Topic: Business, Economic Growth and

Environment in Uganda: Where

is the Intersection?
1.0 Introduction

Uganda like any other country is chasing sustainable development goals

(SDGs) which is the basis of all the efforts in transforming the economy in
the future. The total budget for FY 2024-25 is a staggering UGX 72.1
trillion, marking a significant increase of UGX 14.1 trillion from the initial
proposal of UGX 58 trillion. The budget’s theme was, “Full Monetization
of Uganda’s Economy through Commercial Agriculture,
Industrialization, Expanding and Broadening Services, Digital
Transformation and Market Access”.1

By the above theme, it is clear that key components of the theme are all
nature dependent on implementation; commercial agriculture has to
increase pressure on land, vegetation and other ecosystems,
industrialization means increasing pressure on land resources, water,
increase of pollution and waste.

The total population of Uganda as per the recent census stands at 49.5
million2 people and is set to grow even higher which increases pressure on
natural resources, an environment concern. The factors that drive the
economy of Uganda are mainly agriculture, industrialization, tourism and
mineral exploration, and services which are largely dependent on natural
resources to thrive.

While Uganda boasts rich biodiversity, the pressures of population growth

and economic development have led to encroachment into protected areas,
illegal poaching, and degradation of ecosystems that are critical for wildlife

1
Budget speech by the Hon minister of finance, Matia Kasaija, June 13th 2024
2
National population and housing census report, 2024
conservation and eco-tourism. while Uganda’s economic growth is
impressive, it faces significant environmental challenges, such as
deforestation, land degradation, and the impact of climate change.

Business activities and economic growth intersect with environmental

conservation in Uganda. It’s important to interrogate how businesses
contribute to or hinder environmental sustainability while driving economic
growth, and then discussing what legal, policy, and practical measures exist
to navigate these challenges since development, business and
environmental conservation are all important to our growth as a country. To
achieve this, there must be deliberate efforts to put up policies, laws,
regulations and political good will.

2.0 Uganda’s Economic Growth and Key Sectors

2.1 Agriculture

Agriculture remains Uganda's backbone, employing over 70% of the

population and contributing about 25% to GDP. But it is also a major driver
of deforestation and soil degradation. Agriculture is the predominant
economic activity in rural areas which harbor about 76 percent of
Uganda’s population. The sector employs about 70 percent of the working
population and provides the first job for three-quarters of those aged
between 15 and 24 years. The NDP III 3 identifies agriculture as one of the
key growth opportunities with the highest potential to generate
employment and have positive multiplier effects on other sectors. It has
played a central role in Uganda’s economy accounting for 26.42 per
cent of the country’s exports at a growth rate of 3.8 percent and forming
1.65 percent of the GDP 4.

3
National development plan III, 2020-2025
4
Development policy and performance portal, ministry of finance, planning and economic development
https://development.finance.go.ug/agriculture-0
The overall development strategy of the plan is hinged on the need for
rapid industrialization based on increased productivity and production in
agriculture. With the largest proportion of households (68.9 percent) still
engaged in subsistence economy, improving the incomes of this segment
of the population is central in the NDP III 5 through increasing their land
productivity and value addition to their products.

During the five years of the plan, agriculture’s contribution to growth is

projected to reach 1.78 in FY2024/25. At the end of the five-year period,
the key results are expected to be achieved are; increasing the rate of
growth of the agricultural sector from 3.8 percent to 5.1 percent; and
reducing the percentage of households dependent on subsistence
agriculture as a main source of livelihood from 68.9 percent to 55
percent.

