Putting monetary value on Uganda’s nature

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OPINION

By Dr Peter Babyenda

The Environment for Development Initiative Centre at Makerere University (EfD-Mak), with financial support from Deutsche Gesellschaft für Internationale Zusammenarbeit (GiZ), has developed the Model for Natural Capital Policy Assessment (MONCAP).

This was done in collaboration with the Ministry of Water and Environment (MWE), the Ministry of Finance, Planning and Economic Development (MoFPED), Uganda Bureau of Statistics (UBOS), National Planning Authority (NPA), and other stakeholders in the environmental sector.

MONCAP is an Excel-based tool designed to integrate natural capital—such as forests, wetlands, and water—into national policy and fiscal planning.

Using economic multipliers and output intensities, it links these assets to energy use, greenhouse gas emissions, and macroeconomic indicators like GDP, employment, and sectoral output. The tool arrives at a pivotal moment.

Uganda’s economy is expanding, but its natural resources are under growing pressure from climate change and human activity. For example, UBOS data analyzed through MONCAP reveals a sharp decline in wood stock between 1990 and 2015: supply dropped from 169 million tons to 69 million tons, while demand surged from 17 million to 49 million tonnes.

This imbalance threatens both livelihoods and long-term economic stability.

Uganda has committed to reducing greenhouse gas emissions by 24.7% by 2030 under the Paris Agreement. Achieving this target requires policy instruments that balance development with conservation. MONCAP is designed to meet this need.

It helps policymakers evaluate the economic returns of investing in natural capital, assess climate mitigation strategies, and understand trade-offs between environmental protection and growth.

At its core, MONCAP uses a Social Accounting Matrix (SAM) multiplier model to show how changes in natural capital flows—such as forestry or energy—affect GDP, employment, household welfare, and emissions.

It can simulate scenarios like increased forestry investment or a shift to renewable energy, projecting impacts across sectors. Government officers have already been trained to apply the tool in policy analysis.

The use of MONCAP aligns with Uganda’s ten-fold growth strategy, which aims to raise GDP from $50 billion to $500 billion by 2040.

This strategy, built on the “ATMS” framework—Agro-industrialization, Tourism, Minerals, and Science, Technology and Innovation—forms the foundation of the Fourth National Development Plan (NDP IV). While these sectors promise transformation, they also heighten demand for wood, water, energy, and land, placing natural capital under strain. Investing in natural capital, especially forests, offers a pathway to reconcile growth with sustainability.

Forests provide timber, jobs, and energy, while also sequestering carbon, stabilising soils, and preserving biodiversity.

Yet their role in Uganda’s transformation has received limited empirical attention. Without safeguards, rapid expansion could deplete natural capital, increase emissions, and degrade ecosystems.

MONCAP helps avoid this trajectory by quantifying the long-term benefits of sustainable investment.

By placing a measurable value on nature, MONCAP equips policymakers with evidence to pursue balanced growth—ensuring Uganda’s economic ambitions do not come at the expense of the forests, wetlands, and water resources that sustain its prosperity.

We hope that the model will be used to facilitate the inclusive and sustainable development of the country.

The writer is a Policy Engagement Specialist, Inclusive Green Economy Program, EfD-Mak Centre, Makerere University; Email: pbabyenda@gmail.com