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EconPapers: Uganda's Economic Reforms: Insider Accounts

Skip to main content. Advertisement Hide. This process is experimental and the keywords may be updated as the learning algorithm improves. This is a preview of subscription content, log in to check access. Bowman, Mary Jean. Mushkin, ed. Washington , DC: U. Department of Education.

Towards budget support

Google Scholar. Bray, Mark. International Journal of Educational Development 6 3 : — CrossRef Google Scholar. Chang, Ha-Joon. London: Anthem Press. In Ha-Joon Chang, ed. Washington, DC: World Bank. Kiiza, Julius.

Uganda's Economic Reforms : Insider Accounts

In Joseph Mensah, ed. New York: Palgrave Macmillan.

Kampala: Fountain Google Scholar. Some improvements have been seen in relation to cross-border trade. However, Uganda continues to face significant challenges concerning trade, not least because of low value addition to agricultural exports, high transport costs due to inadequate infrastructure, poor standards and quality control systems, and a high trade deficit. Also, unclear and poorly enforced land and property rights, combined with systemic corruption, severely hampers the investment climate.

In general, Ugandan CSOs, and in particular those engaged in service delivery, have a relatively free space in which to operate, while organisations working on more sensitive issues, such as accountability, natural resource management and minority rights, continue to experience some challenges. Corruption in Uganda continues to be both systemic and endemic, and while state and non-state institutions have made some efforts to curb this trend, numerous high-level corruption scandals continue to surface.

In the mids, the GoU began a major overhaul of its approach to planning and budgeting in an effort to eradicate poverty in Uganda. The PEAPs identified priority sectors for poverty eradication, of which water supply was one of the sectors prioritised.

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Rural water supply became an especially high priority after government solicited the views of the poor themselves as to their priorities. In view of these developments, and against the background of general discontent with the effectiveness of aid, Uganda became a laboratory for new approaches among DPs. The sector was a high priority sector of the GoU in order to reduce poverty.

Nevertheless, previous evaluations have questioned whether resource allocation to the sector has been credible from a poverty reduction perspective. A Sida [8] documentation study [9] found that resource allocation had more often been allocated to urban water and sanitation rather than to rural areas where the poorer segments of the population live.

The Uganda Vision was launched in and has the transition of Uganda from a low-income to a middle-income country within 30 years as its overall aim. Water and sanitation are mentioned as key factors to improve housing and health of the population. Environment and climate changes are also explicitly mentioned as key priority areas for the Vision Targets for both water and sanitation are instead defined in the NDP. During the first decades of the Museveni era, Uganda became a favoured aid recipient and a pioneer of many innovations in aid management. During the s, donor coordination by the government was rather weak.

The positive fiscal and macro-economic development during the s, together with the establishing of MOFPED, enabled the dialogue between the GoU and DPs to move on from structural adjustment concerns to a more detailed consideration of development strategy and public expenditures. There were corresponding changes in the way aid was delivered.

Balance of payments support for structural adjustment was succeeded by debt relief and, after HIPC, by increasing use of general and sector budget support. The impact of new aid modalities varied significantly from sector to sector, reflecting both sector characteristics and the preferences of different donors. Uganda became one of the first recipients of budget support from international donors in the late s, in what was seen as a pro-development partnership between a reform-minded government and external funders.

The political and economic context in Uganda at that time provided a highly conducive environment for budget support. These positive conditions were underpinned by a strong and well-established technical dialogue between the GoU and DPs on economic issues, supported by an open and highly-capable MOFPED. Given this positive context, budget support achieved a number of early successes. First, it enabled the GoU to scale up financing for service delivery in the budget, which led, in turn, to a rapid increase in service-delivery outputs.

Second, it was effective in influencing the overall pro-poor orientation of budget allocations. Third, it strengthened institutional frameworks for planning, budgeting and decentralised fiscal transfers helping, in particular, to increase and maintain the pace of central Public Financial Management PFM reforms. From around , however, the three positive factors of leadership, consensus and fiscal space started to shift, making it increasingly difficult for budget support to deliver results on the same scale as previously.

As the era of multi-party politics beckoned, the priorities of the political leadership shifted towards winning the election and retaining power, eroding the earlier scope for external influence over public policy. The strategy was developed after a two-year consultation process, and had three components. The first component dealt with improving internal communication within the ministry: strengthening procedures for decision making and promoting coherent messages around budget reforms.


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There was a lot of heated internal discussion on the need for government, especially the ministry, to be proactively transparent, collaborate with the media, and so on. The second component related to developing a more effective engagement with various stakeholders civil society organizations [CSOs], donors, members of parliament [MPs], media, etc. The ministry met with and trained MPs and CSOs, and spoke with the media to explain the budget process, how it worked, how to engage with it, and the fact that public resources ultimately belong to citizens.

Our budget formulation process was overhauled and made more open to include a series of consultation opportunities i. In addition, at the tabling of the budget proposal to parliament, the ministry produced simplified versions of the annual budget, and a newspaper pull-out with key facts about the budget.

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A third and final component focused on the extent to which budget information and documentation could be made more user friendly and understandable to a general public. The reforms included: a adding a glossary of key terms to all technical budget documents; b publishing simplified versions of national policies, the annual budget, and the budgeting process in several local languages; and c publishing budget releases on a quarterly basis in the local print media.

These reforms generated a shared understanding of the benefits of budget transparency and communication, which underpinned improved internal communication and coherence within the ministry, as well as more effective communication and engagement with other stakeholders. Simplified versions of budget documents became very popular and instrumental in enhancing the interest and engagement of citizens, CSOs, and MPs in the budget process. The practice was quickly adopted by sector ministries, who produced simplified versions of their sector policy and investment programs that further enhanced the transparency of public funds.

The number of CSOs getting involved in budget policy discussions also increased. Enhancing budget transparency, however, proved to be an expensive venture. Overtime, it was not possible to sustain all the citizen engagement activities, some of which were originally supported by the World Bank and other donors. The political commitment for transparency has also somewhat dwindled over time. What were the key factors that shaped government incentives in adopting and sustaining these fiscal openness reforms?

The main driver behind the reforms was high-level political commitment to poverty reduction, and to the key role of effectively using public resources for that purpose.

A Poverty Eradication Action Plan PEAP was formulated and launched in to guide budget allocation and implementation, increasing funding for priority sectors that could have an impact on poverty.