The Agro-industrialization programme is an “area-based planning

approach” based on a number of strategic commodities that are grown in
different defined agro-ecological zones of the country to create backward
and forward linkages in agro-processing. Agro-processing is the backbone
of the manufacturing sector accounting for approximately 60 percent of
its total output. 6

Agro-industrialization as a programme aims to increase

commercialization and competitiveness of agricultural production and
agro processing. Key results include; increasing export value of selected
agricultural commodities, increasing the agricultural sector growth rate,
increasing labour productivity in the agro-industrial value chain, creating
jobs in agro-industry, and increasing the proportion of households that
are food secure. 7

5
Ibid note 3
6
Ibid note 3
7
Ibid note 3
This means that, commercialized agriculture will increase pressure on
land, it will mean increased deforestation, emission of gasses, air
pollution, bush clearing, destruction of ecosystems, habitats, flora and
fauna. It then calls for strategies of achieving these goals in the
agriculture sector without severely endangering the environment.

2.2 Energy and Extractive Industries

One of the economic development drivers in Uganda lately is the energy

and extractives industry. Uganda is endowed with several natural
resources which are commercially viable. The contribution of mineral
development in the country is critical in expanding product development
and import replacement. The minerals sub sector’s contribution to GDP
steadily improved from 1.1 percent in FY 2015/16 to 1.4 percent in FY
2018/19. Over the NDP II period, Government has prioritized investment
in the discovery, exploitation and development of the natural resources
for the betterment of the people and improving the country’s
competitiveness. 8

The discovery of Oil in 2006 coupled with the existence of significant

minerals deposits in the country position Uganda’s positive development
trajectory. Uganda has an estimated oil potential of about 6.5 billion
barrels, of which 1.4 billion barrels is recoverable. The NDP II further
prioritized enhancement of several minerals with the potential to drive
growth and employment. The identified minerals include; Gold, Iron Ore,
limestone, copper, phosphates, uranium and dimension stones among
others.9

In oil and gas sub sector, the following investments have been fast
tracked and are different implementation stages. These include;
establishment of the oil refinery; construction of the crude oil pipeline

8
Ministry of energy and mineral development portal
9
Ibid note 8
from Hoima to Tanga in Tanzania; construction of the Kabaale
International Airport to facilitate the transportation of equipment and
machinery for the development of the oil refinery; construction of 12 oil
roads totaling 700km for transportation of heavy oil related equipment
and machinery.

In minerals development, the key programmes and achievements include;

commissioning the Sukulu Phosphate and Steel project, mapping,
registration and organization of artisanal and small scale miners,
construction of mineral beneficiation centers and mineral laboratories for
value addition and to strengthen institutional research capacity in
geosciences, discovery of mineral occurrences such as iron ore, copper,
nickel, cobalt, rare earth, graphite among others. In addition, airborne
survey of Karamoja region commenced. 10

All these investments will play a central role in developing a sound

minerals sector with the potential to transform the country from peasant
low income country to a middle income country as envisaged in the
middle income target outlined in the NDP II. Resulting from the above
investments, the value of mineral exports increased from 1.55 trillion
shillings in 2017 to 1.89 trillion in 2018. 11

It is no secret therefore that, this industry develops by disorganizing

nature and its development has significant environmental related
consequences which need to be addressed if we are to achieve
development with sustainability. It calls for finding a way of striking a
balance between the two much needed aspects through policy and legal
related efforts.

2.3 Tourism

10
Ibid note 8
11
Ibid note 3
Uganda’s diverse wildlife and national parks contribute significantly to
GDP. The tourism sector relies heavily on environmental conservation to
attract eco-tourists. Tourism is recognized under Vision 2040 and the NDP
II as a key Primary Growth Sector with great potential to boost and
accelerate Uganda’s transformation agenda.12

Currently, Tourism is the leading foreign exchange earner for Uganda

generating US$1.453bn and contributing UGX 6.8 trillion of Uganda's GDP
(7.3% of GDP) in 2017 followed by remittances from Ugandans working
abroad of about $1.2b (about sh4.5trillion) in 2017. The sector was
responsible for 6.3% of total employment (605,500 jobs), while tourist
arrivals grew from 539,000 in 2006 to 1.4 million in 2017. In addition,
Tourism promotes trade and investment and significantly contributes to the
development of other sectors of the economy, such as construction,
manufacturing, retail and financial services.13

The growth of this industry means development of more and new

infrastructure like roads, telecommunications, hotels, increase in number of
vehicles and others which need natural resources to be put up. How it can
all be done without disregarding the law and in an environmentally friendly
style should be the priority for all policy makers and implementers.

