Business & Management
Academicians Retooled on the System of Environmental-Economic Accounting (SEEA)
By Jane Anyango
Over 30 members of the academia comprising staff and graduate students from Makerere University School of Economics, Muni University and Makerere University Business School on 28th September, 2021 converged for a training on the System of Environmental-Economic Accounting (SEEA).
The blended seminar held physically and virtually was organized by the Environment for Development Initiative (EfD-Mak) Centre facilitated by the Makerere University don, who is also Research Fellow at the EfD-Mak center and Fulbright Scholar Dr. Nickolas Kilimani.
Dr. Kilimani streamed live from the USA on the System of Environmental-Economic Accounting focusing on the Integrated Water Resources Management, Policy Analysis and Decision making.
Dr. Kilimani highlighted the recent developments in Environmental-Economic Accounting in Uganda, the System of Environmental-Economic Accounting and its objectives, Water resources accounting modules and the role of Water Accounting in Integrated Water Resources Management (IWRM).
Dr. Kilimani observed that the national economic policy has been underpinned by macroeconomic theory and the necessary statistics are collected and arranged using the System of National Accounts (SNA) which covers all economic activity from production to consumption and accumulation, and all industries using the Gross Domestic Product (GDP) as the key indicator.
He noted that the basic theoretical foundation of the SNA has not changed since 1953 even with the detail that has evolved with technological, economic and social change adding that, for more than 70 years, governments and business have used the information from the SNA as an information source in economic analysis and policy.
“The SNA does not adequately account for the environment and yet economic activity can adversely drive both observed and unobserved changes in it. The System of Environmental-Economic Accounting (SEEA) aims to address the deficiency of the traditional national accounting (the SNA) by accounting for the environment and linking it to environmental information through common concepts, definitions and classifications” Dr. Kilimani stated.
Compared to the SNA, Kilimani said, the SEEA is not yet widely used in decision making, partly because, it has recently been adopted as an international standard.
Dr. Kilimani said the objectives of SEEA are to develop a consistent data system for economic and environmental data and provide a common system to derive indicators and measure sustainable development.
He explained that the SEEA provides a better measure of national wealth to include not only produced capital but also natural capital, and assesses availability of natural resources, their use in production and final consumption and the cost of depletion. In addition Kilimani said, SEEA assess the level and cost of emissions and other waste from production and consumption and identifies monetary flows related to the environment which are already within the SNA (e.g., expenditures on environmental protection, environmental taxes and subsidies,etc.)
Dr. Kilimani underscored the role of Water Accounting in Integrated Water Resource Management (IWRM) noting that the growing pressure on water resources and high uncertainty on future water availability have caused the urgent need for better planning and management.
He emphasized that water is not only essential to cover basic needs for humans and the environment that underpins them, it is also a key factor for the economic development of diverse sectors with conflicting interests as regard to its use.
“The IWRM paradigm is considered a good approach to deal with those complexities. It proposes a coordinated utilization of water and land resources to support economic and social development without compromising environmental sustainability.
It recognizes that water management is a key aspect since human intervention is the trigger for all trade-offs and conflicts around water. IWRM highlights the influence of catchment management on water resources quantity and quality, as well as the need to preserve the natural capital for future generations.” He added.
Dr. Kilimani said Water management is considered a social, economic, and political issue rather than just technical and therefore, stakeholder involvement in water management is needed and this translates into legal requirements for public participation and transparency in water governance.
“The value of water, the opportunity costs of its allocation, or the costs of making it available should be known and recognized in order to incentivize water use efficiency. The implementation of those legal requirements calls for making information about water publicly available in a clear and accessible way. In this sense, water accounting emerges as a useful tool to promote efficiency and transparency in water resource planning and management”, Kilimani stated.
The current and proposed framework for IWRM in Uganda
Dr. Kilimani said the existing institutional and policy framework shows the multiple institutions charged with the management of water resources in Uganda, but, there is a need for an explicit connection between water sector policies and those of the social-economic sectors, since water resources are a key input into the country’s economic and social sectors.
