Public spending composition and public sector efficiency: Implications for growth and poverty reduction in Uganda

The paper examines the interrelationships between public spending composition and Uganda's development goals including economic growth and poverty reduction. We utilize a dynamic CGE model to study these interrelationships. This paper demonstrates that public spending composition does indeed influence economic growth and poverty reduction. In particular, this study shows that improved public sector efficiency coupled with re-allocation of public expenditure away from the unproductive sectors such as public administration and security to the productive sectors including agriculture, energy, water and health leads to higher GDP growth rates and accelerates poverty reduction. Moreover, the rate of poverty is faster in rural households relative to the urban households. A major contribution of this paper is that investments in agriculture particularly with a view of promoting value addition and investing in complementary infrastructure including roads and affordable energy contributes to higher economic growth rates and also accelerates the rate of poverty reduction.Sennoga, Matovu, EPRC, Public expenditure, Economic growth - Uganda, Poverty reduction, Computable General Equilibrium, Agribusiness, Agricultural and Food Policy, Community/Rural/Urban Development, Consumer/Household Economics, Crop Production/Industries, Demand and Price Analysis, Financial Economics, Institutional and Behavioral Economics, Production Economics, Public Economics, Resource /Energy Economics and Policy, C68, D58, E62, F15, H62, 132,

Increasing world food prices: blessing or curse?

This study evaluates the potential impact of the recent world food prices on the Ugandan economy and possible policy options to respond to it. Uganda is largely a net exporter of some cereals whose prices increasing considerably especially maize. Using a recursive dynamic CGE model, we attempt to answer questions on who are the beneficiaries and losers after the surge in food prices. The rural producers of maize tend to benefit considerably with their poverty levels reducing. On the other hand, the urban purchasers of cereals are affected owing to the higher prices of food. this therefore suggests that the Ugandan government should take advantage of the increasing food prices by stimulating and undertaking policies that would enhance productivity especially for crops where on the urban population, the government could design targeted programs for the urban poor.Urban poor, Food prices, CGE model, Food security, Matovu, Twimukye, Economic Policy Research centre, Agribusiness, Agricultural and Food Policy, Agricultural Finance, Community/Rural/Urban Development, Consumer/Household Economics, Crop Production/Industries, Farm Management, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Livestock Production/Industries, Production Economics,

Macroeconomic and welfare consequences of high energy prices

The current wave of volatile international oil process coupled with the low hydro-energy generation continues to exert negative impacts on the Ugandan economy. This paper analyzes the extent to which changes in energy prices affect the economy and examines policy options that can be undertaken to circumvent the negative effects. The impact of higher oil prices takes a large toll on all sectors including agriculture, manufacturing and services. With the existing loses in productivity of generating hydro electricity, this has exacerbated the energy crisis. The combined output loss for the manufacturing sector due to increase in fuel prices and a shortage of electricity is estimated at 2 percent on annual basis. While the government has title control on the international prices of oil, further private and public investments in the energy sector are called for to alleviate the shortages of energy.Oil, Energy, Hydro-electricity, Public investment, Twimukye, Matovu, EPRC, Industrial Organization, Institutional and Behavioral Economics, International Development, International Relations/Trade, Political Economy, Production Economics, Productivity Analysis, Public Economics, Resource /Energy Economics and Policy, Risk and Uncertainty,

Tax evasion and widening the tax base in Uganda

Uganda still lags behind in its tax collections at the domestic level. For most of the commodities the tax collection effort is not more than 5 percent relative to the statutory rate of 18 percent. This results into a situation where the government has to rely a lot on foreign financing. From the analysis, there is a lot of improvement where URA can be able to increase its tax effort. this could be achieved by targeting commodities that are under-taxed and excluding food items for equity purposes. Increasing domestic collection would also result into less over reliance on taxing a few commodities especially fuel which is interlinked with a lot of other sectors and could indeed harm growth in the long-run. We also find that the tax effort on imports is sufficient. However, import duties on fuel remain very high and this could be a symptom of the poor domestic tax collection.Taxation, Tax base, Domestic taxes, import duty, Sennoga, Twimukye, Matovu, EPRC, Agribusiness, Agricultural and Food Policy, Community/Rural/Urban Development, Consumer/Household Economics, Crop Production/Industries, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Public Economics,

