Report No. 5322-UG Uganda Reporton Urban Financeand Management Public Disclosure Authorized
September6, 1985 Water Supply and Urban Development Division Eastern and SouthernAfrica Projects Department FOR OFFICIALUSE ONLY Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of the World Bank
This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosedwithout World Bank authorization. Currency Equivalents (1983)
Currency Unit: Uganda Shilling (USh)
I USh US$ 0.003
310 UShs US$ 1.00
Weights and Measures
All weights and measures are metric. Abbreviations used include:
ha hectare km kilometer sq km square kilometer
Abbreviations and Acronyms
CDC Commonwealth Development Corporation DAPCB Departed Asians' Property Custodian Board DC District Commissioner EC European Community HFCU Housing Finance Company of Uganda IPA Institute of Public Administration KCC Kampala City Council LALF Local Authorities Loan Fund MHUD Ministry of Housing and Urban Development MLG Ministry of Local Government .-ow Ministry of Works MPED Ministry of Planning and Economic Development NHCC National Housing and Construction Corporation NWSC National Water and Sewerage Corporation RDC Reconstruction and Development Corporation UEB Uganda Electricity Board ULC Uganda Land Commission
Fiscal Year
Government: July 1 - June 30 FOR OFFICIALU ONLY
UGANDA
REPORT ON URBAN FINANCE AND MANAGEMENT
Table of Contents
Page
Introduction and Summary of Recommendations ...... i
CHAPTER I: THE URBAN POLICY FR.AHEWORK...... 1
A. Urbanization Policy and the Recovery Program ...... 1
B. Public Control of Urbanization: Major Themes ...... 2
1. How Much Control? ...... 2 2. Who Should Control? ...... 3 3. Resource Generation and Cost Recovery ...... 4
C. Implications for Urban Strategies ...... 5
D. Structure of the Report 5
CHAPTER II: THE FINANCING OF URBAN SERVICES ...... 7
A. Revenue Structures and the Financing of Municipal Investments ...... - ...... 7
1. Structure of Revenues and Collections ...... 7 2. Sources of Financing for Urban Services ...... 8
B. Major Issues ...... 9
1. Local Revenues and Expenditures ...... 10 2. Financial Managementand Control ...... 13 3. HousingFinance ...... 17
This report is based on the findings of a mission which visited Uganda in November 1983. Mission members were 0. Grimes and F. Johnson (Eastern and Southern Africa Water Supply and Urban Development Division) and A. Kennefick and V. Newcombe (consultants). The participation of Mr. Newcombe and of his associate C. Ruben was arranged by the UN Centre for Human Settlements (UNCHS), Nairobi.
This document has a restricted distribution and may be used by recipients only in the perforrnance of their oflicialduties. Its contents may not otherwise be disclosed without World Bank authorization. Page
CHAPTER III: THE MANAGEMENT OF URBAN SERVICES ...... 19
A. Strengthening Urban Management: Major Issues ...... 19
1. Organization o...... 0 ...... 19 2. Regulations and Standards ...... 23 3. Capacity ...... 25
B. Strengthening Urban Management: Implementation ...... o...26
1. Municipal Services . *********...... see&. 27 2. Land ...... 29 3. Housing ...... 31
CHAPTERIV: RECOMMENDATIONS FOR IMPLEMENTATION ...... 34
A. ImmediateAction Program ...... 34
1. Local Government FinancialManagement ...... 35 2. MaintenanceEquipment ...... 39 3. Training ...... e... 39 4. Regulations ...... - -.-...... -- ...... 39 5. SmallScale Brick Producers ...... 41
B. Medium-Term Measures ...... 41
1. Local Government Financial Management ...... 41 2. Local Government Administration ...... 42
4. Landand Housing...... 43
ANNEXES
Annex 1: Urban Population Trends ...... 45
Annex 2: An Estimate of Income Distributions for Urban Areas ... 47
Annex 3: Revenue and Expenditure, Jinja Municipal Council, 1981-1984 ...... 50
Annex 4: Revenue and Expenditure, Entebbe Town Council, 1981-1984 ...... 51
Annex 5: Housing Finance Company of Uganda: History and Current Condition ...... 52
Annex 6: Summary of Urban Housing and Environmental Conditions, 1981 .... 56
Annex 7: Urban Management Training Requirements and Institutions .57
Annex 8: Selected Source List of Reports and Papers ...... 64 Page
CHARTS
Kampala City Council: Functional Organization ...... 66 Jinja Municipal Council: Functional Organization ...... 67 Entebbe Town Council: Functional Organization ...... 68
MAPS IBRD No. 18521: Uganda: Major Cities and Towns
IBRD No. 18534: City of Kampala Introduction and Summary of Recommendations
Purpose of the Report
a. For the foreseeable future, Uganda's macroeconomic strategy will continue to emphasize rehabilitation of the productive and foreign exchange-earning sectors. There can be little scope for meeting investment needs in non-priority sectors, either in the original Recovery Program (1982-84) or in the revised 1983-85 Program. The emphasis on direct production is clearly necessary until the restoration of the economy is further advanced.
b. Awareness in the Government is growing, however, that the goals of the Recovery Program become jeopardized by breakdowns in essential support services such as water supply, road maintenance, and communications. Reliable supplies of water and electricity are critical aspects of the rehabilitation of key industries and the greater use of all industrial capacity. The maintenance of such infrastructure networks, once rehabilitated, is an equally critical element of economic recovery that reduces the need for future investments in infrastructure capacity. Since these services are typically provided in cities and towns, the attainment of Recovery Program objectives is linked to the effectiveness with which urban services are managed and financed. c. Better-managed cities can contribute to the recovery process by taking on financial and service burdens that the national budget is not able to assume. Since urban service improvements generally confer specific benefits on urban residents, there is a strong case for the cost of these improvements to be met from local rather than national resources. This in turn implies that local government authorities as well as urban residents themselves will have to bear a much greater share of the financing of such investments than at any time in the past. d. The purpose of this report is to suggest feasible ways of improving local government administration and finance. It proposes measures to strengthen the local revenue base so that urban authorities will become less dependent on transfers from the central government. It also suggests several means of building a more harmonious relationship between central and local governments, lessening the tensions that are now evident. Finally, it examines the effects such improvements would have on the provision of essential urban services, land and housing.