“The institutional framework in Uganda, provides for a key component such as Water for Production. Institutions in charge of managing the productive sectors of the economy, i.e., MoFPED, (MAAIF), and the MTTI need to link their development plans and policies with those of the water sector. A sound national water policy should relate the different development plans of the social-economic sectors in an explicit manner”. Kilimani said.
In the (2015) paper, Dr. Kilimani and other researchers proposed a framework for policy analysis which relates the development plans for the different social-economic sectors to those of the water sector.
This framework he said is aimed at providing policy analysis of IWRM in a typical economy by linking e.g., agriculture, industry, households, hydro-electricity and navigation which are key sectors that primarily depend on water.
The don explained that development plans in these sectors involve several policy variables and inputs. Therefore, the interaction between the policy variables and their impacts are monitored through multiple indicators in the social-economic and ecological domains.
“Given the multiplicity of variables, the SEEA framework uses aggregated water data as do the existing approaches for analyzing the associated policy impacts.
Computable general equilibrium (CGE) models also use aggregation and hierarchical decomposition in order to simplify model development and data compression to manageable sizes.
While the aggregation hides some of the temporal and spatial variability, it still preserves the fundamental trends that help to provide needed answers by policy-makers”, Kilimani said.
SEEA, a new area of interest to academicians and the Government of Government
The Director EfD-Mak Center Prof. Edward Bbaale described the seminar as the most exciting because it brought on board a new area which is of interest to the Government of Uganda.
Prof. Bbaale said, Uganda Bureau of Statistics, the National Planning Authority and other partners are trying to work on the system of Environmental-Economic Accounting away from the conventional system of National Accounting.
“Our System of National Accounting is deficient in incorporating Environmental aspects because as we produce and consume, then in one way or another, we are depleting the environment which we refer to as natural capital and this natural capital is all the time depreciating but there is no way in our conventional GDP measurements that, but now, this new system is solution to this”, Prof. Bbaale stated.
From the academic perspective, Prof. Bbaale commended the facilitator for showing participants how to undertake the System of Environmental-Economic Accounting and ably bringing participants on board in terms of the key variables that are important in this new system specific to the water sector.
The Director appreciated Dr. Kilimani for exposing participants to the policy, non-policy and the output variables and giving tips on some methods such as the Computable general equilibrium (CGE) which can be utilized to understand the impact of a policy decision on the rest of the economy in terms of the social, economic and environmental outcome.
“The lesson here is that we need to invest our time into understanding this new System of Environmental-Economic Accounting as a way of incorporating new ventures in our research as economists and academicians. And to our graduate students, this is an area worthy of investing their time and I am glad that a number of graduate students attended this seminar”, Prof. Edward Bbaale said.
Prof. Bbaale said, a number of reports are already out and that SEEA is an area which is very virgin, where very limited research has been undertaken partly because of lack of numbers that incorporate the environment into the entire national analysis.
“But now, some strides have been taken, some milestones are being achieved and if our own, Dr. Nickolas Kilimani with a Fulbright Scholar in the US is having all these on his fingertips, it is a huge resource to Makerere University, to our country and it is a starting point of deeper analysis into how the environment is being affected when we are doing our production and consumption activities”, Prof. Bbaale said.
He reported that the seminar was quite intriguing and important for national policy and pledged to arrange to involve policy makers from the Ministry of Water and Environment and the National Water and Sewerage Corporation in the next seminar.
Participants comment on the seminar
Makerere University PhD student from the School of Economics Alex Aliga, who is also a lecturer at Muni University Uganda said the seminar was timely.
“It has enriched many of the things that I had learnt in class and I had taken for granted. The System of Environment and Economic Analysis though new is very important and interesting because once you begin to understand Natural Resource Accounting and integrate it into GDP, then we get to understand the full value of our resources. In that case, it means that we may actually be richer than what we thought we are. Some of these things are not easy to bring to the GDP which is the measure of our national economy.
