The Ugandan economy rebounded strongly to 6.1% in FY17/18, up from 3.9% the previous year, and the country’s positive growth is expected to continue, according to the latest edition of the Uganda Economic Update released by the World Bank today.
The report, “Developing the agri-food system for inclusive economic growth” says the rebound was largely driven by a pick-up in investments and exports, and on the back of strengthened credit to the private sector and good weather. But the continued reliance on rain-fed and subsistence agriculture, as well as rapid population growth, means real growth per capita is just 3.1%, suggesting the economy is not growing at a pace that is fast enough to achieve rapid socio-economic transformation.
The growth outlook for the economy remains positive at 6%, driven by an anticipated increase in investments, especially to support developments in the oil sector. To sustain this growth, the report notes that it will require more effective government spending, enhancing domestic revenue mobilization, investing in critical sectors that have the potential to drive growth, increase productivity, and provide jobs. Agriculture is one of these critical sectors.
The agriculture sector provides more than half of all exports and about one-quarter of gross domestic product (GDP). It also employs 70% of Uganda’s predominantly young population. However, the report points out that agricultural output has grown at about 2% annually over the last five years, which is well below the population growth rate and below the 3-5% growth rate in other East African countries.
“Agriculture is vital to Uganda’s economy, but its potential remains largely untapped. Increasing investment and spending in agriculture and the wider food system over the next year could stimulate sector growth. This could potentially encourage not only the private sector, but also Uganda’s youth who desperately need jobs,” said Tony Thompson, World Bank Country Manager for Uganda.
To boost the transformation of Uganda’s agri-food system towards higher-value addition and job creation, the report recommends strengthening policy implementation and regulation, improving institutional coordination, and encouraging private sector participation. Achieving agriculture productivity growth also requires enhancing the resilience of agricultural systems and rural livelihoods to agriculture-related risks. This will require better technology, tenure security and sound land management practices, as well as the dissemination of knowledge on sustainable input use through effective extension services.
“Reaping the full benefit of observed sector trends requires strengthening institutional processes and stakeholder coordination, as well as steering public agriculture investments towards the provision of public goods such as research, extension services and infrastructure,” said Friederike Mikulcak, Agriculture Specialist at the World Bank and lead author of the report’s agriculture chapter.
Private markets forecast to grow to $4.9tn globally by 2025 and make up 10% of global AuM
Assets under management (AuM) in private markets to expand by between $4.2 trillion and $5.5 trillion in the years up to 2025 in worst/best case scenarios for economic recovery, according to new analysis from PwC.
The report, Prime time for private markets: The new value creation playbook, examines prospects for four primarily illiquid asset classes of private equity (including venture capital), infrastructure, real estate and private credit across a range of scenarios for 2019-2025.
The report projects significant growth for the value of private markets of $5.5tn (best case), $4.9tn (base case) and $4.2tn (worst case) depending on how global economic conditions respond to the disruption caused by Covid-19.
Will Jackson-Moore, global leader for private equity, real assets and sovereign funds at PwC says,‘The report highlights the continued emergence of private markets as a fast growing and highly impactful portion of global capital markets. Investors continue to look to the sector to deliver the yields that lower risk and more liquid asset classes struggle to match.
‘Yet this is also an opportunity for private markets to take a lead on ESG and net zero commitments and demonstrate the impact they can make in public perception beyond public markets.’
Opportunities across asset classes
Even in the worst case scenario of a prolonged recession, the projections look ahead to growth of almost 50% up to 2025.
While private equity is very much “the asset class of the moment” there is evidence that there are significant opportunities for growth and returns in areas such as real estate, infrastructure and private credit.
Will Jackson-Moore says,‘While opportunities for growth are out there, it is important to emphasise that returns will be harder to find and be more aggressively fought for. Managers will need to be innovative in their approach to value creation and respond swiftly to changing investors and governmental expectations as economies recover from the effects of the crisis.’
ESG and going beyond financial return
Will Jackson-Moore says,‘Our research highlights the extent to which financial return is no longer the sole driver of private markets growth. ESG and Net Zero commitments now represent a significant source of value preservation and creation.
‘Private market managers need to respond by looking at how to apply an ESG lens to investment strategy and product development. Whether it is in impact turnaround initiatives in which ‘dirty’ production facilities are turned green, or building strong commitment to diversity and inclusion at your organisation, these matters are no longer an overlay.’
Key Reforms Needed to Grow Albania’s E-commerce Sector
A new World Bank Albania E-Commerce Diagnostic highlights key reforms needed to better leverage digital trade as opportunity for economic development.
E-commerce can be an important asset for Albania. Online sales channels allow businesses to reach more customers, at home and abroad. Customers gain from greater convenience and more choice. Sectors enabling e-commerce can create new jobs, including in technology companies, logistics and online payments.
During the COVID-19 pandemic, online markets are playing a particularly important role by allowing economic life to continue despite social distancing. The 2020 World Bank Enterprise Survey reveals that almost 20 percent of Albanian firms surveyed reported having either started or increased online business activity during the crisis.
To help Albania seize the digital trade opportunity, this new diagnostic identifies a roadmap of critical reforms in logistics and customs; digital connectivity; online payments; private sector capabilities and skills; and the e-commerce regulatory framework.
Digitalizing the Maritime Sector Set To Boost the Competitiveness of Global Trade
A new report launched today by the World Bank and the International Association of Ports and Harbors (IAPH) shows that better digital collaboration between private and public entities across the maritime supply chain will result in significant efficiency gains, safer and more resilient supply chains, and lower emissions.
Maritime transport carries over 90% of global merchandise trade, totaling some 11 billion tons of cargo per year. Digitalizing the sector would bring wide-ranging economic benefits and contribute to a stronger, more sustainable recovery.
Accelerating Digitalization: Critical Actions to Strengthen the Resilience of the Maritime Supply Chain describes how collaborative use of digital technology can help streamline all aspects of maritime transport, from cross-border processes and documentation to communications between ship and shore, with a special focus on ports.
The COVID-19 crisis has evidenced a key benefit of digitizing waterborne and landside operations: meeting the urgent needs to minimize human interaction and enhance the resilience of supply chains against future crises.
“In many of our client countries, inefficiencies in the maritime sector result in delays and higher logistics costs, with an adverse impact on the entire economy. Digitization gives us a unique chance to address this issue,” noted Makhtar Diop, World Bank Vice President for Infrastructure. “Beyond immediate benefits to the maritime sector, digitalization will help countries participate more fully in the global economy, and will lead to better development outcomes.”
IAPH Managing Director of Policy and Strategy, Dr Patrick Verhoeven, added: “the report’s short and medium term measures to accelerate digitalization have the proven potential to improve supply chain resilience and efficiency whilst addressing potential risks related to cybersecurity. However, necessary policy reform is also vital. Digitalization is not just a matter of technology but, more importantly, of change management, data collaboration, and political commitment.”
Although the International Maritime Organization (IMO) has made it mandatory for all its member countries to exchange key data electronically (the FAL convention), a recent IAPH survey reveals that only a third of over 100 responding ports comply with that requirement. The main barriers to digitalize cited by the ports were the legal framework in their countries or regions and persuading the multiple private-public stakeholders to collaborate, not the technology.
The report analyzes numerous technologies applied already by some from the world’s leading port and maritime communities, including big data, the internet of things (IoT), fifth-generation technology (5G), blockchain solutions, wearable devices, unmanned aircraft systems, and other smart technology-based methods to improve performance and economic competitiveness.
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