The prospects for the economy are positive. GDP growth in 2017 was strong and 2018 forecasts suggest growth will reach 5.9 percent. The main drivers of the economy in 2017 were agriculture and the services sector, but economic growth in 2018 is likely to be driven mainly by public infrastructure investment. The country is also expected to start benefiting from recent oil discoveries.
The government allocated 31 percent of its 2016/2017 budget to road and energy infrastructure, by far the largest allocation of any sector. Only 4 percent of the road network is paved, and the government intends, along 49 roads, to upgrade 2,760km to paved standard.
Construction is also expected to benefit from demands for infrastructure to support the country’s developing oil industry. Proposed schemes include a deal with Tanzania for a USD3.55bn oil export pipeline and the development of Kabaale Airport in Hoima.
Meanwhile, Chinese investment is funding various projects including the USD2.3bn railway linking Kampala to Kenya through the border town of Malaba.
|Cost escalation 2017–18:||3.0%|
|Cost escalation 2018–19:||3.0%|
|Location factor (USD):||53.4|
With the increasing investment in infrastructure and the expected benefits from the country’s nascent oil sector Uganda’s economy is likely to grow. However, unstable politics continue to affect the construction industry, bringing a risk of increasing costs.
This content is part of the International construction market survey 2018