I got many lessons; – understanding how you can apply the theoretical things into practical and to influence policy is very important for our country. Given the fact that our resources are under attack, climatic change and environmental issues are real, we need this knowledge so as to be able to sustainably use our resources for a better future”, Mr. Aliga said.
Dr. Paul Edabu, a Senior Lecturer at Muni University said:
“The day’s seminar was an eye opener to the current situation in Uganda bearing in mind that we have two blocks of people who are in accounts and economics and there is no integration even in our ministries.
Our country is at a paradox, today people are restricted to cut trees from the forests and also carrying out farming in the wetlands and the next day, a factory is erected in the wetland. This seminar is timely and something I had yearned to learn because it incorporates the environment as a key resource into the national accounting system”, Dr. Edabu commented.
SEEA and the Government of Uganda
Government of Uganda (GoU) is moving towards resource-led industrialization by developing a set of natural capital accounts under the Uganda Natural Capital Accounting (NCA) program. The National Biodiversity Strategy and Action Plan (NBSAP), National Development Plan, and Uganda Green Growth Development Strategy (UGGDS) recognize the challenges of development planning without accounting for its effect on natural resources, many of which are non-renewable.
In cognizance of the above, GoU with her development partner UNEP with its World Conservation Monitoring Centre arm is working with the Darwin Initiative to develop Natural Capital Accounts for Uganda.
The project is aligned with existing initiatives on natural capital accounting, i.e., the Gaborone Declaration for Sustainable Development in Africa, the UN project on Natural Capital Accounting, and the World Bank Wealth Accounting and the Valuation of Ecosystem Services programme.
The Uganda Bureau of Statistics (UBOS) Ministry of Water and Environment, and Ministry of Lands, Housing and Urban Development commenced with the development of land accounts and Water accounts in 2019. Under the NCA program, the country launched the Wood Asset and Forest Resources Accounts.
Natural Capital Accounting effort is based on the international statistical standard, System of Environmental-Economic Accounting (SEEA).
Jane Anyango is the Principal Communication Officer, College of Agricultural and Environmental Sciences (CAES)
Makerere University in partnership with Promote Uganda Company Limited (PROUL) is set to establish an agro-processing skilling hub next year to expose students to agricultural machinery.
The hub that will be based at Makerere University main campus in Kampala will house agricultural machines that add value to agricultural products.
While unveiling the initiative on Thursday, November 23 during the opening day of the three-day 2nd Innovation and Agro-processing machine at Makerere University’s Freedom Square, Mr David Nsubuga, the Director for PROUL said many youths remain unemployed despite their academic qualifications and it is high time they embraced new technology to create more job opportunities for the graduates. He revealed that the university will be signing a memorandum of understanding with PROUL next week.
“On top of the courses students are studying, we are going to establish a skilling center where they can be exposed to the machines that add value to agricultural products. We believe that when they start buying and selling finished agricultural products, this, will start them on the journey of industrialists.” he noted
The Vice Chancellor, represented by his deputy Prof. Umar Kakumba, revealed that the university has student innovators who just need backup funds to transform the agricultural sector.
“They have innovated machinery that can do irrigation. We are partnering with Promote Uganda Limited to showcase some of the innovations and to be able to connect them to banks which can give them credit and be able to promote their machinery that they are producing including those that do a lot with production of finished goods.” He said in a message delivered by Prof Umar Kakumba, the Deputy Vice Chancellor in charge of academics.
Student innovators of agricultural machinery are those pursuing degree programmes related to bioprocessing engineering, water resources engineering, dealing with mechanical engineering and students of business management sciences among others.
The 2nd innovation and Agro-processing machine expo is a three day exhibition that will run from Thursday, November 23 to Saturday, November 25.