Approach and Content e. Because the main focus is on urban administration, management, and finance, the report does not attempt comprehensive coverage of urbanization trends. It does not formulate or systematically review an urban investment program, for two reasons. First, although physical -ii- investment needs are huge, the Recovery Program priorities suggest that large-scale investments of this kind should be deferred unless they can be shown to be fully in line with Program objectives. Second, even if it were decided to launch such investments now, most financial control and management procedures at both central and local levels are not yet up to the task. Hence, the lower priority now given to urban-related investments allows some time to correct the most serious deficiencies in urban finance and management, as a prerequisite to starting any major investments afterward. f. As the Recovery Program moves forward, local authorities will have increased revenue requirements to maintain existing and newly developed facilities. The local councils will also have to move toward greater financial self-sufficiency, depending less on block grants from the central government. In municipal and town councils the Graduated Tax, which is their main revenue source, will have to be greatly supplemented by other revenue sources. Among the most promising of these sources is market stall fees, which appear to be substantially below levels that demand would allow. The effectiveness of the present budgeting process for local authorities will also need improvement through training and staff development at both the council and central government levels. Particular attention will have to be given to budgeting and setting aside funds for capital loan repayments and for extensive maintenance programs. This will have to be done under the necessary conditions of rising salary costs and ongoing effortsto increasecouncil revenues. g. Clarification,and in some cases redefinition,of the lines of responsibility between central and local authoritiesis criticalfor the managementof urban servicesto becomemore effective. It is suggested that written regulationsbe put into effect to formalizeinformal procedures that are already in place, as well as to codify new working relationships that reserve key roles for both councils and central governmentagencies in the provisionof servicessuch as water and town planning. The report also recommendsthat a study be launchedto clarify the functionsof local and centralauthorities in the managementof Kampala. h. Prioritiesfor the trainingof staff for urban managementneed to be related to the most pressing Recovery Program objectives. Expatriate help would be beneficial in this respect,especially so in the areas of municipal finance and financial control. The key institution for this type of training is the Institute of Public Administration, whose staff need strengthening by expatriate teachers. The report recommends that new courses in quantity surveying and in teaching methods be offered at Uganda Technical College and at the National Teachers College respectively. It encourages greater support for the Survey Training School, and proposes strengthened programs of training for the Ministry of Housing and Urban Developmentand the Ministry of Local Government. -iii-
Summaryof Recommendations i. The most urgent measures for improving urban finance and management constitutean ImmediateAction Program. mhese measures include:
a. Technical assistance, equipment, and materialsfor strengthening financialmanagement in Kampala, Jinja, and Entebbemunicipalities as well as other towns, and for improvingthe effectivenessof the Ministry of Local Government(ref. paras. 2.10-2.38)
b. Provisionof equipmentand vehicles for Kampala City Councilfor adequate maintenanceof roads; and tools, equipment,and buildingsfor Kampalaand Jinja to rehabilitatevehicle maintenancefacilities (para. 3.18)
c. Written clarificationof central and local government responsibilitiesand the roles of centralauthorities in the managementof Kampala. For water supply/sewerageand town planning,redefinition of presentarrangements to ensure an effectiverole for councils (paras. 3.4-3.10) d. Technicalassistance, materials, and teachertraining to strengthentraining capabilities at the Instituteof Public Administration,Uganda TechnicalCollege, National Teachers College,and the Survey Training School (paras. 3.20-3.23)
e. Measures to simplify the regulationsgoverning land servicingand house construction(paras. 3.14-3.16,3.34)
f. Encouragementof small and medium-scalebrick producers (paras. 3.45-3.46). j. To build on the improvementsresulting from the short-term action program,several criticalmeasures need to be carriedout over the medium term. This medium-termprogram consistsof the followingactions:
a. Local governmentfinancial management
- improvedrevenue collectionsystems at Kampala,Jinja, and Entebbecouncils (paras. 2.24-2.30)
- program for identifyingand recordingbusinesses for licensing purposes (paras. 2.24-2.30)
- planningand initiationof a comprehensiveproperty rate administrationprogram (paras.2.28-2.29)
- assessmentof capacityfor capitalinvestment through preparationof revenueforcasts and cash flow projections(paras. 2.15, 2.19, 2.21) 2.9)
- implementationof a strategyfor increasingpublic depositsand mortgage lendingcapacity at the Housing Finance Companyof Uganda (para. 2.39-2.42)
b. Local governmentadministration
- creationof a TrafficManagement and TransportPlanninkg -iv- Sectionwithin the Kampala City Engineer'sDepartment (para.3.3)
- review and implementationof proposalsto legalize selectedillegal markets (para.3.30)
- assessmentof the feasibilityof more privatesector participationin solid waste management,especially in the centralareas of Kampala (para.3.29)
c. Training
- Establishmentof a two-yearhigher diploma coursein SettlementDevelopment at UgandaTechnical College (para.4.21)
- Creationof a one-yearpost-graduate course in Regional Developmentat MakerereUniversity (para. 4.22)
- Expansionof facilitiesto increasethe output of artisansin the buildingtrades (paras. 3.45-3.46).
d. Land and Housing
- Issuanceof a policy statementon civil servanthousing that would clarify the prospects for an overall reductionin housing subsidies and for moving to a system of housing allowances(paras. 3.41-3.42)
- Researchon the cost of local buildingmaterials and their implicationsfor maintenance(paras. 3.44-3.46)
- Preparation of an "Area Development Plan' for the Namuwongo/Wabigalo/Kisugu districts of Kampala (para. 3.43)
- Preparationof a restructuringplan for the National Housingand ConstructionCorporation (para. 3.41)
- Proposalsfor ensuring the timely developmentof "mailo" land to accommodatethe expansionof built-upareas in the Kampala region (paras.3.37-3.38). k. The measures listedabove consititutea set of priority actions in urban management and finance in support of Recovery Program objectives. It is recommended that the Ministry of Planning and Economic Development (MPED), together with the Ministry of Housing and Urban Development (MEUD), the Ministry of Local Government (MLG), and the Kampala, Jinja, and Entebbe councils, take the lead in establishing an agenda for rapid implementation based on these measures. MPEDis also well placed to secure Government approval of the priority measures and to seek financial help from outsidedonors. However,MHUD and the councils should also move forwardwith their availableresources on the recommendations directly concerningthem. UGANDA
REPORTON URBANFINANCE AND MANAGEMENT
CHAPTERI: THE URBANPOLICY FRAMEWORK
A. Urbanization Policy and the Recovery Program
1.1 Since civilian government was restored in 1979, Uganda's decimated physical and human resources have had to be devoted to restoring internal security and reviving the foreign exchange-earning sectors. Restoration of productive capacity in agriculture and other activities, promotion of exports, and greater fiscal discipline have necessarily been the main focus, of both the original Recovery Program (1982-84) and the revised Program issued in September 1983. Rehabilitation of housing and basic infrastructure could receive little attention. This conscious decision not to deal systematically with problems of city management and services until later also extended--justifiably-to the institutional and policy framework. Before local government policies and procedures could be made more effective, work procedures, salaries, and morale in national ministries and agencies had to be restored.
1.2 Awareness is growing, however, that postponement of the most urgent reforms in the way services in cities are provided and managed can prevent the goals of the Recovery Program from being reached. In the current Recovery Program social infrastructure comprises 20% of total investment planned for 1982-1985, compared with 15% in the original Program. Several major projects in the urban sector are underway or planned. These include the rehabilitation of Kampala City roads, financed by EC; the rehabilitation of war-damaged towns of Masaka, Mbarara, and Arua by the Reconstruction and Development Corporation (RDC); the rehabilitation of water supply systems in Kampala and in 6 other major towns; and urban water supply schemes for several secondary towns. It is increasingly realized that to strengthen the capacity of central but not local authorities to undertake these investments is to leave resources that are critically needed for economic recovery unproductive and unused. Well-managed cities contribute to recovery by meeting costs and taking on burdens that national agencies for the foreseeable future cannot be expected to assume. To achieve greater management effectiveness as well as lower costs of services, the central and local authorities which jointly manage these cities must pull together.
1.3 There is equal awareness that these concerns are immediate and practical. As shown in Table I below, the urban population grew at an explosive rate during the 1960s and even during the Amin years grew faster than the national average of 2.8%:
Table 1 Urban Population, 1959-1980 Urban Growth Rate Census Population (million) since previous Year Total Urbar % Urban Census year
1959 6.5 0.3 4.8 - 1969 9.5 0.7 7.8 9.0 1980 12.6 1.1 8.7 4.0
Source: Ministry of Planning and Economic Development - 2 -
Urban growth since 1980 has probably averaged about 5%, still .ess than the combined rate of the last two decades. If internal security continuesto improve,migration to the cities and towns can be expected to intensify. Even at 5%, however,the urban populationwill doublein 15 years, and Kampalawill have a populatlonof 1 million by the end of the century.
