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ItemDoes foreign aid promote exports in Uganda?(Makerere University, 2025-09)The research analyzed the impact of foreign aid on export performance in Uganda. The primary aim of the study was to examine whether foreign aid promotes exports in the short and long term. The study used the Autoregressive Distributed Lag model to investigate the relationships between exports, foreign aid, exchange rate, trade openness, and industrial output. Data were sourced from the World Bank World Development Indicators and the Bank of Uganda and comprised annual time series data from 1990 to 2023. The main findings concluded that foreign aid had a significant and positive effect in the long run, suggesting that it enhances export performance if well spent on productive investments such as infrastructure improvement, agricultural modernization, and trade facilitation. However, in the short run, foreign aid negatively affects exports due to currency appreciation, which reduces export competitiveness. Trade openness positively and significantly affected exports; both the exchange rate and industrial output had insignificant effects in the long run. The study concluded that foreign aid has positive effects on export performance in the long run if it is allocated to productive sectors. Among its key recommendations, the report urges Uganda to strengthen its aid absorption capacity, prioritize investments in productive sectors, and enhance coordination mechanisms to ensure that aid more effectively supports trade. Subject keywords: Exports, Foreign aid, Uganda
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ItemForeign trade and economic growth in Uganda(Makerere University, 2025-12)Foreign trade is often considered vital for economic growth, yet its actual impact in Uganda remains uncertain. This study investigated the relationship between foreign trade and economic growth over the period 1990 to 2024, focusing on whether trade openness contributed significantly to output expansion. The objectives were to examine both the long‑run and short‑run effects of foreign trade on economic growth, while controlling for investment, inflation, and population growth. Annual time‑series data were obtained from the World Bank’s World Development Indicators. The analysis employed unit‑root tests, Johansen cointegration procedures, and an Error Correction Model within the ARDL framework to capture dynamic relationships. The results revealed that foreign trade openness was not statistically significant in either the short run or the long run. This finding implies that Uganda’s growth has been driven more by other macroeconomic factors, such as investment and demographic changes, than by trade. Policy should therefore emphasize strengthening domestic capacity, diversifying production, and reducing reliance on imports to achieve sustainable growth. Subject keywords: Economic Growth, Foreign trade, Uganda
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ItemThe effect of government road infrastructure investment on economic growth in Uganda(Makerere University, 2025)Infrastructure development remains a key driver of economic growth and transformation, particularly in developing countries where access to basic infrastructure is often limited. Among the various forms of infrastructure, road transport plays a central role in facilitating trade, mobility, and access to services. In Uganda, the road network is the primary mode of transport, carrying over 90% of passenger and freight traffic (Muvawala et al., 2021). This makes road infrastructure critical for enabling agricultural development, market integration, regional connectivity, and overall productivity. Uganda’s road infrastructure carries about 95% of freight and 99% of passenger traffic linking rural producers to markets and urban centers (Eijbergen & Thompson, 2020). Recognizing this strategic importance, the Government of Uganda has consistently increased public investment in road infrastructure over the past two decades aiming to improve accessibility, reduce transport costs and stimulate economic activity across sectors such as agriculture, industry, tourism and trade (MoWT, 2023) by reducing transport costs, enhancing accessibility to remote areas and linking producers to markets, roads directly and indirectly stimulate economic activities (Kamedde, 2019; Mahebe & Mugobera, 2023). According to IbrahimIS (2020), such investments help overcome structural barriers that limit inclusive growth, especially in rural areas. Uganda’s road network consists of national roads, district roads, urban roads, and community access roads (DUCAR). In the 2020/21 financial year, a total of 341 kilometers of national and town roads were substantially completed, which is 221 km of national roads and 120 km of town roads. In addition, 16 bridges on the national road network were completed and 167.7 km of national roads were rehabilitated. By the end of the financial year, the total paved portion of the national road network had reached 5,591 km representing 26.6% of the entire network. The overall condition of the roads was said to be above the National Development Plan III (NDP III) targets, with 96.6% of paved roads and 81.7% of unpaved roads reported to be in fair to good