Over the past 25 years, Uganda has experienced sustained economic growth, supported by a prudent macroeconomic framework and propelled by consistent policy reforms. Annual Gross Domestic Product (GDP) growth averaged 7.4 percent in the 2000s, compared with 6.5 in the 1990s. Economic growth has enabled substantial poverty reduction, with the proportion of people living in poverty more than halving from 56 percent in the 1992 to 23.3 percent in 2009. However, welfare improvements have not been shared equally; there is increasing urban rural inequality and inequality between regions. Revitalizing economic growth and tackling persistent poverty will require addressing a number of challenges. These include alleviating infrastructure bottlenecks; increasing agricultural productivity; managing land, water and other natural resources; addressing demographic challenges; and confronting governance issues. The development and management of water resources is intimately linked to Uganda's continued development ambitions. Water can be both a positive force-providing productive input to agriculture, industry, energy and tourism, and sustaining human and environmental health-as well as a destructive one-to which the devastating consequences of floods and droughts can attest. The National Water Resources Assessment (NWRA) estimates that Uganda's total renewable water resources are about 43 million cubic meters (MCM), less than was estimated in the Ministry of Water and Environment's (MWE's) Sector Investment Plan (SIP) in 2009. About 13 percent of this is sustainable groundwater (5.67 MCM) and the balance is surface water (37.41 MCM). About one half of all districts in Uganda experience annual rainfall deficits-the difference between evapotranspiration and rainfall-ranging from slightly above zero to 400 mm. The frequency of rainfall anomalies below normal (or long-term annual average) is significantly greater than the frequency of rainfall anomalies higher than normal. The Uganda water Country Assistance Strategy (CAS) aims to assist the Government of Uganda (GoU) in identifying priority actions for building on successful outcomes, tackling remaining challenges, and exploiting opportunities in Uganda's water sector. The objective of the water CAS is to define the World Bank's strategic role in supporting GoU to better manage and develop its water resources. The recommendations of the water CAS are complementary to the World Bank Uganda Country Assistance Strategy (CAS) 2011-15 priorities for Uganda and consistent with the country's development objectives as defined in the National Development Plan (NDP) and water and related sector plans and strategies, which form the foundation of the World Bank Uganda CAS.