Social cash transfers for the poorest in Uganda

This paper mainly focuses on the various ways through which a social cash transfer program can be designed and financed. We identify four types of households which are considered to be vulnerable to be targeted with cash transfers. This includes households with orphans, old individuals, young and labor constrained. Extending a cash transfer to these households would lead to less poverty over the simulation period. these programs which would be constrained to less than 0.5 percent of GDP would have a small impact on the overall economy. By increasing taxes to finance the program this would wipe out the potential benefits of the cash transfer program of reducing poverty.Poverty, Cash transfers, Vulnerable groups, Sennoga, Twimukye, Matovu, EPRC, Poor people, Agricultural and Food Policy, Community/Rural/Urban Development, Consumer/Household Economics, Crop Production/Industries, Financial Economics, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Health Economics and Policy, Institutional and Behavioral Economics,

Sectoral and welfare effects of the global economic crisis on Uganda: a recursive dynamic CGE analysis

This paper analyses the impact of the global economic and financial crisis on Uganda notably on macro-economic aggregates, sectoral output and household welfare, and the potential role of fiscal policy and reform in mitigating the impacts. We find that second round effects from a reduction in financial inflows such as remittances, foreign direct investments and overseas development assistance, as well as reduction in international demand from cash crops such as cotton, tea and coffee, could lead to a reduction in economic growth by 0.6 percentage points on average annually over the period 2008- 2010 compared to a baseline reflecting pre-crisis conditions. A surge in regional exports and early counter-cyclical policies in particular are found to dampen the most adverse impacts of the crisis. The paper also shows that the impact of the government’s expansionary 2009/2010 budget could return growth to pre-crisis levels and illustrates how a re-prioritization of government expenditure away from expenditure on administration to more productive sectors of the economy, combined with reforms to improve the efficiency of public spending, could lift long-term growth and reduce poverty, especially in rural areas, even more.Sub-Saharan Africa, Uganda, global economic and financial crisis, computable general equilibrium (CGE), Consumer/Household Economics, Financial Economics, Industrial Organization, International Development, Production Economics, Public Economics, C68, D58, E62, F15, H62, I32,

Managing future oil revenue in Uganda for agricultural development and poverty reduction: A CGE analysis of challenges and options

With the recent discovery of crude oil reserves along the Albertine Rift, Uganda is set to establish itself as an oil producer in the coming decade. Total oil reserves are believed to be two billion barrels, with recoverable reserves estimated at 0.8–1.2 billion barrels. At peak production, likely to be reached by 2017, oil output will range from 120,000 to 210,000 barrels per day, with a production period spanning up to 30 years. Depending on the exact production levels, the extraction period, the future oil price, and revenue sharing agreements with oil producers, the Ugandan government is set to earn revenue equal to 10–15 percent of GDP at peak production. The discovery of crude oil therefore has the potential to provide significant stimulus to the Ugandan economy and address its development objectives. However, this is subject to careful management of oil revenues to avoid the potential pitfall of a sudden influx of foreign exchange. Dominating the concerns is the potential appreciation in the real exchange rate and subsequent loss of competitiveness in the nonresource tradable goods sectors such as agriculture or manufacturing (Dutch Disease). These sectors are often major employers in developing countries and the engines of growth. Several mitigation measures can be employed by government to counter Dutch Disease, including measures that directly counter the real exchange rate appreciation or measures that offer direct support to traditional export sectors in the form of subsidies.crude oil, agricultural competitiveness, general equilibrium modeling,

The Effect of Climate Change on Agricultural Crop Returns in Uganda

The study examined the effect of climate change on agricultural crop returns in Uganda using the Ricardian Panel Tobit technique and the World Bank Living Standards Measurement Survey (LSMS) data, climate data from Uganda National Meteorological Authority (UNMA) and global weather data. The findings showed that climate related risks account for over 67 percent of agricultural risks and less than 2 percent of the farming households practise irrigation. Farmers that practised irrigation earned higher agricultural returns nationally than their counterparts did. The findings show that the output elasticities with respect to temperature range from -2.02 percent to 0.543 percent. This implies that for the average temperature increase by 1 percent, maize farm returns decreased by 2.02 percent, banana by 1.7 percent, cassava by 1.50 percent and beans by 1.01 percent. While 1 percent increases in rainfall, lowered banana returns by 0.02 percent, beans by 0.08 percent, cassava by 0.035 percent, maize by 0.025 percent except for groundnuts’ returns increased by 0.115 percent. Apart from climate factors, non-climate factors such as capital, labour, farm size, fertilizers and soil quality are equally important inputs and significantly impact on agricultural farm returns. The study proposes that due to unrelenting adverse climate change effects in Uganda, adoption of multi-pronged approaches such as extensive irrigation, agro-insurance, diversification of agricultural activities, use of food cribs during bumper harvests would be the breath of life for Ugandan farmers