1.4 Large investmentsare being conceivedand programmedfor rehabilitationof the war-damagedtowns of Masaka,Mbarara, and Arua; for reconstructionof decrepitinfrastructure; and to meet housingbacklogs. The first significantimprovements in urban servicesin over a decade, in road rehabilitationfor Kampalaand in water supplyand sanitationfor seven towns, are being launched. As is widely acknowledged,however, the financialcontrol and managementprocedures required to make these investmentsfully productivenow must often be re-learned,when not reinvented. The fact that so little is working well at thp local level actuallyprovides a good opportunityto look criticallynot only at the procedures themselves, but at the philosophy they reflect and the assumptions, often implicit,underlying them. The basic idea of this report is that through such a criticalassessment, strategies for improved urban financeand administrationcan be devisedand implementedin support of the goals of the Recovery Program.
B.* bli,cManagement of Urbanization:Major Themes
How Much Control?
1.5 Uganda shares with all urbanizingcountries the issue of how much governmentcontrol over the urbanizationprocess is desirable. Generally speaking,urban policies in Uganda over the past two decadeshave favored more rather than less public involvement. Local authoritiesand the NationalHousing and ConstructionCorporation (NHCC) have been given primaryresponsibility for puttingup housing to meet the demandsof urban families. Buildingand land use regulationsset out in detailwhat is a legitimateconstruction technique and materialand what is not. "Acceptable'(Grade I) constructionis distinguishedfrom 'temporarily acceptable"(Grade II) construction,and city and town councilstake steps to hasten the conversionfrom Grade II to Grade I. Town plans include detaileddescriptions of land uses and investmentrequirements for public infrastructure,which are reflectedin Zoning Plans with the force of law.
1.6 It should be recognizedthat this relativelyactive role of governmentis partlyunintended. Before the expulsionof Asians in 1972, the KampalaCity Council (KCC) used privatecontractors, most of whom were Asians, to carry out its road maintenanceand rehabilitationoperations. With the collapseof this part of the constructionsector since 1972, what little maintenancecould be done has had to be performeddirectly by KCC throughforce account. Nevertheless,the prevailingtrend has been to seek solutionsto problemsof urban managementthrough publicly financed and implementedprograms. -3-
1.7 To be consistent with the Recovery Program, howeve.-,such solutions will require that government be a facilitatorof private initiative much more frequently than an active participant. This sort of re-examinationis already underway. As one example, discussions on future housing policies have emphasized the need to steer away from large-scale public construction toward more active private involvement in housing. The specific measures discussed include rehabilitationof the existing stock and the possibility of cash allowances for civil servants to find their own housing on the private market. This report argues that such measures move in the right direction, but should also be applied to building and land use standards, investment programming,and the regulatory environment.
Who Should Control?
1.8 Public responsibility for urban programs, whatever is decided about how far this responsihility should extend, is shared between central and local governments. Historically in Uganda, the powers of local authorities have been defined in quite different ways ranging from a great deal of local sovereignty to very little. Before the Protectorate introduced standard systems and procedures over the whole territory of Uganda, local management of local affairs was virtually absolute. A critical concern of all governments since independence has been to find the right balance between local autonomy and central control, a process which is still far from complete.
1.9 Uganda has a local administrationeverywhere in the country and local governments in the largest cities and towns. This distinction between local administration and local government is of central importance. The basic unit of local administration in Uganda is the district, headed by the District Commissioner (DC). Whether for a well, a market, or police protection, residents of the district traditionally turn to the DC to get things done. Onto chis system has been, in a sense, grafted a structure of city, municipal,and town councils each consisting of a Council, a Mayor, Town Clerk, and town engineers, treasurers,medical officers, and other officials.l/ In law, the prerogativesand duties of councils are for the most part clearly defined. In practice, however, two key factors have combined to blur lines of responsibility,giving inconsistentand often conflicting signals about the pace at which the national government is allowing real autonomy and accountabilityto devolve upon local governments. First, financially the councils have been living a hand to mouth existence, unable to realize significant tax revenues from the economic base of the towns. Second, the mandate of the most important council (Kampala) is to a large extent duplicated by the responsiblilities that continue to be exercised since 1974 by the Kampala DC, whose geographical territory is identical to that of the KCC. Strategies for dealing with these two issues are presented in later chapters of the report.
1/ Town Boards, in the smallest urban centers, are one rung below the Town Councils in importance. They are not designated as -self-accounting," (i.e., with autonomous responsibilities),and so will not be a major focus of this report. Moreover, the term "councils'or "council governments- refers to the entire city or town government, not just to the members of the deliberativebody. -4-
1.10 The position taken in this report is that no major changes in the structure of central and local government responsibilities are necessary for the appropriate balance between central control and local autonomy to be struck. On paper, local governments have more powers ani duties than they have been able to exercise. In most cases the strategies recommended in the report involve enabling local governments to do what they are already legally empowered to do, within accepted limits set out by the central government. In other cases, described more fully in Chapter III, a clarification or redefinition of the boundary between central and local responsibility would make both levels of government more effective.
Resource Generation and Cost Recovery
1.11 As the Recovery Program is carried out, councils in their efforts to improve their financial performance will have to ensure that planned investments remain within the limits of resource availability and that costs are recovered from those who benefit. At the same time as revenue requirements for new projects and for maintenance of existing facilities will increase, councils will have to move further toward financial self-sufficiency, depending less on block grants from the central government.
1.12 Part of this process will involve a reconsideration of pricing policies for publicly provided services, so that the prices paid more closely reflect the economic cost of providing the service. Land and housing are the two most important commodities in urban areas being acquired at prices essentially unrelated to their production cost. Government officials are well aware that public housing is rented at a fraction of the rents that are obtained on the private market, and that land leasehold rents as well as customary (-kibanja-) land rents often lie below market-clearing values. But they see no alternative if such goods and services are to be affordable. One way of resolving this service pricing dilemma is to question whether the service should be provided publicly at all, as is already being debated in the case of housing built by NHCC and KCC. Another, explored in greater detail in Chapter III, is to ensure that regulations governing service provision are flexible enough to allow for a range of acceptable alternatives rather than only one or two.
1.13 The need for more effective mechanisms of cost recovery arises not only from budget stringencies at the national and local levels, but from the nature of urban investments themselves. Such investments, especially improved water, drainage, and transport networks, play a role beyond the city boundaries in the support they give to productive activities elsewhere in the economy. However, they also confer specific beneflitson urban residents, particularly owners of the land or housing whose value has been increased by the investments. As a result, there is a strong case for these residents, rather than all taxpayers in the country, paying most or all of the cost of providing the service. -5-
1.14 For city and town councils, achieving cost recovery objectives will require much improved performance in all revenue categories, with the rate tax on real property being especially critical as the major source of council revenue. This in turn requires improvements in procedures for real property valuation, records management, and assessments as well as collectious. It also implies that urban services will be governed by the same pricing and cost recovery features whether they are managed by local authorities or by national ministries.
