Uganda’s government will rely on economic research to guide industrial policy, improve public spending and accelerate economic transformation under the Tenfold Growth Strategy, Finance Minister Henry Musasizi has said.
Musasizi made the announcement during a public policy dialogue at the Uganda Management Institute (UMI), where findings from a doctoral study by Permanent Secretary and Secretary to the Treasury Ramathan Ggoobi on the determinants of industrial sector growth in Uganda were discussed.
The minister said evidence-based policymaking would help the government prioritise investments that generate the greatest gains in industrial productivity, job creation and exports amid limited public resources.
He noted that industrial development requires strategic investments in industrial parks, economic infrastructure, industrial land, subsidised electricity tariffs and targeted fiscal incentives.
Ggoobi’s research identifies corruption control, market expansion, access to credit and borrowing costs as key factors influencing industrial performance.
According to the study, a 1 per cent improvement in corruption control is associated with a 9.99 per cent increase in industrial output. Conversely, a 1 per cent increase in commercial lending rates is associated with a 3.11 per cent decline in output.
The research also estimates a positive relationship between population growth and industrial expansion, with an estimated effect of 8.48 per cent, reflecting the potential benefits of a larger domestic market and an expanding labour force.
The findings further highlight the importance of controlling inflation, stabilising the exchange rate and reducing the cost of capital to support industrial growth.
The study recommends expanding affordable industrial credit, strengthening domestic value chains, aligning technical training with industry needs and improving regulatory efficiency through digitisation.
It also advocates carefully designed trade and foreign investment policies to strengthen domestic producers and improve Uganda’s export competitiveness.
Musasizi said the government was supporting local investment and affordable financing through initiatives such as the Parish Development Model and the capitalisation of Uganda Development Bank.
Additional measures include lower electricity tariffs for industrialists and targeted tax incentives to encourage investment in manufacturing.
He said Ggoobi’s findings would inform ministry decisions and the implementation of the Tenfold Growth Strategy, enabling the government to assess the costs and benefits of its interventions.
Musasizi also congratulated Ggoobi on receiving his Doctor of Philosophy degree in Economics from Nelson Mandela University in South Africa, praising his research and contribution to Uganda’s economic policy debate.