This paper uses the system of economic and environmental accounting for water to demonstrate how the water
sector interacts with the social-economic sectors of the economy. Furthermore, it reviews the existing institutional
and policy framework in Uganda, and proposes an analytical framework which can be used to provide sound intersectoral
planning in order to achieve sustainable water resource use. The proposed framework also articulates how
outcomes of water policies and social-economic policies can be analyzed. In Uganda, the uneven distribution of
water resources both in space and time, poses constraints to economic activity particularly in the water-scarce
regions of the country. The problem is being exacerbated by the increasingly erratic rainfall and rising temperatures.
The accounting results show that the current level of water use within the economy is less than the available
quantity. In this regard, there is room for the development of mechanisms to increase its utilization. This would
serve to mitigate the scarcity especially of water for production which primarily emanates from climate variability.
This in turn affects the performance of the economy, as key sectors such as agriculture are rainfall-dependent.