C. Implications for Urban Strategies
1.15 Much attention has been devoted at the technical level since 1979 to the question of how to improve the functioning of towns and town governments, even though the decision makers have not given this question high priority. Statements of policy direction have been prepared in housing and solid waste management, and policy alternatives in most other fields of urban investment have been intensively discussed. This has produced wide recognition of the range of policies that could be applied, and also of policy instruments that have been successfully applied elsewhere. What is lacking is a sense of priorities.
1.16 For this reason the report focuses primarily on what should be done first. It does not argue that a comprehensive strategy should be put in place immediately to deal with all problems of urban growth, finance, and administration. Long descriptions of deficiencies in equipment, staffing, or transport will not be found in the report. Such deficiencies have been well documented by the public agencies themselves (see Annex 8, No. 10). Moreover, the object is not to encourage an attempt to return to a golden age- when equipment was more ple-ntiful. The report neither accepts the present nor proposes a reiurn to the past. Instead it builds on the discussions now underway to offer suggestions on how the capacity of both central and local governments to manage the urban economy can be improved. Some measures are especially urgent, and constitute an Immediate Action Program. Others may be dealt with more gradually, and comprise recommendations for the improvement of urban management and productivity over the medium term.
1.17 Because good intergovernmental relations are critical to the success of any urban strategy, the institutional framerork proposed involves a sharing of central and local responsibility for almost all urban investments. To anticipate one example discussed in Chapter III, urban water supply was the responsibility of city and town councils prior to 1972, and has been with the National Water And Sewerage Corporation (NWSC) since then. The report maintains that a redefinition of responsibilities which reserves roles for both the councils and NWSCwill have a higher payoff in effective and appropriate water supplies than if full responsibility were given to either alone.
D. Structure of the Report
1.18 Major constraints on the financing of urban services and housing are described in Chapter II. The main issues are presented, together with -6-
suggestions for a strategy to improve local government finance. In a similar manner, Chapter III presents the principal issues of organization, procedures, and capacity facing urban authorities in the provision of serviced land and housing and the maintenance of existing facilities. Training needs for tecbnicians and managers are presented and an assessment made of the capacity of local training institutions to respond. Finally, the elements of the recommended strategy, both imediate and medium-term, are describedin detail in ChapterIV. - 7 -
CHAPTER II: TEE FINANCING OF URBANSERVIC(S
A. Revenue Structures and the Ftnancing of Municipal Investuents
2.1 Local governments in Uganda are divided into urban authorities and town boards. Urban authorities are generally self accounting", in that financially they are supposed to be self-sufficient and operate with their own budgets. Urban authorities comprise one city council (Kampala), nine municipal councils, and thirty town councils, ten of which are self-accounting. These council distinctions tend to reflect differences in council size, financial resources, and need for central budget support. There are sixteen town boards, which administer very small towns financed by the central government through an "administrative center' structure. _
Structure of Revenues and Collections
2.2 Local government revenues are derived from the following sources, and are credited to a general municipal fund:
Local Taxation
a. Property taxes (referred to as property rates or assessment rates) b. Graduated local income tax payments by individuals (referred to as the Graduated Personal Tax, GPT, or more commonly, the Graduated Tax).
Fees, Charges, and Other Local Receipts
c. Licenses, permits, fees and fines d. Rents from land leased out by councils e. Public market rents and dues f. Interest on investments g. Gifts
Gr.mats
h. Block grants from the central government.
2.3 Urban authority revenues are viewed in three categories for planning and budgeting purposes: regular cash receipts; balancing revenues; and re-charged or recovered costs. The first two categories usually constitute almost all of a council's revenues. Regular cash receipts are the fixed statutory revenues over which a council has little control, and which do not vary appreciably. The Graduated Tax, license fees and market rents are the principal regular cash receipts. For planning purposes these receipts establish a basic working balance for a
1/ The basic legal framework for the financial management of city, municipal, and town councils is set out in the Urban Authorities Act (1958), chapter 27. As used in this report, -urban authorities", -local authorities," and 'local governments- refer interchangeably to city, municipal, and town council administrations. - 8 -
fiscal year. Property rates and central government block grants, on the other hand, are not related to any specific service and hence are regarded as "balancing- revenues. That is, they are subject to variation by a council or the central government to meet the overall annual budget requirements of a council. Municipal budgets are supposed to be prepared at the council level, for review and approval by the Ministry of Local Government (MLG), to ensure that the budgets are reasonable and that local and national priorities are consistent. In practice, however budget preparation and review procedures are in disorder.
2.4 The large majority of local revenues have traditionally come from the property rate, tne Graduated Tax and central government block grants. The significance of each of these revenue sources to individual councils has depended mainly on two factors. First, the size of the employed population within a council's boundaries affects the amount of Graduated Tax revenue. Second, the extent of infrastructure developxent affects the amount of the property rate revenue. Hence, the major beneficiaries of these two sources of local taxes have been Kampala City Council and the municipal councils of Jinja, Mbale and Masaka (in that approximate order). Also, the dependence on central government block grants to balance urban authority budgets has been highest with the town councils, followed by the municipal councils and then by.Kampala City Council.
2.5 Collection methods differ from one kind of tax to another, and depend partly on the population makeup of individual councils. Three basic approaches are used:
a. Taxpayers remit an assessed levy directly to a council office. This approach is most common for property rate payments, license fee payments, and Graduated Tax pay- ments by self-employed individuals. It assumes that tax- payers have reasonable access and transportation to the main cash office, or to field offices of a council. b. Graduated Tax deductions are recovered by employers from the wages of their workers, and are remitted monthly to council cash offices. c. In cases of delinquency or where taxpayers would have to travel long distances to a council cash office, council revenue collectors visit taxpayers to obtain direct payment.
Sources of Financing for Urban Services
2.6 Traditionally, the following sources of funds have been available to local governments to finance municipal investments:
a. Current revenues and general cash reserves - 9 - b. Renewals funds and receipts from the sale of depreciated assets c. Receipts from the sale of council land d. Grants from the central government e. Loans from the Local Authorities Loan Fund.
2.7 During the 1960s, the urban authorities usually realized annual operating surpluses which accumulated as general reserves. These reserves were used as a primary source of capital financing. Since their liquidity positions were generally good, the urban authorities also budgeted and financed some investments from current revenues. When the urban authorities could build general reserves, they also contributed to renewals funds. The resources in these funds were set aside as short-term invest- ments or as deposits in commercial banks. The proceeds were eventually used for acquiring new vehicles and equipment, for repair and maintenance of civil works, or for minor civil works construction. The balances of these renewals funds typically were supplemented by proceeds from the sale of assets such as vehicles which had become uneconomic to maintain.
2.8 Amounts collected from land sales made by the Ministry of Lands, Minerals and Water Resources on behalf of local authorities have been deposited in a statutory council fund called the "land premia" fund. This fund has been used for financing infrastructure for housing plots designated by councils.
2.9 Other sources of capital funds for local governments have been direct grants from the central government and low-interest loans from the Local Authorities Loan Fund. This fund has been managed by a Board appointed by MLG. In the past, urban authoritles also have received gifts of plant, machinery and equipment from foreign governments and international agencies.
B. Major Issues
2.10 Local government financial operations in the 1960s were generally sound, and the outlook for development was optimistic. However, through the 1970s to the present, political and economic events have interacted to cause a steep decline in the financial condition and management of the urban authorities. This decline has been so serious that the present situation has reached crisis proportions.