Prof Kakumba understands 80 percent of Makerere graduates fail to get formal employment and revealed the need to inject money in such innovations to harness surging number of unemployed youth flooding the streets of Kampala looking for what to do saying, “Every year, higher institutions of learning and tertiary institutions produce about 150,000 students and yet government job slots are around 30,000 only which is a great blow to students who want white collar jobs,” he added
Mr Steven Byantwale Tibeijuka, the Director Crop Protection in the Ministry of Agriculture, Animal Fisheries and Industries who represented the minister for Agriculture, Mr Frank Tumwebaze pledged on behalf of the government to support the skilling hub that will be established at Makerere University next year.
“I ask the University to put it into writing and address the letter to the minister, the government cannot fail to give you funds once everything is ready,” he pledged
Dr Cathy Mbidde, the manager of the Makerere University Innovation hub said the hub was established in August 2022 under the office of the Vice Chancellor to commercialise the innovations from basically research that the university does and their main goal is to create awareness of the agro-processing machinery.
She added: “When you look at the current Uganda National Development Plan III government’s agenda goal one is agri-industrialisation. As the University, yes we do research and teach but how do we work with the private sector to achieve that goal. We have students who have done research and discovered nutritional values but they don’t have the machinery and access.”
She believes this expo will act as an eye opener to young innovators to team up and purchase the agricultural machinery they need to start up small companies and food processing enterprises while still at the university.
According to her, every year Makerere University graduates around 13,000 students and they can’t find jobs anywhere so there is a need to come up with financing models through financing companies, Non-governmental organisations, and the government to help them to get machinery on credit.
Promote Uganda limited is a company that produces agricultural machinery and their partnership with the university is to introduce the idea of using machines to add value to agricultural products.
When many students graduate, they fail to get formal employment, and end up going to Arab countries where many have lost their lives.
Mr Nsubuga wants the skilling training on operation of agricultural machinery to be added to the students’ courses.
The skilling center will help students to become entrepreneurs and know how to utilise raw materials that are readily available from agriculture to make value added products. The expo is a cross-cutting student exhibition.
Mr Anthony Akandwanaho, a student from Busitema University, said had come to exhibit a day and night dryer invented by his lecturer.
“The machine uses solar thermal during the day to dry the products which it collects directly from the sun and transpires the heat to the products for drying and solar energy during the night,” he said
He noted that this machine dries products from both animal and plant types including meat, chicken, fruits and vegetables. And the maximum drying time for products is 24 hours, for those with higher moisture content like pineapples. However, for products like meat, it dries them within eight hours.
“The unique beauty with it is that you collect the water from the product and can be used for domestic purposes.” Mr Akandwanaho explained
The student also exhibited a chicken de-feathering machine which is able to rip all feathers from the chicken. The mode of operation is that you slaughter the chicken and soak it in warm water for about one minute and transfer the chicken to the machines and in 15 seconds, the feathers are all removed. Its production rate is three chicken per minute.
Some of the exhibited machinery include a garden sprayer, a maize mill, grain grinder stainless, potato slicer, electric chips cutter, vacuum sealer, food dryer, bone Shaw, meat cutter among others.
The Inclusive Green Economy program of the Environment for Development Initiative in Uganda on 17th November hosted stakeholders across the country’s sectors to get their perspectives on biomass transition to clean energy sources in Uganda.
Uganda’s IGE engagement specialists Dr. Peter Babyenda says this is one of the work plan item on on social inclusion where stakeholders were identified by IGE fellows during the 17th EfD Annual meeting in Ghana.
In a meeting held at Sheraton Hotel in Kampala, stakeholders gave the situation analysis of biomass use in the country, where they want to go, how to go there and who should take the country there.
“We found out that almost 90% of our households depend on biomass whether in rural areas or town. This is attributed to cultural issues where certain foods are believed to have good taste when cooked on firewood or charcoal, the fear to use electricity and gas that may result to shocks and fire explodes, inaccessibility to clean energy sources and affordability issues.”
