The Parties to the Peace Agreement agreed to establish and sustain a system of Government acceptable to and endorsed by the people of Uganda. The Parties agreed to establish a National Resistance Council as an Interim Government, with appropriate representation of UPDM, which within the term of the present government would resolve itself into a Constituent Assembly and draw up a Popular National Constitution, protecting fundamental human rights. The Parties agreed to hold a National Referendum to enable the people of Uganda to decide on the issue of the Party System and system of Government, and agreed for the Interim Government to hold free and fair general elections. The Government would prioritise the election of Resistance Councils and Committees from village to district level in war-ravaged areas.
The Government would release all combatants and non-combatants arrested as a result of the hostilities. The Parties agreed that UPDA soldiers who wish to continue with Military service and qualify would be absorbed and integrated into the National Resistance Army (NRA), while those who decided not to continue would be assisted to pursue education or be provided with the means to settle and resume civilian life. Civil servants would be considered for reinstatement. The Parties agreed that the National Army would be balanced and drawn proportionately from all districts of Uganda. The Government would mobilise all available resources to rehabilitate the socio-economic infrastructure in war-ravaged areas and adopt interim measures such as free education in war-ravaged areas until the end of 1989.