2.11 In 1971, with the establishment of the military regime, block grants from the central government were substantially reduced. Since the local authorities were dependent to various extents on these grants to generate operating surpluses, subsequent annual operating deficits became the norm. To cover these deficits, general reserves which had been built up in previous years were depleted. At the same time operating expenditures were rising at unprecedented rates, mainly due to extremely high domestic inflation.l As operating costs increased, land premia and renewals funds in the urban authorities were also drawn down to meet recurrent operating expenses. During the same period the Local Authorities
1/ One index of domestic prices rose to a level exceeding 9,800 in 1982, compared to a base of 100 in 1966; another rose to more than 13,000 during the same period. - 10 -
Loan Fund was not replenished, and central government grants for capital projects had ceased. Hence, by 1973 new municipal investments had stopped.
2.12 While costs were rising, local tax collections began to decline precipitously. Government ministries became delinquent in remitting the Graduated Tax deductions on behalf of their employees. Properties left by the Asians expelled in 1972 have been administered by the Departed Asians' Property Custodian Board (DAPCB). DAPCB is legally responsible for paying property rate taxes on the more than 4,000 properties it administers, but has not done so, partly because of massive arrears on rents owed it by government ministries. Increased tax evasion by the general public further aggravated the situation. The consequence of reduced revenues and rising costs (especially the wage bill, due to increased domestic inflation) was a serious deterioration in municipal facilities and services and an exodus of trained staff. The departure of financial staff, especially at managerial and supervisory levels, was critical for the local authorities.
Local Revenues and Expenditures
2.13 Issues arising from analysis of the finances of Kampala, Jinja, and Entebbe councils were considered to be representative of the financial problems facing all local authorities. Revenue and expenditure trends for these councils could be assessed to different extents because of the varying condition of their books and records. Kampala City Council has not posted its general ledger since 1977. Entebbe Town Council has kept its posting current, but has not prepared abstracts of accounts since 1979. Jinja Municipal Council, on the other hand, has maintained current books and abstracts, and has received an unqualified opinion from independent auditors on their 1982 financial statements. Given these conditions, the revenue and expenditure data obtained from Kampala were not as specific as those from Entebbe and Jinja, and could not be displayed in a comparable manner.
2.14 Kampala City Council (KCC). The disarray of the accounting records in Kampala became a major issue after the current Mayor took office in November 1982. The poor controls and records in the Council Treasurer's Office, as well as allegations of fraud and mismanagement, became topics of discussion in Parliament. In response, MLG appointed a Commission of Inquiry, and the Deputy City Treasurer and Chief Accountant of Kampala were put on "forced leave" in September 1983, pending the outcome of the investigation.
2.15 KCC is faced with trying to meet sharply increased salary and wage costs with limited revenue flexibility. The central government approved two salary increases in 1983 for public service staff, in reaction to the rapid rise in domestic inflation and the devaluation of the Uganda Shilling. The resulting increases in salary and wage costs to KCC will amount to some 80% in 1984 over 1983. In addition, - 11 -
general expenditures for other goods and services have increased sharply. The approximate trend in KCC expenditures is UShs 385 million in 1982, UShs 580 million in 1983, and UShs 940 million in 1984. The Council anticipates total revenue requirements of about UShs 1 billion to meet anticipated expenditures for 1984. This figure recognizes that block grants of about UShs 90 million will not cover the entire increase in salary costs, even though it reflects about a UShs 40 million increase over the amount received in 1983. Hence, the Council is planning increases of about 50% in market rentals, housing rentals, and taxi and bus park fees. Also, a recent revision in the schedule of graduated taxes should increase this revenue from UShs 100 million in 1983 to some UShs 300 million in 1984. The Council has also budgeted for about UShs 300 million of revenues from the property rate tax. However, this assumes 100% collection efficiency, when actual collections since before 1979 have been estimated at 10%. About half of the uncollected property rate tax is due from goverument agencies and corporations which habitually have been delinquent in their payments. The likely outcome is for KCC to run at least 25% below its revenue budget in 1984, as it probably has done over the past five years, resulting in minimal cash available for anything but salary and wage expenditures. As a result, until revenue collection efficiency can be increased and general price levels become stable, service delivery in the Council will continue to deteriorate, and new municipal investments will not be affordable.
2. 16 Jinja Municipal Council. In contrast to Kampala, Jinja has maintained reasonable control over its finances despite the national economic decline. It has kept its accounting records current and has had an independent audit of its Abstracts of Accounts at December 31, 1982. Revenue and expenditure trends for Jinja, from 1981 through 1984, are shown in Annex 3. Total revenue increased by an average of 83% in 1982 and 1983, reaching a current level of some UShs 160 million per annum. An additional increase of 50% has been forecast for 1984. While this increase appears substantial, it may be required simply to absorb the effect of price increases which have averaged 70% per year from 1977 through 1982.
2.17 More than 90% of the revenue increases in Jinja Council over the past two years have come from increases in service 'ncome, mainly from increases in property rentals and market fees. At the same time, annual increases in central government block grants have been needed to meet Council operating budgets. In 1983, service income was estimated at 64% of total revenues; block grants, 21%; the Graduated Tax, 11%; property rates, 2X; and licenses and other income, 2%. In 1984, the Council expects revenues to increase to UShs 246 million, resulting from an increased property rate levy, new Graduated Tax rates already announced by the central government, increased rents and fees (principally in markets), and an increase in block grants. These increases appear to be achievable, although the block grant amount could be less than expected because of national financial constraints.
2.18 Expenditure patterns tor Jinja have been fairly uniform over the past three years. Civil works programs have averaged 37% of total - 12 -
expenditures; administrative operations, 32%; public health programs, 22%; and education and other programs, 9%. In 1983, overall expenditures in these programs were distributed as follows:
Salaries and wages 44% Fuel and other transport costs 25% Administrative supplies and expenses 19% Building and road maintenance materials 7% Other 5%
2.19 Jinja Municipal Council's estimate for 1984 anticipates an operating surplus of some UShs 50 million (21% of total revenue), which is intended for capital outlays. This amounts to slightly more than the UShs 44 million forecast for block grant income. Effectively the Council can meet its operating fund requirements (at existing service levels) from locally generated revenues, but will need continued central government support to cover any new investment. Some elasticity exists in service revenues, particularly in market rents and fees, to further increase local revenues. However, if block grants continue at present or reduced levels, these service revenue increases will probably be needed to cover future salary and wage costs, or to increase municipal services to higher levels, and no additional funds will be available for capital investments.
2.20 Entebbe Town Council. The financial health of Entebbe Town Council has depended on central government block grants, which currently comprise about 55% of Entebbe's total revenue. Annex 4 shows estimated revenue and expenditure trends for Entebbe for 1981-83. The Council's total revenue approximately doubled from 1981 to 1983, to a level of some UShs 32 million per annum. About 57% of the increase was due to increased block grants, with the remainder coming from higher market rents and service fees. Operating expenditures during 1981-83 were proportionately increased to absorb the revenue increases. The Council has therefore depended on the block grants to meet recurrent operating costs, at low municipal service levels, with no reserves available for investment.