The meeting resolved to primarily focus on behavioural change efforts of the sustainable use of biomass and gradual transitioning to clean energy sources.
’We concluded that for now we cannot say let us move to clean energy but go slowly go slowly on sustainable use of biomass by planting more trees so that instead of depending on natural forests, we depend on plantation forests, use energy saving stoves and those that can save users on effects of smoke and slowly move to clean energy sources by connecting households to electricity and make it affordable and make gas available at an affordable cost’´Babyenda said.
The meeting also proposed the need for more awareness creation about alternative energy sources such as biogas for schools and prisons.
Representing the Principal College of Business and Management Sciences, Dr. Yawe Bruno thanked Sida through the EfD Global hub at the University of Gothenburg for funding the IGE program and the EfD-Mak centre.
“The use of biomass in Uganda has persistently remained high. 80% use firewood and 13% charcoal for cooking but there is a proportion that use a combination of those two. This imposes great implication for household welfare.
Biomass usage affect our productivity, schooling of children, labour market participation especially by women and children. On health, the use of biomass especially firewood causes eye defects, breathing difficulties, snake bites, body dislocations and sexual abuse,” He explained.
Besides household effects, Yawe noted that reliance on biomass has effects on the environment.
Yawe reported that Uganda’s forest cover is being threatened by biomass usage reducing it from 24% in 1990 to less than 9% to date. Transiting to renewable and clean energy requires clear understanding of supply and demand relationship for both biomass and clean energy.
“We must know what drives the uptake and while many can afford gas and electricity, why are we insisting that we should have charcoal? Comparatively, a 6kg gas cylinder costs 60 thousand and today a bag of charcoal costs not less 70 thousand but some households find it cheaper which is expensive and because of the felling of trees, the quality of charcoal may not last more than a week,”
He challenged stakeholders to find out why the supply and demand for biomass is still high amidst detrimental effects and why the supply for clean energy is still low amidst numerous innovations.
Representing the Director EfD-Mak Center, the Dean, School of Economics Dr. Mike Okumu said many households are struggling to transition from firewood and charcoal due to socioeconomic characteristics that define them.
Okumu attributed the climate change effects to the household behaviours and enterprise behaviour and challenged stakeholders to find innovative ways of co-existing with the environment to enhance productivity and also feed communities
He congratulated the IGE engagement specialists for being intentional in identifying the participants taking into account that the majority and poorest population resides in the rural Uganda, and Uganda’s biggest population being the youth.
The meeting comprised specialists in environmental conservation, researchers in renewable energy specifically biomass energy, persons dealing in innovations in sustainable productivity, those working with rural energy transition and renewable energy through use of waste plants and animal residues and persons engaged in youth environmental initiative particularly agroforestry.
Okumu also congratulated the EfD-Mak centre for bringing on board collaborative partners from different Ministries, Departments and Agencies , the private sector and Civil Society organisations.
He expressed the centre’s commitment to engage in similar engagements for purposes of having a drive into a cleaner Uganda and mitigating climate change effects on Uganda’s economy and a drive to having persons making informed decisions towards a better climate sensitive Uganda.
Jane Anyango is the Communication Officer EfD Uganda
Business & Management
Researchers call for creating of fund to support industrial symbiosis for sustainable entrepreneurship
Government has been advised to create a fund to support Small and Medium Enterprises to implement symbiotic practices, which they say will foster sustainable development.
Dr. Saadat Kimuli Nakyejwe, the principal investigator, and Dr. Kasimu Sendawula from Makerere University Business School and the College of Business and Management Sciences at Makerere University, respectively, argued that if firms practice industrial symbiosis (working together to forge a mutually beneficial relationship), they are bound to grow. This symbiosis may take different forms, such as knowledge sharing, raw material sharing, and the sharing of machines and space, among other things.
