RESEARCH FOR TRANSFORMATION AND DEVELOPMENT

 PROJECTS

RTD is involved in several projects including the following:

1. How should Uganda Grow?  We first look to those products which balance the desire to increase the diversification and complexity of production, while not over-stretching existing capabilities. These include mostly agricultural inputs, such as agrochemicals and food processing. In addition, Uganda should concurrently develop more complex industries, such as construction materials, that are reasonably within reach of current capabilities and will be in great demand in the context of an oil boom. Here, the fact that Uganda is landlocked and faces high import costs will provide natural protection to the expanding demand in Uganda and neighbouring countries. We conclude with a discussion of the government policies that will support Uganda in developing new tradable industries.

2. Harnessing Uganda's Demographic Dividend: Evidence from National Transfer Accounts: Using the National Transfer Accounts (NTA) methodology we assess how Uganda will potentially be able to benefit from the demographic dividend given the current life-cycle behavior of individuals. The specific objectives are to: Assess the current dependency and support ratios of individuals by examining their consumption and incomes over their life-cycle; Assess the intra-household transfers as well as transfers between government and individuals and the extent to which these transfers could be used to accelerate achieving the demographic dividend; and assess the savings and assets accumulation process of individuals and whether the current savings behavior would support the expected growth in per capita income by 2040. Download draft.

3. Green Growth Options in East Africa: The objective of this synthesis is to provide a summary of the growth patterns and the extent to which it has been green and inclusive in the East African region. In particular it assesses the growth sensitivity to climate factors and deterioration, current poverty and inequality in the East African region, institutional settings in place and extent to which each country has gone to prepare green and inclusive strategies. The synthesis report also discusses in depth what needs to be done to achieve more inclusive and green growth. Particular emphasis is put on the following: (i) inclusive growth models, (ii) appropriate legal and regulatory environments, (iii) ‘inclusive’ fiscal/tax regimes to foster re-distribution; (iv) green infrastructure action plans, and (v) capacity development to foster the green growth agenda. Download draft.

4. Productivity, Growth and Welfare Effects of Climate Change--Analysis Using a Dynamic CGE model for Uganda:This study is aimed at providing empirical evidence of the effects of climate change on crop production at a micro and macro level in Uganda.  To make this analytical assessment, this study identifies three main areas of investigation which are all interrelated. The first part of this work focuses on estimating production functions augmented with rainfall and temperature as one of the determining factors. By identifying the impact of these two variables on productivity by crops, this we quantify the actual output lost as a result of climate change. The study also estimates yield functions and relate them to changes in rainfall and temperature. Secondly, by using the productivity effects estimated in the earlier sections, the paper uses these productivity changes in the dynamic CGE model to determine the short and long-term effects of climate change on the economy. Lastly, the CGE model is used to assess the extent to which the welfare of households is affected by climate change.

5. Road Map for Development Computable General Equilibrium Model for Sierra Leonne: The general objective of the assignment is to advise on improvements to the macro-economic forecasting model and to prepare a roadmap for transition to a Computable General Equilibrium (CGE) Model. Specific areas include the following: Design a road map for the development of CGE specifying the successive steps; Present a Supply User Table (of which the input-output table is a subset of the SUT) required for the CGE. Prepare methodology for development of the SAM and identify what is required. Drafting the questionnaire for an enterprise surveys, advice on the design of the survey (define sectors of activity, determine sampling technique) types of CGEs and their methodological underpinnings and what might be required and capacity development required at the various stages of the road map.

6. History of Planning in Uganda--Lessons Learned: The purpose of this case study is to take stock of the planning frameworks that have been used in Uganda for the last 50 years. The study identifies four major planning episodes of development in Uganda. Special emphasis is put on the PEAP and NDP planning frameworks. There was significant progress under The PEAP in terms of poverty eradication and improving access to social services especially health and education. The PEAP was abandoned largely because it was narrowly focused and replaced by the NDP. The first NDP has had some challenges in implementation especially due to its lack of alignment to the budget and expenditure management systems. There are also other challenges related to capacity constraints and procurement to implement the projects on time. The M&E system has also progressively evolved and increasingly being used by Government.

7. Leveraging Capital Markets for SME Financing in Rwanda: The basic objective of this study was to identify obstacles to SME use of capital markets for long-term financing and to identify policies for mitigating those challenges. Specifically, the study aimed at: Identifying the major barriers to access to long term capital for SMEs through the capital market and other forms of formal financing; Outlining phased policy action plan for addressing those barriers explicitly indicating the short-, medium-, and longer-term measures; and stimulating dialogue on reform opportunities for SMEs to access long-term capital financing. The study’s primary contribution includes identifying policy recommendations and other options for increasing SMEs’ access to long-term financing through the capital markets and other sources, drawing on lessons from successful approaches in other countries in Africa and globally.

