Recent high growth has meant that Uganda halved its poverty rate from 1987 to 2010. However, that gain is not secure. Economic growth slowed in the five years before 2016, because of bad weather due to climate change, poorly executed public projects, spill-over effects of unrest in South Sudan, private sector credit constraints, and a decline in natural resources. Depletion of renewable natural resources represents a constraint to sustainable growth and poverty reduction.
Agriculture is key to the Uganda economy, which underscores the importance of sustainable resource management. A reliance on rain-fed agriculture, in the face of climate change, poses a risk to growth, incomes and exports. Land degradation, soil fertility loss, wetland reclamation, and fisheries declines are all major issues. Forests on private land are nearly lost, which puts pressure on national parks and forest reserves. Recent estimates put the overall cost of environmental degradation at 17% of GDP, of which 11% is due to soil degradation. Prospects for economic growth will ultimately be linked to sound and sustainable management of the country’s natural capital base.
The WESWG will take on the role of the Natural Capital Accounting Steering Committee. The Working Group provides policy and technical guidance for the water and environment sectors and includes representatives from key sectors, ranging from government to development partners to academia and NGOs. A Technical Working Group was created and will integrate stakeholders at the technical level and operationalize the Natural Capital Accounting implementation program’s work plan.
Policy entry points for natural accounting are broad and will include Uganda’s National Development Plan 3 and the annual budget process. Work on NCA will also generate data that will assist with national and international reporting on international commitments, including the CBD Aichi targets, and Uganda’s reporting to the UNFCCC on its Nationally Determined Contribution (NDC), Uganda Green Grown Development Strategy and the Sustainable Development Goals.
WAVES will finance the natural capital component of a broader World Bank umbrella program that includes integration of climate change, natural capital and sustainable environmental management into Ugandan planning.
The initial focus in Uganda will be on forests and wetlands. Water and watershed management are vital for farming, jobs and food, and for the sustainable use of Lake Victoria. Uganda’s tourism sector contributed 6.6% of GDP in 2016, beating coffee to become the country’s largest foreign exchange earner. Much of the uptick comes from nature and animal-based tourists, for which healthy forests are crucial. Uganda’s forests also supply over 80% of domestic energy consumption.
Climate change is increasing the severity of extreme weather and will have significant economic and social impacts. Without adaptation investment, climate change risks could cost Uganda a 2-4% annual reduction in GDP over coming decades.
WAVES’ engagement in Uganda is a chance to link NCA to climate by focusing on resilience and mitigation. Uganda targets forestry and wetlands as important areas for mitigation.
The story so far and the road ahead
Uganda is not new to natural capital accounting. In 2003 and 2005, some studies were undertaken by the Government’s Environment and Natural Resources Sector Working Group to assess the feasibility of introducing environmental sustainability into the SNA through environmental accounting. Results included some recommendations to develop future work including; strengthening the monetary valuation of forest resources and estimations of rents from resources.
Uganda published the world's first species accounts in March 2017. These experimental accounts built on the SEEA framework and generated a set of natural capital accounts that can support improved management of biodiversity and help monitor progress towards Aichi Targets and Sustainable Development Goals (SDG). More recently, the Ministry of Water and Environment undertook an economic valuation of Uganda’s forests and their contribution to the economy, by means of constructing pilot Forest Accounts using an adaptation of the SEEA framework.
Uganda NCA program was launched on October 23, 2018 by the MOFPED; the launch was chaired by Permanent Secretary/Secretary of the Treasury and included stakeholders from the government agencies, civil society, and academia. A draft work plan was developed jointly with the Government of Uganda.