Dr. Saadat said these mutually beneficial relations will result in more profitable businesses, conservation of the environment, reduction in production costs, and creation of jobs. Furthermore, he emphasized that industrial symbiosis can also lead to innovation and increased competitiveness within industries. By collaborating and leveraging each other’s resources, firms can develop new products and services that meet evolving market demands. Ultimately, this not only benefits individual businesses but also contributes to overall economic growth and sustainability.
Dr. Kasimu Sendawula, the Co-PI of the project, said there is a need to sensitize entrepreneurs about the benefits of industrial symbiosis, emphasizing that it can lead to cost savings through resource efficiency and waste reduction. Additionally, industrial symbiosis can foster a more circular economy by promoting the reuse and recycling of materials, reducing environmental impact, and promoting sustainable practices.
The research was looking at “Exploring the Potential of industrial Symbiosis as an Innovative strategy to foster sustainable Entrepreneurship in Micro and Small Enterprises in Uganda” a research funded by Makerere University Research and Innovations Fund.
The researchers also called for an amendment to the current Micro, Small, and Medium Enterprise (MSMEs) policy so that it can address the environmental, social, and economic issues undermining the potential of MSMEs to undertake industrial symbiosis. By incorporating industrial symbiosis into the MSMEs policy, it can provide the necessary support and incentives for businesses to adopt sustainable practices. This would not only benefit the environment but also enhance the competitiveness and resilience of MSMEs in the long run. The team also called on the government to put in place a symbiotic fund to support organizations. This fund could provide financial resources and technical assistance to MSMEs interested in implementing industrial symbiosis initiatives. Additionally, the team suggested that the government should collaborate with industry associations and experts to develop training programs and knowledge-sharing platforms to help MSMEs navigate the challenges and opportunities of industrial symbiosis.
Ms. Nakalembe Betty, one of the entrepreneurs that participated in the research, shared with participants during the research dissemination on November 9, 2023, that she had successfully implemented an industrial symbiosis initiative in her textile business. She emphasized the importance of networking and building relationships with other businesses in order to identify potential symbiotic partnerships. Ms. Nakalembe also highlighted the positive impact that industrial symbiosis had on her business’s sustainability practices and overall profitability. She shared that since the training, she has been able to use the waste textile materials to make decorative materials, masks, and glass covers, among other products. This, she said, has reduced her waste disposal and also increased her income. Additionally, Ms. Nakalembe mentioned that through industrial symbiosis, she has been able to establish a network of suppliers and customers who are interested in sustainable products. This has not only expanded her market reach but also allowed her to contribute to the circular economy by promoting the reuse and repurposing of materials. As a result, her business has become more resilient and environmentally conscious, positioning her as a leader in sustainable practices within her industry.
Ms. Natayi Aisha, who is in charge of recycling at Luuka Plastics, also shared that the company recycles plastic and polynene bags in an effort to reduce waste and minimize their environmental impact. By implementing recycling practices, Luuka Plastics is able to divert plastic waste from landfills and give it a new life, reducing the need for virgin materials and conserving valuable resources. This not only benefits the environment but also creates a positive image for the company, attracting eco-conscious customers who appreciate their commitment to sustainability.
Mr. Galiwango Hamza, the Director of Industrial Parks at the Uganda Investment Authority, welcomed the recommendations of the research team, saying that industrial symbiosis aligns with Uganda’s goals of promoting sustainable industrial practices. He emphasized the importance of companies like Luuka Plastics in driving economic growth while minimizing environmental impact. Additionally, Mr. Hamza expressed his hope that other businesses would follow suit and adopt similar practices to contribute to a greener and more sustainable future for Uganda. Mr. Ezra Byakutangaza, from the Research and Innovation Fund of Makerere University, the funding agency, congratulated the researchers and also thanked the government for the continued funding of research and innovation.
Research Team
- Dr. Saadat Kimuli Nakyejwe
- Dr. Sendawula Kasimu
- Ms. Shamirah Najjinda
- Eng. Dr. Ismail Kizza K.
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