8.  Domestic Resource Mobilization and Economic performance in Uganda: This project discusses possible approaches for improving the mobilization of domestic resources for development in Uganda focusing on the interrelationship between domestic saving, government revenue, capital accumulation and economic growth. In particular, it highlights the possibility of creating a virtuous cycle of higher domestic saving and investment rates and higher trend growth. Key policy areas for achieving this are related to the development of the domestic financial sector. Improving financial intermediation can be a key factor for raising the level of domestic savings and for their efficient channeling into growth-enhancing investment. However, financial deepening has to reach a certain level before the financial system can intermediate efficiently in channeling savings into productive investment. Hence, assigning high priority to financial reforms in the economy, especially in a country that has not made sufficient progress in this area, may have a mutually reinforcing effect on domestic savings, investment and growth. Another key policy reform area is the strengthening and widening of the revenue base which is still very small compared to other countries in the region. This would also entail enforcing new tax systems and widening the tax net to the largely untaxed informal sector.

9. Government Policies for Wage and Employment Growth: A CGE Analysis for Uganda: Despite this unprecedented growth rate, this has not been rapid enough to create jobs needed to keep pace with a high population growth rate estimated at 3.2 percent. According to the 2009/2010 Uganda National Household Survey, the level of unemployment is registered at 4.2 percent, an increase from 1.9 percent in 2005/06. The survey also shows that the pressure for creating jobs has intensified with the proportion of the youth (18-30 years) increased from 44 percent in 2005/06 to 48 percent in 2009/10. The level of youth unemployment has also considerably increased currently estimated at 32 percent. Likewise, the labour force has also increased from 9.5 million persons in 2005/06 to 11.5 millions in 2009/10 which poses challenges for the country to secure more jobs to match the increasing labour force. To fully capture the macroeconomic implications of government interventions, an economy-wide model is necessary to study the complex interactions produced under the various policy regimes. This paper uses a dynamic computable general equilibrium model. The advantage of using a CGE model is the fact that it combines the logic of partial equilibrium models to derive for labour demand with prices and wage rates. Within this framework, assumptions about the labour force participation rate can be combined with population forecasts to determine the supply of labour endogenously. The model can also accommodate a wide range of labour types for instance by skill types or occupational categories. 

10. A Quest for Strucural Transformation in Uganda: This paper attempts to answer whether Uganda will be able to achieve structural transformation by 2020. It also examines the current export strategy and whether this will be able to deliver the desired objective of turning Uganda into Middle Income Country status. Download draft.

11. Resource Requirements for Uganda to Meet MDGs: The overall objective of the project was to evaluate socially-inclusive macroeconomic policies aimed at facilitating the achievement of the MDGs through the adaptation of an integrated modelling framework to country-specific conditions. The methodological framework is based on the adaptation of the economy-wide model system, known as Maquette for MDGs Simulation (MAMS) – a dynamic computable general equilibrium (CGE) model that includes a special module for the “production” of services associated with the Millennium Development Goals (MDGs). It also compromises methodologies at the micro level to identify determinants of MDG achievement, on the one hand, and to quantify effects on poverty and inequality, on the other. The key finding based on a dynamic CGE model is that Uganda would need to spend an additional 10 percent on social sectors to meet the targeted MDGs by 2015. See Details.

12. Impact of Scaling Up Public Infrastructure Spending in Uganda: This research examines the current status of infrastructure in Uganda. It also investigates the dynamic relationship between scaling up public spending on infrastructure and its impact on growth. The research also focuses on the dynamic relationship between scaling up spending on infrastructure and poverty reduction. Increased spending on infrastructure would lead to 2.6 percent additional growth every year and reduce poverty to 15 percent by 2015. See Details.

12. Management of Future Oil Resources: This research focuses on the expected impact of oil revenues on the macroeconomy by examining the associated dutch disease problems associated with exploitation of natural resources. The paper examines the tradeoffs of directly investing the oil revenues in infrastructure and development of human capital versus creation of a fund taking into consideration intergeneration equity concerns. See Details.

 

ABOUT RESEARCH FOR TRANSFORMATION AND DEVELOPMENT

Research for Transformation and Development is a research organization started 2009 out of the apparent need for action-based and analytically generated knowledge which presently is limited in the East African Region

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