2.21 After the block grants, the Graduated Tax is the next significant revenue component, at about 24%, followed by service fees and market rents at 18%, and property rates at only 3%. In practice, about 80% of Entebbe's revenue base is determined by central government activity. Block grants are determined directly by the national authorities; about 95% of the assessed property in Entebbe is government-owned; and a large number of wage earners subject to the Graduated Tax are employed by the government in Entebbe or Kampala. The Council has identified an additional UShs 2 million in local taxes and fees which it can raise, but while such action is necessary, it will be much less than what is required to meet rising operating costs or capital investment needs. Mhe increase in the Graduated Tax by the central government should materially increase Entebbe's total revenue in 1984, but this increase probably will be absorbed by rising labor costs and a need to raise municipal service levels. Hence, in the foreseeable future the financial capacity of Entebbe will continue to be determined in large part by central government block grants. - 13 -
Financial Mbnagement and Control
2.22 The deteriorationof economicconditions in Ugandahas also been reflectedin financialadministration at the councils. For severalrevenue categoriesat both the national and local levels, amountscollected are much lower than amountsdue. Expenditurecontrol is poor, and financial planningand budgetinghas become largely unreliable.
2.23 Accounting Systems and Control. The basic organization of accounting functions and records at the councils is a continuation of that used in the early 1960's. In principle it is sound, reflectinggood separation of functions, adequate audit trails within the books and records,and provisionfor continuousinternal audits. In practice, however, systemsand proceduresare not uniform among councils,and their effectivenesshas been reducedby a number of underlyingproblems. These problems exist in each of the councils studied, but are most serious in Kampala and Entebbe. The principal problem is inadequately trained financial and accounting staff. The major consequence has been an inability to develop, document and supervise procedures for clerks who must rely completely on on-the-job training to be effective. In addition, the situation has been worsened by old and inoperative machines for posting records, and by a chronic lack of office supplies, including such basic items as paper stocks. Finally, since council staff have not been able to support their families on their salaries alone, absenteeism and low staff productivity have become significant contributory problems.
2.24 Revenue Collection and Arrears. Revenue collection in the councils is a general problem, with the severity and reasons for the problem varying for different types of revenue.
2.25 The Graduated Tax is the councils' most reliably collected levy. A collection rate of about 90% usually can be expected because of existing collection procedures and the traditional public view of the tax.1/ Most of this tax is deducted from employees' wages and remitted monthly by employers to council offices. The key control feature in the collections is a Graduated Tax Ticket which each working adult carries as a primary form of identification. When remittances are made to councils, this ticket is marked and returned to the worker. Traditionally, the paying of the Graduated Tax and holding of the tax ticket has been a symbol of coming of age in the community. This is also an incentive for self-employed persons to pay the tax.
2.26 Systems within the councils should be capable of efficiently receipting the Graduated Tax Tickets, controlling cash receipts, posting individual taxpayer records, and monitoring the records for delinquencies. In each of the councils visited the machines for receipting the tickets were old and had become unreliable or inoperative. The control of cash
I/ The stated collection rates are for taxes collected in the year they are billed. No major additions to receipts are realized from collections in later years. - 14 -
receipts, when payments are made at the main council offices, is adequate. The conditionand maintenanceof taxpayerrecords, however, varies among the councils. Jinja'srecords are well managed: The Jinja Counciluses a manual systemof recordsfrom which an individualrecord can be easily retrievedusing either a permanenttaxpayer number or the taxpayer'sname. The records at Kampalaand Entebbeare not as well organizedand managed, with those of Kampalabeing in a serious state of disarray. 2.27 Entebbeand Kampalahave an additionalproblem with their Graduated Tax administration. Taxpayers are supposed to pay the Graduated Tax to their council of residence, rather than to their council of employment. A large number of government employees work in either Entebbe or Kampala, but live in the other council. In practice, the taxes deducted by the employers are simply remitted to the council where the employer is located. To a large extent the differencescancel out, but Entebbe probablyloses some revenuesfrom this practice.
2.28 Collectionof propertyrates is a major problemin Kampala City Council and the municipalcouncils. In the town councilsthe propertyrate is not a major income source,and the associatedrecordkeeping and collections are not complex. Entebbe Town Council, for example, has only about 600 propertyrate records,and has achieved a collection efficiency of about 85%. The arrears are mainlywith governmentagencies, who own about 95% of the ratable propertyin Entebbe. However.collection efficiencyfor propertyrates is only about 10% in Kampala,and about 50% in Jinja. In contrastto Entebbe, Kampalahas about 50,000 propertyrate records to manage. In general, the poor collectionperformances at Kampala and Jinja can be attributedto personneland systemsthat are not equipped to effectivelyadminister the propertyrate program. Personnelhave inadequate training; recordkeeping systems are not well designed, up to date, or well managed; and basic transportation for necessary field work is lacking. Also, agents following up delinquencies and collections in the field run the risk of physical harm.
2.29 In Kampala, private property owners and government agencies each account for about half the shortfall in property rate collections. Collection problems among private owners are traceabledirectly to poor recordkeeping and administration at the KCC. Owners may also be withholding payments because municipal services are poor. Turning to the other half of the shortfaLl, arrears to KCC from government entities in September 1983 amounted to some UShs 245 million. About 80Z of this amount was owed by only four agencies: the Departed Asians' Property Custodian Board (UShs 79 million); the Uganda Land Commission (UShs 44 million); the National Housing and Construction Corporation (UShs 37 million); and the National Water and Sewerage Corporation(UShs 35 million).
2.30 Collectionof other councilrevenues such as rents and fees is hampered by poor recordsand weak systemsand procedures. The collections are especiallyunreliable where cash must be collectedin the field. In such instanceslack of transportation and security are major problems. Kampala, for example, has been experiencing about three to five thefts of - 15 -
cash per month at remote collection sites. Such thefts may have amounted to UShs 20 to 30 million in 1983.
2.31 Role of the Central Governament. The central government, vainly through the Ministry of Local Government (MLG), has a close relationship with local councils in matters of financial planning and control, including development projects. There is in principle the basis for a healthy partnership, especially in instances where local capabilities are lacking. In practice, however, MLG lacks the staff and equipment to do its job. The issue is that to be successful, any program to improve urban finances will have to include improving and working through certain central government agencies, particularly MLG.
2.32 Through the Urban Authorities Act and various administrative procedures, the national government exercises considerable control over the financial management of local authorities. MLG has primary supervisory control over council finances, and is responsible for:
(a) Allocation of block grants to councils (b) Establishment of financial policies and directions through budgetary control procedures (c) Review of monthly financial reports prepared by councils (d) Inspection and audit of council development programs Ce) Establishment and enforcement of council accounting practices (f) Appointment (by the Minister) of city, municipal and town Councilors, in cases where the Minister deciles that the Councilors will not be chosen by election, and (g) Management of the Local Authorities Loan Fund.
2.33 National entities other than MLG also affect local authority finances and management. The Public Service Commission appoints, hires and fires key financial staff, including Council Treasurers. The Auditor General's office is charged with carrying out year-end financial audits of councils, in instances where the councils do not retain independent auditors. Moreover, the power of a council to levy local taxes is restricted by the national taxing authorities under the Ministry of Finance. The Ministry of Finance also controls the total amount of block grants going to urban authorities, as well as any capital contributions to the Local Authorities Loan Fund. Finally, the Ministry of Commerce sets business license fees (presently at very low levels) in the urban authorities.
2.34 While in theory MLG has an important function in supervising and enhancing local authority financial management, its role in practice has been largely ineffective. Like the urban authorities it is supposed to supervise, it suffers from a serious lack of trained management and technical staff, equipment, supplies, transport, and budget allocations. The consequences are that:
(a) No written budgetary or policy guidelines have been prepared for local authorities; (b) Monthly financial reports from councils, when they are sub- mitted, are not reviewed; - 16 -
(c) No guidelines have been established for monitoring council financial operations; (d) No up-to-date local authority accounting guidelines have been prepared; (e) No procedures have been developed for reviewing and auditing council development programs; (f) The Local Authorities Loan Fund is inactive; and (g) Councilors have not been appointed in all the local juris- dictions in which they were not chosen in the 1981 elections.
