Download Uganda today, Challenges for tomorrow: Implications for the Bank

Making Budget Reform Matter
for Poverty Reduction
Progress in implementing Uganda’s PRS
Paul Mpuga
April 27, 2006
1. Outline
Pre-1986 Uganda
1987-97: Economic stabilization, institutional &
infrastructure rebuilding
1997-04: Focus on poverty, service delivery
The National Budget, dialogue, PAF
Challenges
Conclusion
2. Background
Pre-’86 – failed state, no rule of law
Breakdown of infrastructure/instns
GDP decline by 2.7% p.a.
3-digit inflation
Government control &active in most sectors
National budget tool for implementing
controls
3. 1987-97: Stabilisation/reform
Wide spread poverty –UNHS1 56% (North 71%)
[now 38%, 63%]
Net prim sch enrolment 62% [84]; adult HIV
prevalence 18% [6-7]; access to safe water 25%
[55].
Life expectancy 48 yrs [44], stunting (<5yrs) 45%
Initial reforms
ERP -May 1987, currency revaluation
Fiscal reforms; major civil service reforms
Decentralisation (pilot in ‘93)
Reforms
Deepening and institutionalisation of reforms
Financial sector reforms (FIS ‘93)
Forex/interest rate, current a/c liberalisation ‘94
Marketing liberalisation/dismantling of GoU
monopolies – CMB, LMB, F&B …
Promoting investment, - Privatisation, UIA
Fiscal management - URA
4. 1997-04: Poverty/services delivery
PEAP ’97 - [target reduce pov to 10% by 2017],
1st rev 2000, 2nd 2004. PEAP summary used as PRSP
UPE, public service reform, health user fees
Focus on good governance/security
Provides framework for public policy action.
Guides medium term sectoral plans, district plans, national
budget process & public investment progs
To monitor progress GoU produces a Poverty Status
Report every two years.
5. 2004 –: Back to growth
1.
2.
3.
4.
5.
PEAP revised 2003/4 - 5 pillars –
Economic management;
Production, competitiveness and incomes pro-poor growth, MSMEs, agric/rural devt;
Security, conflict resoln & disaster mgt Northern Uganda recovery process
Governance; and
Human development
6. The national budget & poverty focus
Budget Act 2001 outlines process and stakeholder
participation
Process largely open &transparent, spending units
-CG/LGs, DPs, civil society involved.
Increased oversight role by Parliament
SWGs active in budget dialogue
PAF (intro in 1997/8) to protect poverty reducing
expenditures from cuts
PAF as share of GoU expenditures has been
growing (17% in FY98, 37% FY05), as well as
candidates for PAF!
National budget
Cap on supplementary budget at 3% of original budget.
Supplementary bgts need approval of Parliament
Public Finance &Accountability Act, and Procurement Act,
2003 helping to improve transparency/accountability of
public spending
Annual sector reviews helping to monitor progress.
PEAP matrix to be used by all DPs.
Planned PEAP implementation review will provide key
evidence on indicators and improve link to budget.
Gender budgeting guidelines to improve allocations
7. Challenges
80
70
% of people living in poverty
Increased Y
poverty: ‘00 34% to 38%
’03 [UNHS3
underway!].
Inequality: Gini
cf ↑ from 0.38
to 0.43.
60
50
40
30
20
10
0
National
Rural
Urban
92/93
96/97
Central
99/00
Eastern
02/03
Northern
Western
Challenges
Growth of GDP 4.9 – target 7%
Inflation –within target, but volatile, driven
by agric!
Exchange rate volatility
Growth of exports low – 4.4% and trade
policy not well coordinated
Large trade deficit
Energy/infrastructure gaps
Challenges
Translating PEAP priorities into MTEF
Resource constraints – MTEF ceilings.
Needs galore! Services, infrastructure,
energy, defense, PA, …
Transparency and efficiency, VfM
Low LE, infant/maternal mortality high
Access, & quality of public services
High population growth/high fertility rates
Policy interventions – G-tax, LGs, RDS!
9. Conclusion
Uganda has been at the centre of reforms
Great strides in reducing poverty &improving
service delivery
PEAP has provided key link to budget
Budget reforms and inclusion key in improving
allocations.
Quality, value-for-money still an issue
Ad hoc interventions disrupting policy/sector
performance