Uganda Economic Update, February 2015

This Fifth Edition of the Uganda
Economic Update presents evidence that if the urbanization
process is well managed, it has the potential to stimulate
economic growth and to provide productive jobs for a greater
proportion of Uganda s young and rapidly expanding
population. In many countries across the world, the growth
of cities has stimulated the establishment and expansion of
productive businesses by reducing the distance between
suppliers and customers. The growth of cities has also
facilitated provision of social services and infrastructure
through economies of scale. These positive effects from
urbanization are already visible in Uganda since the poverty
rate is seven percentage points lower in urban areas than in
rural areas. Most of the recent job creation is found in
cities, and social indicators are also better in urban
areas, especially in education and health. This report
conveys the following key messages: (1) over the past 12
years, the number of people living in Uganda s urban areas
has been increasing by an average of 300,000 people per
year, (2) during the past few decades, similarly rapid rates
of urbanization have been recorded in many emerging
countries, (3) as is the case in many other developing
countries, the prospects of good jobs, higher incomes and
better living conditions in the cities continue to attract
Ugandans from rural areas, (4) currently, the opportunity
presents itself for Uganda to leverage urbanization to
benefit a large proportion of the population, and (5)
through the implementation of smart policies, Uganda can
ensure that its cities are both competitive and livable.