3.0 Growth versus Environmental Degradation

While these sectors contribute to growth, they also often conflict with
environmental sustainability.

Uganda needs to fundamentally shift how land and other natural resources
are managed and utilized to meet growing demands on food security,
economic growth and poverty reduction under a changing climate. Whereas
natural resources are a major pillar for Ugandan economy and people’s
12
Ministry of tourism, wildlife and antiquities, economic growth forum on budget, FY 2019/20
13
Ibid note 7
livelihoods, their contribution to the economy and poverty reduction is
being threatened by mismanagement and climate change.

According to world bank, more than 80 percent of Ugandan households

depend on renewable natural resources such as agricultural land, fertile
soil, forests, and freshwater resources, for their livelihoods. Natural
resource based economic sectors generate over one-quarter of GDP. The
ability of Uganda’s natural capital dependent productive sectors such as
agriculture to continue playing key roles in the economy and people’s
livelihoods effectively dependent on the availability, use and sustainability
of natural resources.14

Unfortunately, these resources have not been well managed leading to

rapid depletion, which is intensifying economic vulnerabilities for a natural
resource dependent economy and population. The impacts of poor natural
resources management on productive sectors, the economy and poverty is
already evident. Soil nutrient depletion, soil erosion, deforestation, and
other manifestations of natural resource degradation have increased
significantly over the past decade.

About 41 percent of the country’s land is now degraded. About 39 percent

of the country has an unsustainable rate of mean soil loss, which in the
hotspot mountainous regions average rates over 30t/ha/year. By 2019, the
overall cost of soil erosion and land degradation was estimated at about 17
percent of GDP. Productivity losses per year for maize from soil erosion
have been estimated in some places as high as 190 kg/ha, threatening food
security and incomes of the poor and most vulnerable. Forest cover was
declining by 2.6 percent every year—one of the highest rates of forest loss
globally, and with forests on private land almost completely depleted.
Between 1990 and 2015, forest cover loss amounted to $1.2 billion worth of

14
From crisis to green resilient growth: investing in sustainable land management and climate smart agriculture
17th Edition, june 2021
economic loss. These effects are exacerbated by climate risks, whose
economic cost through sectors.15

This shows that, whereas we need economic growth, we can’t achieve much
without managi8ng and conserving natural resources since our economy is
majorly natural resource dependent. There is need therefore to innovate
and resort to better environmental friendly methods of investment as a
deliberate long-term solution to prevent the environment from getting
degraded given the harsh consequences of climate change the world is
battling with.

3.1 Environmental Conservation in Uganda and consequences

related to development.

Deforestation: Uganda’s forests have been rapidly shrinking due to

agriculture, logging, and fuelwood collection. The country loses about
90,000 hectares of forest annually, which significantly impacts biodiversity,
climate regulation, and soil health. From 2002 – 2023, Uganda lost 77.1kha
of humid primary forests making up to 7.2% of its total tree cover loss in the
same time period. The total area of humid primary forest cover in Uganda
decreased by 15% in the same period.

From 2001 to 2023, Uganda lost 1.10 Mha of tree cover, equivalent to a
14% decrease in tree cover since 2000 and 500 Mt of CO2e emissions.16

Deforestation is majorly caused by increase in mechanized agriculture,

industrialization, growth in population and development of other
infrastructure as highlighted. This therefore calls for a strategy to strike a
balance between development and sustainable use of our resources.

