Uganda's Finance Minister Henry Musasizi has committed to using research-based evidence to guide industrial policy and public investment decisions as the country pursues its Tenfold Growth Strategy for economic acceleration. Speaking at a public policy dialogue at Uganda Management Institute, Musasizi emphasised that with limited public resources, government must identify interventions that deliver the greatest gains in industrial productivity, employment and exports for every unit of money spent.
The minister's remarks came during discussion of findings from a doctoral study by Dr Ramathan Ggoobi, the Permanent Secretary and Secretary to the Treasury, on what drives industrial sector growth in Uganda. The research identifies corruption control, access to credit, borrowing costs and market expansion as key factors shaping industrial performance. According to the study, a one per cent improvement in corruption control is associated with a 9.99 per cent increase in industrial output, while a one per cent rise in commercial lending rates is linked to a 3.11 per cent decline in output.
The research also points to population growth as a positive factor, estimating an 8.48 per cent effect on industrial expansion, suggesting Uganda's growing domestic market and labour supply could support production. The study highlights the importance of price stability, particularly controlling inflation and stabilising the exchange rate, alongside lowering the cost of capital and improving access to long-term financing. It recommends expanding affordable industrial credit, strengthening domestic value chains, aligning technical training with industry requirements and improving regulatory efficiency through digitisation.
Musasizi said the findings would inform the Ministry of Finance's policy decisions and help government assess the costs and benefits of measures intended to promote industrialisation and job creation. Industrial policy involves deliberate investment choices, including development of industrial parks, economic infrastructure and industrial land, as well as subsidised electricity tariffs and tax incentives for investors. The minister noted that government is already supporting domestic investment and access to affordable credit through initiatives such as the Parish Development Model and capitalisation of the Uganda Development Bank.
The research further calls for carefully designed trade and foreign investment policies to strengthen domestic producers and improve Uganda's export competitiveness. Musasizi said lower electricity tariffs and targeted tax incentives were among the measures government was using to support industrialists, and the research would help evaluate the effectiveness of these interventions as the Tenfold Growth Strategy is implemented. Musasizi also congratulated Ggoobi on receiving a Doctor of Philosophy degree in Economics from Nelson Mandela University in South Africa.
For savers and borrowers in Uganda, lower commercial lending rates resulting from the government's focus on improving credit access and reducing the cost of capital could make loans more affordable, while businesses investing in industrial expansion may benefit from targeted tax incentives and subsidised electricity tariffs.