Uganda has received approval from the World Bank for $540 million (approximately Shs 2.1 trillion) to fund the second phase of its urban development initiative, now branded as the Uganda Cities & Municipalities Infrastructure Development (UCMID) program.
Of this total, $80 million is a grant.
The program, which succeeds the first phase of the Uganda Support to Municipal Infrastructure Development (USMID) program, is aimed at enhancing urban planning and management, improving access to climate-smart infrastructure, and creating jobs for urban residents, including displaced populations in refugee-hosting districts.
Speaking at the Uganda Media Centre on Tuesday, Minister of Lands, Housing and Urban Development Judith Nabakooba said UCMID will run over six years, from 2026/27 to 2030/31, and will be implemented across 10 regional cities, 26 municipalities, and 13 refugee-hosting districts.
She emphasized the program’s broad reach, noting it is expected to benefit an estimated 5.6 million people, including 1.6 million in refugee-hosting areas.
“This program positions cities and municipalities at the heart of job creation, productivity gains, and economic transformation,” Minister Nabakooba said.
“By channeling investments through economic corridors, UCMID will improve access to regional markets, reduce congestion, lower logistics costs, and enable small and medium enterprises to thrive particularly those employing youth and women.”
The beneficiary cities include Lira, Arua, Gulu, Soroti, Mbale, Hoima, Fort Portal, Jinja, Mbarara, and Masaka. Municipalities currently under USMID include Busia, Kitgum, Apac, Tororo, Kamuli, Lugazi, Moroto, Kabale, Ntungamo, Mubende, and Kasese, while 15 new municipalities such as Mityana, Bugiri, Rukungiri, Kisoro, and Kapchorwa have joined the program. Refugee-hosting districts include Arua, Terego, Yumbe, Madi-Okollo, Lamwo, Adjumani, Moyo, Obongi, Kiryandongo, Kamwenge, Isingiro, Kikuube, and Kyegegwa.
The program is expected to create approximately 20,000 permanent jobs, including 5,000 for refugees and host communities, through market operations, maintenance services, waste management, and logistics.
Expanded urban infrastructure and better market access are projected to reduce business costs, boost demand for labor, and increase household incomes, particularly benefiting women, youth, and low-income groups.
Uganda is rapidly urbanizing, with 27% of the population now living in urban areas, growing at a rate of 5.2% annually.
By 2030, the urban population is projected to increase by 69%, adding an estimated 8.1 million people. Despite hosting only a quarter of the population, urban areas are estimated to generate 70% of the country’s GDP, highlighting the importance of programs such as UCMID in sustaining urban growth.
“Urbanization is a critical enabler of national development,” Minister Nabakooba said. “Programs like UCMID are strategic vehicles to ensure this growth is supported by climate-smart infrastructure, improved service delivery, and job creation.
More than one-third of new jobs in Uganda are being created in cities and towns, and this program will strengthen that trend.”
UCMID’s objectives align with Uganda’s Fourth National Development Plan (NDP IV, 2025/26–2029/30), which sets ambitious targets including achieving higher household incomes, full monetization of the economy, and the creation of 2.5 million new jobs.
The program also supports Uganda Vision 2040 by institutionalizing reforms that position cities as engines of economic growth, leveraging private sector participation, and building governance systems for continuity and scale.
The program will focus on five key pillars: urban roads and mobility, urban drainage and flood mitigation, nature-based solutions and green infrastructure, sustainable solid waste management, and local economic development with job creation. Implementation will also include recreational and sports facilities to improve urban liveability.
UCMID funds will be allocated to strengthen the capacity of cities, municipalities, refugee-hosting districts, and relevant government ministries.
Progress will be measured by enhanced urban management, access to improved infrastructure and services, and increased employment opportunities.
Next steps include signing legal agreements between the Government of Uganda and the World Bank, stakeholder sensitization, and procurement of services for project implementation.
Minister Nabakooba urged local government leaders to ensure compliance with environmental and social safeguards to facilitate a smooth start of works in the upcoming fiscal year.