions and Eco- Madhavan, S., and J. P. Guengant (2013). G nomic Miracles in Emerging Asia.” “Proximate Determinants of Fertili- The World Bank Economic Review 12 ty.” Background paper for this book, (3): 419-455. World Bank, Washington, DC, March. Bongaarts, J. (1978). “A Framework for Godinho, C. and A. Eberhard (2019), Learn- Merotto, D. 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TACKLING THE DEMOGRAPHIC CHALLENGE IN UGANDA REFERENCES 154 155 Uganda is entering a key stage of its development path given the expected demographic trends over the next 40 years. The population of Uganda, currently estimated at 46 million, will at least double between 2020-2060. Under the most likely scenario, the total population of Uganda will reach 104 million people by the year 2060. Around 70 percent of that population will be of working age, and about half of the population will reside in urban centers (a two-fold increase in the proportion of urban population observed today). Considering that the country already encounters multiple challenges in the delivery of basic services, specifically in education, health, electricity and water and sanitation, and in managing public investment projects, serving the projected population and improving the current access levels will not be an easy task.