condition (MoWT, 2022). Theoretical and empirical literature supports the view suggesting that well planned public infrastructure investment particularly in roads leads to increased output, employment and private sector growth (Barra et al., 2015; Chindengwike & Tyagi, 2022). Studies such as Kamedde (2019) found a long-run equilibrium relationship between government spending on road infrastructure and economic output. Similarly, Muvawala et al. (2021) reported that despite short-term economic distortions, road infrastructure spending generates positive growth effects in subsequent years. Mahebe & Mugobera (2023) illustrate that transport infrastructure contributes significantly to Uganda’s economic competitiveness and productivity. Global and regional literature provides support that infrastructure stimulates economic growth. Etensa et al. (2022) show that an increase in the African Infrastructure Development Index AIDI across East Africa increases economic growth demonstrating the broader significance of infrastructure quantity. Similarly, (Kodongo & Ojah, 2016) highlight the role of infrastructure particularly road access in boosting export diversification and cross border trade competitiveness in lesser developed economies. However, studies like Timilsina et al. (2023) caution that while infrastructure investment has long-term GDP benefits, the short-run effects of road projects may be negligible or even negative depending on execution and complementary investments in other sectors. Evidence from Sub-Saharan Africa affirms the importance of road infrastructure in spurring economic growth. Studies such as those by (Bado & Dunakhir, 2024) show that in low-income countries, road infrastructure reduces transaction costs, increases productivity and attracts foreign direct investment (FDI) which collectively stimulate growth and job creation. They however show that poor project execution, corruption and inadequate maintenance often hinder the expected benefits. This view is echoed by (Barra et al., 2015) who found that while improved transport linkages enhance rural welfare and access to markets, their impact is context dependent and may be weakened by factors like conflict and weak local capacity. In Uganda according to (Mahebe & Mugobera, 2023), road infrastructure investments captured under the AIDI have a strong and positive effect on Uganda’s GDP by enhancing production efficiency and enabling other factors of production. Their findings underscore the necessity of a holistic infrastructure investment strategy encompassing roads, electricity, ICT and water to ensure long-term and sustainable growth. Chindengwike & Tyagi (2022) further find a statistically significant long-run relationship between government infrastructure expenditure and economic development with roads contributing directly to public and private sector efficiency. Despite the wealth of evidence, countries continue to face key challenges including inadequate road coverage, poor quality roads, and inefficiencies in implementation and maintenance (Calderon, 2018; Bado & Dunakhir, 2024). In many regions, especially rural areas, poor road conditions hamper market access and limit economic opportunities. Additionally, there remains a critical need for Uganda specific empirical research that isolates and quantifies the contribution of government road infrastructure investment to national economic growth. Existing studies (e.g., Muvawala et al., 2021; Ibrahim et al., 2020; Kamedde, 2019) have made important strides but further analysis is required to inform policy on how best to align infrastructure financing with growth targets especially within the context of fiscal constraints and rising development needs. Uganda Vision 2040 provides the broad strategic framework for the country's long term socio economic transformation. It highlights the need for first class infrastructure particularly roads, railways and energy systems to facilitate Uganda’s transition to a middle income status (NPA, 2013). Vision 2040 emphasizes that a robust transport network is essential for unlocking economic zones and reducing logistical constraints that hamper private sector growth. The government’s Tenfold Growth Strategy further operationalizes Vision 2040 by identifying road infrastructure as a core pillar for achieving tenfold GDP growth. It proposes targeted investments in key transport areas, improved connectivity to industrial and agro processing zones and enhanced linkages between rural and urban markets to support inclusive growth and structural transformation (MoFPED, 2025). Further, the Fourth National Development Plan (NDP IV) 2025/26–2029/30 underscores transport infrastructure as a priority investment area for accelerating industrialization, regional trade and job creation. NDP IV builds on the achievements of NDP III and outlines a strategic focus on upgrading road networks, maintaining existing roads and leveraging private sector partnerships to enhance efficiency and financing of infrastructure projects (NPA, 2024). This study therefore seeks to examine the effect of government road infrastructure investment on economic growth in Uganda drawing from both national and international evidence to contribute to more effective infrastructure planning, allocation and policy formulation.