2.35 The Ministry of Finance budgets the overall block grant which is distributed among the councils, and has the significant prerogative of designating taxes as central government revenue sources, pre-empting their use for local revenue. Block grants were originally intended as a supplement to local revenues, but in practice have become a primary source. A formula was developed in 1979 for computiig the amount of block grants, but because of financial constraints nationally this formula has never been applied. Instead, the grants have been based on available national revenues and the past expenditure needs of councils. Block grants are presently being made to help local governments meet the increasing salary requirements of their staff. In 1983, however, the grants to councils were inadequate to cover all the mandated salary increases, a problem which stems primarily from difficulties in raising revenue at the national level. The national income tax, for example, suffers from weak collection systems and widespread fraud and evasion. For the foreseeable future block grants will remain an unstable source of revenue for councils, increasing the pressure on them to become financially more self-sufficient. But at the same time the councils are likely to be increasingly dependent on these grants. Consequently, any short-term strategy to improve local finance should also address improvements in central government financial management and revenue collections. One approach worth consideration would be to tie national income tax collections from individuals (which are noticeably inefficient) into the more reliable local Graduated Tax collection system. In this manner the Income Tax Department of the Finance Ministry could use the list of taxpayers produced by the local assessing committees. Urban authorities could earn a fee for this service. Cash collection controls would have to be strengthened before such an approach could be considered seriously.
2.36 In the medium term, some amount of continuing block grants to urban authorities would be a sound policy. However, a strategy should be developed for the larger urban authorities (i.e., the city and municipal councils) to meet operating expenses entirely from local revenues. Ihis will necessitate reconsidering and implementing formulas for calculating individual block grants, and over the medium to long term will necessitate an evaluation of national taxes for possible transfer to local jurisdictions.
2.37 Financial Personnel. The departure of trained accountants from Uganda, together with the decline in accounting and financial training programs, has resulted in a shortage of skilled financial staff in both local and central governments. The shortage exists at all skill levels, from accounting clerks through financial managers. Ihe situation is most - 17 -
serious at the intermediateand senior levels, where accounting,auditing and financial analysis skills are normally acquired through college programs and some years of practical experience. Near-term rempdies using intensive training programs, together with expatriate advisors in key positions, are feasible and necessary. However, to sustain any improvementsmade with this approach, longer term programs will be needed for educating professionalaccountants for public sector careers, and for possibly attracting back those professionals who have left the country.
2.38 National Economic and Security Conditions. The effectiveness of any program to improve the financial well-being of local authoritieswill depend very largely on trends in national economic and security conditions. Until wages and salaries have been adjusted to prevailing price levels, the budgeting and matching of municipal revenues and expenditureswill be seriously hampered. In addition, stable currency vilues and adjusted wage levels will be required before nublic savings deposits can be increased substantially,and any realistic housing programs can be planned. Improved economic stability and physical security also will be needed for urban authorities to reliably obtain and control basic equipment, parts and supplies; to make field collectionsof revenues; and to adequately manage a property tax administrationprogram.
Housing Finance
2.39 The primary source of finance for housing in Uganda is the Housing Finance Company of Uganda (HFCU). At present, HFCU is operating essentially as a savings bank, relying on short-term investments for operating profits. New mortgage business was suspended in 1982, and restued on a limited basis in 1984. Commercial banks in Uganda are not in the home mortgage loan market. Consequently,the viability of HFCU as a source of financing for housing is central to any housing development strategy. Annex 5 presents a history of HFCU operations and its current management position and financial prospects.
2.40 HFCU currently offers 8-10% interest on savings deposits, and is now charging 15-18% interest on mortgage loans. Interest rates offered and charged by the company are controlled by the Central Bank of Uganda. Meanwhile, commercial banks in Kampala are offering higher interest on savings accounts. Since the comwn.Aial banks do not offer long-term mortgage financing,HFCU has continuiedto attract mainly small depositors who want to remain in good standing with the company in case they may want a mortgage loan. Nonetheless,the higher rates offered by the commercial banks should make it difficult for HFCU to attract new deposits to levels that would be needed to cover a substantial increase in mortgage loans. On the other hand, if HFCU raises deposit interest rates to be more competitive, loan rates also will have to be increased to maintain a profitable spread. This could make beneficiaryaffordability an even more critical issue in any housing development program.
2.41 Continued improvementsin the administrationof HFCU should put the company in a position to manage a higher volume of lending. However, essential requisites for increased lending will be substantial increases in public deposits and in the company's capital base. The central government and the CommonwealthDevelopment Corporation (CDC) have been negotiating an increase in their capital contributions to HFCU. - 18 -
2.42 To the extent that earnings continue to accrue and additional capital contributions are made available to HFCU, the company's lending ceiling will be limited only by the amount of public deposits it can attract. As a general rule, total loans should not exceed about twenty times the company's overall capitalization. At present deposit levels, an additional loan capacity of about UShs 400 million could prudently be realized, increasing at about 10% per annum. This is an insignificant amount. Given an average cost of about UShs 7 million for a housing unit, these additional loans would finance less than 60 units. Hence, very large increases in public deposits will be needed to cover the loan levels required to finance any meaningful housing development at present costs. For this to be achieved, personal inucmes will have to rise dramatically to meet the general price inflation, and then the HFCU will have to compete with the commercial banks for new deposits. In addition, as discussed further in Chapter III, lower-cost housing solutions can be promoted. - 19 -
CHAPTER III: THE AENT OF URBAN SERVICES
A. Strengthening Urban Management: Major Issues
3.1 Improvements in the design, implementation, and management of urban investments will require a strengthening of both the capacity of the central and local agencies responsible for such investments and of the ability of these agencies to work cooperatively. It is useful to visualize such institutional strengthening as consisting of improvements in (a) the structure and organization of institutions; (b) regulations, standards, and procedures; and (c) resources and capacity. The first part of this chapter discusses major issues of organization, capacity, and the regulatory environment that are reflected in current practice in town planning, building regulations, and central-local government relations. For capacity issues the emphasis is on equipment and especially training needs, since proposals for improving financial, capacity were presented in Chapter II. The second part of this chapter describes how the application of measures to deal with these issues would affect programs in urban water supply, solid waste collection, land tenure, and housiag.
3.2 Structure of Local Governmoent. The present organization of local councils is by and large adequate for the tasks they have to perform. While the fuUl official structure is quite complex, the effective functional organization of the Kampala, Jinja, and Entebbe Councils, given in Charts 1-3, shows a consistent pattern familiar to Anglophone East Africa. The Council is the deliberative body, headed by a largely ceremonial Mayor in the case of Kampala and Jinja. Day to day affairs are run by the Town Clerk's, Engineer's, Treasurer's, Public Health, and Education Departments into which are fit all the functional responsibilties of the Council.l/ All Departments report to the Town Clerk, who is the chief administriativeofficer of the Council. Committees of the Council review expenditure proposals prior to their consideration by the full Council. In its capacity as financial controller, the Ministry of Local Government is charged with reviewing budget forecasts, monitoring the progress of budget spending, and auditing council development programs (see also para. 2.31).