15
Ibid note 8
16
Global forest report, https://www.globalforestwatch.org/dashboards/country/UGA/?category=forest-change
Land Degradation: Over-farming and unsustainable agricultural practices
have led to soil erosion, reduced agricultural productivity, and increased
vulnerability to climate change impacts like floods, droughts and air
pollution due to excessive sunshine.

Pollution and waste Management: Uganda faces challenges with waste

management, especially in urban areas like Kampala, where industrial and
household waste contributes to pollution. Water pollution due to oil
exploration is also a concern in areas near Lake Albert. Other water natural
resources like river Nile and Lake Victoria have faced similar challenges of
waste discharge into them thereby affecting the quality of the waters and
the lives of aquatic creatures.

Biodiversity Protection: While Uganda boasts rich biodiversity, the

pressures of population growth and economic development have led to
encroachment into protected areas, illegal poaching, and degradation of
ecosystems that are critical for wildlife conservation and eco-tourism. This
is partly brought up by urbanization near protected areas.

3.2 The co-existence of Business, Economic Growth, and

Environmental Conservation

Whereas it is seen as if the presence of one will kill the other, the three can
ably co-exist if there is good will by stakeholders, innovation, proper
planning, change of mindset and adherence to the law. This co-existence
can be achieved by among others;

Sustainable Business Practices and Economic Growth. These include,

carrying out businesses after environmental studies, regulated use of
resources to avoid depletion, sustainable water use, limitations to use of
chemicals, proper waste water treatment, carrying out periodical
environmental audits environment, use of innovations and technology, and
others.

Agro-ecology and Sustainable Agriculture: Sustainable farming

practices like agroforestry, organic farming, and conservation tillage can
help businesses in agriculture protect the environment while improving
productivity. By reducing deforestation and improving soil health,
businesses can continue to generate income without depleting the land.
This has been seen in businesses like green bio energy and Bugisu growers
focusing on sustainable agricultural practices, providing a befitting
illustration on how environmentally conscious businesses can also drive
economic growth.

Renewable Energy projects in Economic Development: Uganda has

great potential for renewable energy, especially through hydroelectric
power, solar, and biomass. Businesses investing in these sectors not only
help reduce reliance on fossil fuels but also contribute to long-term energy
security and economic growth. For instance, the development of solar
energy businesses like Solar Now or hydroelectric projects such as Karuma
Dam are examples where business ventures promote both energy access
and environmental conservation by utilizing renewable resources.

Eco-Tourism as a Sustainable Business Model: Uganda’s tourism sector

is increasingly focused on eco-tourism and wildlife conservation. The
country's national parks and protected areas provide opportunities for
sustainable tourism that can generate significant income while promoting
conservation efforts.

3.3.0 The Impact of Legal and Regulatory Frameworks in ensuring

this intersection
In order to achieve the much required balance, there should be policies and
laws in place to act as safeguards should one aspect get off the rails. In
Uganda, many policies and laws have been put up to facilitate and maintain
this balance. They include;

3.3.1 The constitution of the Republic of Uganda 1995 as amended.

The Constitution of Uganda has provisions which are meant to ensure both
development, environmental protection and sustainable use of natural
resources.17 The same constitution gives government a duty to protect
specified natural resources in trust of the people just to avoid depletion and
abusive use. The constitution as well gives any Ugandan a right to live in a
healthy and clean environment18 and to sue anyone who attempts to take
away the same right. This indicates that the constitution does not allow
development and economic growth at the expense of environmental
protection.

3.3.2.0 The National Environmental Laws: Uganda has several laws

aimed at balancing economic growth with environmental protection in all
sectors of the environment. These laws are aimed at facilitating the
sustainable use of natural resources and they include;

3.3.2.1 The National Environment Act19 and its regulations which

mandates Environmental Impact Assessments (EIAs)20 for large-scale
projects, conduct of project briefs, conducting of annual environmental
compliance audits, orders restoration of degraded environment, regulates
pollution of all kinds, waste management,21 licensing projects and
businesses and many other duties aimed at ensuring businesses comply to
environment standards.