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ItemThe effect of the debt burden on women’s economic empowerment(Makerere University, 2025-10)Public debt remains a vital instrument for financing development in Uganda. However, the increasing burden of debt servicing raises concerns about its broader socio-economic implications, particularly on women. This study examines, The Effect of debt burden on Women’s Economic Empowerment in Uganda from 1991-2023. Existing literature highlights that debt servicing often limits government spending on sectors that support women empowerment. However specific ways in which the public debt burden negatively affects women empowerment remain underexplored particularly within the Uganda context. Using annual time-series data obtained from the World Development Indicators (WDI) and applying the Autoregressive Distributed Lag (ARDL) approach, the study analyzes both short run and long-run relationships between debt servicing and women’s economic empowerment, proxied by female labor force participation. Our findings show that a 1% increase in debt servicing leads to a 0.29% decrease in women empowerment in the long run and this can be attributed to the pressure that comes with servicing public debt with leads to diverting government resources that would have been allocated to social programs that support women empowerment to debt repayment. Conversely, economic growth and moderate inflation were found to enhance women’s participation in the labor force, while high interest rates, exchange rate depreciation, and capital-intensive foreign direct investment constrained empowerment outcomes. The study concludes that Uganda’s growing debt obligations reduce fiscal space for social investment critical to women’s welfare and productivity. Based on these findings, the study recommends that the government adopts gender sensitive fiscal and debt management policies to ensure that debt servicing does not affect funding for sectors that promote women empowerment. Subject keywords; Debt burden, Economic empowerment, Women
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ItemThe effect of environmental taxation on carbon emissions in the East African Community(Makerere University, 2025)Over the years, carbon dioxide emissions have become a global threat. It causes climate change, environmental degradation, pollution, and global warming. Rising temperatures, adverse health impacts, the loss of biodiversity, and extreme weather events, ranging from heavy rainfall to prolonged droughts, are among the visible consequences of unchecked carbon emissions. Rising carbon emissions not only affect ecosystems and human livelihoods but also undermine progress toward SDG 13 and SDG 3 in EAC. Several countries have implemented a range of policies, including introducing carbon taxes and promoting renewable energy, to curb emissions and accelerate the transition to a net-zero carbon emission world by 2050. However, the EAC countries have made limited progress in leveraging environmental taxation for carbon emission reduction. Moreover, existing environmental taxes act as a source of revenue for governments rather than tools to abate the adverse effects of climate change. While prior studies have investigated the relationship between environmental taxation and carbon emissions, this paper stresses that context-specific evidence was required to provide Policymakers with recommendations that work in EAC because “not one size fits all.” Additionally, there was a need to disaggregate total environmental taxes into specific categories: energy, transport, and pollution taxes, guiding policymakers to see which category should be given attention. The analysis was based on Uganda, Kenya, and Rwanda, and remains silent about other member countries due to the absence of data. The study covered a period running from 2001 to 2020. Static (FE and RE) and dynamic (FMOLS) panel data models were employed. The key findings indicated that pooled environmental taxes, energy, and pollution taxes reduce carbon emissions, while transport taxes had an insignificant effect. GDP per capita, technology, and population were found to increase carbon emissions. A unidirectional causality from environmental taxes to carbon emissions was found. Based on the findings, the East African region needs to increase the share of environmental taxes to increase their effectiveness. Instead of increasing transport taxes, countries need to redesign transport taxes. Strengthening environmental taxation in the EAC is not only vital to achieve EAC Vision 2050 of maintaining carbon emissions and temperatures below 5.1 metric tons and between 20°C and 30°C, respectively, but it is also critical for keeping EAC countries competitive in the European markets by meeting the standards of the Carbon Border Adjustment Mechanism. Subject Keywords: Environmental taxation; Carbon emissions; East African Community