Transcriptomes of newly-isolated Trypanosoma brucei rhodesiense reveal hundreds of mRNAs that are co-regulated with stumpy-form markers

Background: During natural Trypanosoma brucei infections, the parasites differentiate spontaneously into a non-dividing “stumpy” form when a certain level of parasitaemia is attained. This form is metabolically adapted for rapid further differentiation into procyclic forms upon uptake by Tsetse flies. Results: We describe here four central Ugandan isolates of Trypanosoma brucei rhodesiense that have undergone only three rodent passages since isolation from human patients. As expected, SNP analysis shows that these isolates are more closely related to each other than to the commonly used strains Lister 427, Antat1.1, and TREU927. TREU927 generally has smaller copy numbers of repeated genes than the other strains, while Lister 427 trypanosomes with a 30-year history of in vitro culture and cloning have more histone genes than the other isolates. The recently isolated trypanosomes were grown in rats, and their transcriptomes characterised. In comparison with cultured procyclic and bloodstream forms, there were increases in mRNAs encoding the stumpy-form markers ESAG9 and PIP39, with coordinated alterations in the levels of over 600 additional mRNAs. Numerous mRNAs encoding proteins of no known function were either increased or decreased. The products of the mRNAs that were increased in parallel with PIP39 included not only enzymes of procyclic-form metabolism, but also components of the translational and RNA control machineries. Many of the mRNAs that were decreased in cells with elevated PIP39 reflected reduced cell division. Conclusions: These transcriptomes suggest new avenues for research into the regulation of trypanosome differentiation

AcSDKP is down-regulated in anaemia induced by Trypanosoma brucei infection in mice

Background Anaemia commonly results from destruction of erythrocytes in the peripheral blood and failure of the bone marrow haematopoietic cells to replenish the erythrocytes. The mechanisms involved in trypanosoma-induced anaemia, including the role of the bone marrow haematopoietic cells are incompletely understood. We studied the responses of a tetrapeptide, AcSDKP, and IL-10, and their association with bone marrow nucleated cells in a Trypanosoma brucei brucei GVR35 experimental infection model.Methods Mouse infection was done intraperitoneally with 1 × 103 trypanosomes/mL. Mice were either infected or left uninfected (N = 100). At days 0, 9, 16, 23, 30, 37, and 44 post-infection, mice were euthanised and blood was collected by cardiac puncture to examine for parasitaemia and packed cell volume (PCV) and then centrifuged for plasma, which was used for cytokine ELISA. The mice’s femurs were also dissected and bone marrow was collected for femur cellularity.Results PCV dropped from 39.6% to 27% in infected animals by day 9 and remained low (relative to uninfected mice) for the duration of the experiment. AcSDKP levels decreased from day 0 (11.5 × 104 pg/mL) to day 16 (10 × 104), and increased by day 30 (12.6 × 104). There was a significant difference at day 16 (P = 0.023) between the infected and uninfected groups. By contrast, expression of IL-10 markedly increased between day 0 (18.6 pg/mL) and day 16 (145 pg/mL) and decreased by day 30 (42.8 pg/mL). There was also a significant difference in IL-10 expression between infected and uninfected mice at day 16 (P < 0.001). Bone marrow nucleated cells were significantly reduced during periods of low plasma AcSDKP and high plasma IL-10 concentrations (5.4 × 106 infected vs 6.2 × 106 on day 0 and 4.9 × 106 infected vs 10 × 106 uninfected on day 16).Conclusions These data unravel a possible negative feedback interaction between AcSDKP and IL-10 in trypanosome infection. More importantly, this study implicates an IL-10/AcSDKP cytokine network in the regulation of bone marrow nucleated cells and provides a new potential mechanism in the pathogenesis of trypanosoma-induced anaemia. Further mechanistic blocking experiments on AcSDKP and IL-10 are recommended to further clarify understanding of the interaction