17
Article 245
18
Article 39
19
Cap 181
20
Part X of cap 181
21
Sections 99-102 of cap 181
All these provisions are not aimed at preventing business but to ensure
businesses are not after studies have been conducted on the likely impacts
they can cause to the existing environment. Strict compliance with these
environmental standard boosts the legitimacy of businesses and assist
businesses to enjoy incentives that come with this legitimacy status.

Schedule 5 to the Act22 specifies a line of projects for which environmental

and social impact assessment are mandatory. Such projects need to comply
with the said regulatory requirements for their businesses to take off while
the much needed environment is protected after all it is the state of the
environment that sustains businesses in Uganda.

3.3.2.2 The Land Act23 under which it is provided that, the

Government or a local government shall hold in trust for the people and
protect natural lakes, rivers, ground water, natural ponds, natural streams,
wetlands, forest reserves, national parks and any other land reserved for
ecological and touristic purposes for the common good of the citizens of
Uganda. And that, local government may, upon request to the Government,
be allowed to hold in trust for the people and the common good of the
citizens of Uganda any of the resources referred to mentioned. It also talks
of any other resource that is not covered under that section, which is
identified after the coming into force of this Act may, upon request to the
Government and with the approval of Parliament, be held in trust for the
people and for the common good of the citizens of Uganda by a local
government. It equally prohibits the leasing or alienating of any natural
resources.24 This implies that, whereas development and business are much
needed for economic growth, natural resource use must be delicately
handled.

22
Ibid note 19
23
Cap 236
24
Section 44 of cap 236
3.3.2.3 National Forestry and Tree Planting Act25, which regulate
land use and forestry conservation and hence protecting the forests from
the wrath of developments that seek to take them. It prohibits acts of
deforestation, and other forms of degradation. It criminalizes most of the
degradation activities.26

3.3.2.4 The Uganda wild life Act27, that seals with protection of wild
life both flora and fauna especially in the protected areas.

3.4 Challenges and Gaps at the intersection and way forward.

Having established the linkage between business, economic development

and the environment, this link has not paid off as expected. Many times,
there is a gap between them and they look to be enemies other than
collaborators yet all are necessary for growth. The challenges at the
intersection include;

 Weakness in the enforcement of Environmental Laws: While

Uganda has strong environmental laws, enforcement remains weak.
The enforcement manpower at NEMA is so thin to monitor every kind
of degradation or business activities that affect the environment and
as a result, many businesses are established without the know of
NEMA. The government should think about recruiting as many
enforcement personnel as possible and deploy them all over the
country to closely do monitoring, inspection and enforcement.
 Corruption, impunity and abuse of authority; Uganda has been
severally ranked high as one of the most corrupt countries in many
sectors. Environmental monitoring and enforcement is not spared in
this corruption rot. Many times, officials from NEMA issue certificates
25
Cap 160
26
Sections 14,32 of cap 160
27
Cap. 315
 of approval to projects and businesses without an environmental study
after being bribed, many degraders escape justice through corruption
both at NEMA, DPP or even at the courts. There needs to be
established an independent anti-corruption body dealing with matters
of the environment to investigate and monitor environment related
complaints and services standards.
 Lack of resources for monitoring, and the influence of businesses
over policy can result in unsustainable practices. The government
must allocate enough resources to the environment monitoring
agencies booth at the national and local levels, to effectively to their
work.

 Limited Awareness and Capacity: Many businesses, particularly

small and medium-sized enterprises (SMEs), may lack awareness or
capacity to adopt green technologies and practices. There’s a need for
more education, training, and support to help businesses transition to
sustainable models. Environment compliance awareness campaigns
must be prioritized by the government through its agencies to the
business communities.
 Business Incentives for Sustainability: Government incentives for
businesses adopting sustainable practices—such as tax breaks or
grants for renewable energy projects help to create a positive
relationship between economic growth and environmental
sustainability. The Ugandan government must put up efforts to
integrate green business practices into public policy and regulatory
frameworks, like incentives for clean energy production, can promote
a healthier intersection of business and environmental conservation.

