Ugandan-German Government Negotiations

By Embassy of the Federal Republic of Germany Kampala

On 5th October 2016 Uganda and Germany successfully concluded government negotiations on the development cooperation program for the next two years. Germany committed a total of 93.5m EUR in grants.

On 5th October 2016 Uganda and Germany have successfully concluded government negotiations. The negotiations aimed to agree on the development cooperation program for the next two years.

Both sides agreed on new programs in the focus areas Energy, Water and Rural Development. These sectors are amongst the priority areas for Uganda. Further initiatives to strengthen Governance and Civil Society were concluded. All bilateral programs are implemented by GIZ and KfW – the German Development Bank. All initiatives aim to support Uganda to achieve its national targets within the Agenda 2030. Germany committed additional funding to assist Uganda in addressing the current refugee crisis caused by the renewed outbreak of fighting in South Sudan in July this year.

An important outcome of these negotiations was the inclusion of cooperation programs in the rural development area. Germany will invest a total of 46m EUR in Rural Development. Emphasis of the program should be on realizing the potential of Uganda’s agricultural sector. The agricultural sector provides huge potential for promotion of employment and income generation as well as to increase food security in Uganda.

In the water sector both governments agreed to refocus activities on water resources management and water for production, which should on one hand address the growing pressure on the water resources through increased use of water for production and on the other hand effects of climate change. This support should mainly focus on marginalized areas in northern Uganda, which are under additional pressure due to the rising influx of refugees from South Sudan.

In the energy sector the focus of the German development cooperation will lie on implementation of ongoing investment projects during the coming two years. Current initiatives almost 20 projects with a total value of 300m EUR, concentrate on energy production, access to the energy networks and distribution including the transmission to regional electricity networks. An example for these

projects is the successful GetFit Program. The German cooperation will emphasize on the promotion of private investments in the energy sector.

During the negotiations a financial cooperation agreement on a total amount of 75m EUR in loans for two transmission lines was signed: one from Mbale to Bulambuli (40m EUR) and one from Mbarara to Masaka (35m EUR). These funds were made available in addition to the support committed during the last government negotiations in 2013. This agreement was signed on 4th October 2016 by the Minister of State for Planning, Hon David Bahati, and the Ambassador of the Federal Republic of Germany, Dr Peter Blomeyer, at the Ministry of Finance, Planning and Economic Development.

Uganda records a steady growth of its economy by 5% yearly, which is mostly attributed to extensive infrastructure programs and improved policies on financial management. However, about 20% of the Ugandan population still lives below the poverty line despite these improvements. The exponential population growth and challenges with the public finance management systems are amongst the biggest obstacles for development in Uganda. Additional projects in the area of Governance and Civil Society are meant to address these issues with greater focus in the coming years.

The government negotiations were concluded by the signing of joined summary records on 5th October 2016 by the Deputy Secretary to the Treasury, Mr. Patrick Ocailap, for the Ugandan side and by the Director for East Africa of the Federal Ministry of Development Cooperation, Dr Ralf Mathias Mohs, for the German side.