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Q2 Bmau Report 2014-15

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Q2 Bmau Report 2014-15 THE REPUBLIC OF UGANDA Semi-Annual Budget Monitoring Report Financial Year 2014/15 Industrialisation Sector April 2015 Ministry of Finance, Planning and Economic Development P.O.Box 8147 Kampala www.finance.go.ug TABLE OF CONTENTS ABBREVIATIONS AND ACRONYMS ............................................................................................1 FOREWORD....................................................................................................................................2 EXECUTIVE SUMMARY ......................................................................................................................... 3 CHAPTER 1: BACKGROUND .............................................................................................................6 CHAPTER 2: METHODOLOGY ...........................................................................................................7 2.1 Process ................................................................................................................................................ 7 2.2 Methodology ....................................................................................................................................... 7 2.3 Limitations of the report ..................................................................................................................... 8 2.4 Assessment Criteria............................................................................................................................. 8 CHAPTER 10: INDUSTRIALISATION ............................................................................................... 10 10.1 Introduction .................................................................................................................................... 10 10.2: Ministry of Finance, Planning and Economic Development (Vote 008) ........................................ 11 10.2.1: United States African Development Foundation (USADF): Project 1003 ................................... 11 10.2.2: Presidential Initiative on Banana Industrial Development (Project 0978) ................................. 34 10.2.3 Uganda Investment Authority ..................................................................................................... 39 10.3: Ministry of Trade, Industry and Cooperatives ............................................................................... 50 10.3.1: District Commercial Services Support Project: Project 1246 ...................................................... 50 10.3.2: One Village One Product ............................................................................................................. 62 10.4 Uganda Development Corporation ................................................................................................. 68 10.4.1 Soroti Fruit Factory ...................................................................................................................... 68 10.4.2 Luweero Fruit Factory .................................................................................................................. 71 10.4.3 Kalangala Infrastructure Services Project .................................................................................... 72 GENERAL CONCLUSION ................................................................................................................ 79 RECOMMENDATIONS ....................................................................................................................... 79 REFERENCES .................................................................................................................................... 80 i ABBREVIATIONS AND ACRONYMS DDA Dairy Development Agency DICOSS District Commercial Services Support Project EDI Enterprise Development Investment EEI Enterprise Expansion Investment FY Financial Year GoU Government of Uganda IFMS Intergrated Financial Management System KIBP Kampala Industrial and Business Park- Namanve KIS Kalangala Infrastructure Services KTC Kalangala Town Council MAAIF Ministry of Agriculture Animal Industry and Fisheries MFPED Ministry of Finance, Planning and Economic Development MoPs Ministry of Public Service MoTIC Ministry of Trade, Industry and Cooperatives MoU Memorandum of Understanding NEMA National Environment Management Authority OVOP One Village One Product PIBID Presidential Initiative on Banana Industrial Development UDC Uganda Development Corporation UDET Uganda Development Trust Ug shs Uganda Shillings UIA Uganda Investment Authority UNBS Uganda National Bureau of Standards USADF United States African Development Foundation US $ United States Dollars VAT Value Added Tax 1 FOREWORD The government has increasingly channeled resources into implementation of public programmes aimed at enhanced service delivery. Effective implementation of these programmes is critical and this calls for monitoring and evaluation. The Budget Monitoring and Accountability Unit in the Ministry of Finance, Planning and Economic Development makes semi-annual performance assessments on the progress of implementation for selected programmes. This report reviews the half year performance in the priority areas of: Agriculture, Education, Energy, Health, ICT, Industralization, Public Sector Management, Roads, and Water and Environment for FY 2014/15. The findings therein should inform implementation decisions in the last half of the year. I urge all institutions to follow up on the related implementation issues that have been identified. The implementation challenges and recommendations made will guide the relevant sectors to ensure enhanced effectiveness of programme implementation. 2 EXECUTIVE SUMMARY BACKGROUND The overall report reviews selected key vote functions and programmes within the sectors, based on approved plans and significance of budget allocations to the votes. The focus is on nine sectors, including: agriculture, education, energy, health, industrialization, ICT, public sector management, roads; and water and environment. Attention is on large expenditure programmes with preference given to development expenditures, except in the cases of education, health, ICT, public sector management and roads where some recurrent costs are tracked. Projects selected for monitoring were based on regional sampling, level of capital investment, planned quarterly output, and value of releases by the second quarter of FY 2014/15. The methodology adopted for monitoring included literature review of quarterly progress and performance reports; interviews with the respective responsible officers or representatives of programmes; and observations at site. FINDINGS Introduction Industrialization Sector Under the Ministry of Finance, Planning and Economic Development (MFPED), the following projects were assessed: United States African Development Fundation (USADF), Presidential Initiative on Banana Industrial Development (PIBID), Value Addition Tea-Buhweju Tea Factory, and Development of Industrial Parks. The projects of: One Village One Product (OVOP), District Commercial Services Support (DICOSS), were monitored under the Ministry of Trade, Industry and Cooperatives (MoTIC), while three projects namely: Soroti Fruit Factory, Value Addition- Luweero Fruit Drying and Kalangala Infrastructure Services were monitored under Uganda Development Corporation. Physical performance The Overall sector performance was rated at 62% which was good. While some projects registered progress on their respective targets and project objectives for example USADF, DICOSS and UDC, projects such as OVOP, PIBID and UIA were faced with challenges such as; lack of extensive needs assessments for beneficiaries, delay in procurement processes and lack of business plans which affected implementation. United States African Development Fundation (USADF): In all the projects sampled, key outputs such as construction of stores, acquisition of equipment were either completed or substantially complete (80%). The estimated physical progress across all projects monitored was 70%. Presidential Initiative on Banana Industrial Development (PIBID): The water works and construction of the banana processing factory were substantially complete (90%). However, formation of community processing units in the districts of Rubirizi, Shema and Mitooma did not take off. 3 Value Addition Tea: The key deliverables under this project for FY2014/15 were erection of a 1Km fence around the factory site and rehabilitation/replacement of the factory floor. Materials for erecting the fence had been delivered and preparatory works (digging of pole holes) was in progress.The new designs for floor works had been approved and the contractor was awaiting approval of works schedule to commence. The physical progress was estimated at 10%. Development of Industrial Parks: Overall performance of the project was below average. Routine maintenance under the already operational parks was ongoing. Works included; opening of new roads and maintaining existing road networks in Bweyogerere, Luzira, KIBP-Namanve and Soroti, and installation of boarder markers and signage for Karamoja Industrial and Business Park. One Village One Product: Overall performance was below average at 25%. From the enterprises sampled, only Eco-friendly Innovations was effectively utilizing the received equipment. Bulamogi Community Development Foundation, Lagoro Shea Nut group, and Nyakigufu Fruit Driers were not using the equipment due to lack of equipment shelter, lack of raw materials and defective delivery
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