 Short-Term Profit vs. Long-Term Sustainability: There is often a

conflict between short-term profit maximization and long-term
environmental sustainability. Many businesses, especially in sectors
 like agriculture or mining, prioritize immediate financial returns over
environmental concerns, which undermines long-term conservation
goals.
 Cost of environment standards compliance: many times, business
owners have complained of the cost of compliance. Annual
environment audits, EIAs and other regulatory requirements are
costly and time consuming especially the analogue way of the
processes at NEMA. However, of late, NEMA launched a digital
system called Environment License Management Information System
(ELMIS) which was launched on November 3 rd 2023 to speed up these
processes which I hope has improved compliance statistics.
 Lack of inter-agency coordination; there is disconnect between
government agencies which deal with businesses and similar projects.
For example, the land ministry which issues land titles in wetlands
and forest reserves, KCCA which approves building plans in wetlands,
the Uganda registration service bureau that registers businesses who
never comply with the environmental standards, utility companies
that compensate people in wetlands for service extension
infrastructure, Uganda investment authority, MDAs, etc.
Environmental compliance should be prioritized by all government
regulatory agencies to align businesses in the right environmental
compliance shape.

 Green Finance and Investment: Encourage the growth of green

finance, financing mechanisms that fund businesses with
environmentally sustainable models. This includes both foreign
investments (e.g., from the Green Climate Fund) and local
investment in green technologies.
 Business Incentives like tax waivers, tax holidays need to be given to
compliant businesses and also promotion of environmentally friendly
imports and manufacture.
  Public-Private Partnerships (PPPs): These can be instrumental in
integrating business growth with environmental goals. By aligning
business interests with conservation objectives, Uganda can promote
large-scale projects for example renewable energy, agroforestry, aqua
culture, and others that benefit both the economy and the
environment.
 Corporate Social Responsibility (CSR): More businesses can
integrate environmental sustainability into their CSR initiatives,
helping conserve natural resources while contributing to economic
growth.
 Promoting manufacture of substitutes; Many products on the
Uganda market are bad to the environment for example, polythene
bags, plastic bottles and others. Promotion of companies that
manufacture substitute environmentally friendly products with
affordable credit financing assists the environment as well as kicking
out businesses which deal in environmental contrabands.

4.0 Conclusion

There is no doubt that business, economic development and the

environment are linked and inseparable. Businesses need to be approves by
environmental protection bodies lest they may not operate. Most business
thrive on the natural resources which they are duty bound to jealously keep.
A farmer needs rainfall or water to irrigate, rainfall need trees and lakes,
trees need workers, workers need food, etc. nature degradation kills
business and business can also kill nature. It is about time we woke up as a
country and prioritize businesses that are environmental friendly through
innovation, technology and sensitization. As the country gears towards
achieving the SDGs, and in order to effectively fight the two global
challenges of poverty and climate change, it is imperative that businesses
adopt sustainable practices that do not come at the expense of the
environment. As highlighted above, government has the biggest
responsibility in facilitating this transition.

Uganda’s economic growth need not come at the cost of its natural
resources. With stronger legal frameworks, better enforcement, and a more
concerted effort by both businesses and government, Uganda can achieve a
model of sustainable growth that benefits both the economy and the
environment.

STATUTES

 The Constitution of the Republic of Uganda 1995 As Amended

 The Land Act Cap 236
 The National Environment (Environment and Social Impact
Assessment) Regulations, 2020
 The National Environment Act Cap 181
 The National Forestry and Tree Planting Act Cap 160
 The Uganda Wild Life Act Cap 315

REFERENCES

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sustainable land management and climate smart agriculture 17th
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