3.3 What improvements can be recommended in this structure give first priority to coordination between Departments, and secondly to filling gaps in responsibility. Consideration should be given to formalizing the contacts between Departments in a 'Program Review Committee' (PRC), a management team consisting of the five Department heads with the Town Clerk as chairman. The PRC would review and approve major expenditure proposals before presentation to the council committees. This
1/ The smaller units are often retained in the Town Cj.erk'sOffice until they are large enough to stand on their own. Thus, Jinja in 1984 made education, formerly with the Town Clerk, a separate Department. - 20 -
would make more systematic the present informal and essentially haphazard technical review, and would save time and effort in the long run. As a second major function, the PRC would coordinate the work schedules of units serving more than one Department. In some councils responsibility for solid waste collection is shifting from the Engineer's to the Public Health Department, while maintenance and repair of vehicles, including refuse trucks, reirainswith the Engineer. With vehicle fleets in almost total disarray, the first few new vehicles acquired will be much in demand, and the PRC would advise on their allocation. In about 4-5 years Kampala will also need to consider establishing a separate traffic management and transport planning section in the City Engineer's Department, to consolidate functions now split between two sections and to remedy the absence of responsibility for urban transport planning.
3.4 Even more than the structure, however, priority should be given to clarifying the function of councils in areas where the line between central and local management has been left undefined. The area of electricity supply and street lighting provides the model for such an arrangement. The respective roles of KCC and of the Uganda Electricity Board (UEB) are recorded in an agreement specifying the services UEB as agent provides to the KCC as client or consumer of electricity. Each side has been aware of the responsibilities of both, and as a resuit the agreement has worked well in practice.
3.5 A similar relationship, that has also worked satisfactorily, prevails between the Commissioner of Lands and Surveys (Ministry of Lands, Minerals, and Natural Resources) and KCC in land valuation, land registry, and plot attribution. This relationship, however, has never been written down. It is recommended that an agent-client agreement be drawn up to formalize the working arrangements that have evolved between the Commissioner of Lands and KCC. The framework of such an agreement is provided by statutes already in force, such as the Urban Authorities Act and the Town and Country Planning Acts. Like the UEB/KCC text, this agreement would specify:
(a) the form of relationship linking the parties; (b) the undertakings of each party; (c) ownership of assets; (d) terms of payment for services rendered; (e) responsibility for maintenance of assets; and (f) procedures for additions to the stock of assets (e.g., network extensions, valuation and registry of new land, etc.).
3.6 The Commissioner of Lands-KCC agreement pertains to a critical area of central-local relations that having worked well on the - 21 -
ground, should not be difficult to put on paper. Next, this procedure should be applied to a central-local issue which has been a source of tension for 15 years: road maintenance in Kampala. When the boundaries of Kampala City Council were enlarged in 1968 from 22.2 sq km to 195 sq km, the demarcation for road maintenance and rehabilitation between KCC and the Ministry of Works (MOW) was not adequately clarified. While WOW has taken the view that KCC is responsible for all trunk roads within its expanded boundaries, KCC maintains that responsibility for the western and eastern districts of the expanded KCC remains with MOW. Resolution of this dispute, in written form, is urgently required to avoid misallocation of future investments. A large KCC road rehabilitation project being launched with financing from the European Community (EC) concerns only the Central District of Kampala. Simultaneously, MOWis planning to rehabilitatethe Kampala-Jinja Road beginning not at the Central District line of Kampala but 4-5 miles farther out, at the eastern extremity of the KCC.
3.7 Central-Local Relations In Kampala. The key management issue facing Kampala is the duplication of vertical lines of control between the central government and the KCC. On the one hand, MLG as the supervisory ministry of all local governments is empowered to carry out the financial management and quality control functions already described (see para. 2.31). On the other, the Kampala District Commissioner (DC) has important authority in both law and practice over the growth and management of Kampala.
3.8 The DC is the President's personal representative and Chief Government Agent in the capital. He is appointed by the President and reports to the Permanent Secretary, Office of the President. Largely because the military regime questioned KCC's capacity to handle security in the Kampala area, the post of DC Kampala was created in 1974. The DC presides over the District Intelligence Committee, which has met monthly since that time to review security. Enforcement of security measures passes from the DC to local chiefs, as it does elsewhere in the country. However, local chiefs since 1968 have been incorporated into the KCC as Council Agents, and report to the Town Clerk. Especially as the KCC limits contain extensive semi-rural and rural areas which traditionally are formed into districts, local chiefs/Council Agents effectively report to both the Town Clerk and the DC in their duties of tax collection, monitoring of compliance with security, and interpretation of government policy at the local level. In this sense the roles of the Town Clerk and of the DC are overlapping at the same level. However, in another sense the roles are hierarchical. The DC presides over the important District Team and Planning Committee, which sets guidelines for the development of the KCC region. The KCC Town Clerk is a member of this committee.
3.9 It is recommended that the Public Service Commission launch as soon as possible a study leading to proposals for sorting out the roles - 22 -
of MLG, KCC, and DC in the management of Kampala. Scenarios to be concidered would likely include the following: Scenario A: The present structure is retained but with formal coordination between DC and KCC (joint planning committees, task forces). Similar linkages are established between DC and M1G to clarify responsibilities for control of KCC activities. DC/KCCcoordination is possibly achieved by giving DC a seat on KCC committees, as is true for councils elsewhere in the country.
Scenario B: DC retains authority over security matters and becomes an advisor to KCC on development issues. The District Team and Planning Committee becomes the District Planning Advisory Committee, still chaired by the DC. Some traditional development functions of the DC (e.g., veterinary services) remain with the DC until the periphery of the KCC is more urbanized.
Scenario C: DC remains in charge of security but most or all development functions are vested in KCC. The DistrictTeam and Planning Committe is abolished. The DC, however, is regularly informed (for example, through accounts of meetings of the proposed PRC; see para. 3.3) of upcoming development programs so that security implications can be evaluated.
Scenario D: The post of DC is abolished. The pre-1974 arrangement is reinstated, with an Assistant DC for Kampala reporting to the DC Mpigi.
Scenario K: The post of DC is abolished along with the District apparatus in Kampala which is handed over to KCC. The territory of the DC Mpigi (less Kampala) is split into two, largely so that each DC would have less ground to cover.
3.10 Although to anticipate the conclusions of this review would be premature, the impression is inescapable that Scenario C has much to recommend it. Line authority from the central government to local authorities remains split between MLG and the DC, but there is a clear distinction as to the powers of each. MLGwould gain greater stature as the sole supervisor of KCC's programs for the growth and management of Kampala. Because development programs in Kampala depend heavily on further improvements in security, the DC retains a vital, though now more indirect, - 23 -
role in the city's future. Retaining the present structure (Scenario A) appears completely unworkable: given the confusion of roles and authority, there is bound to be tension between the DC and the KCC Town Clerk even with coordination linkages. Scenario B does not materially reduce this confusion. and perpetuates problems of service coordination (e.g., DC veterinary services and KCC health services in the same locality). Finally, doing away with the DC post (Scenarios D and E) would appear to make it much more difficult to manage the security situation in Kampala.
Regulations and Standards
3.11 Town Planning. Regulations and procedures governing the preparation of urban land use plans suffer from three main shortcomings. First, they assume it is possible for economic activity to be allocated spatially by public decision. Although it is true that town planning choices (such as the location of bus terminals and health clinics) affect the spatial allocation of residences and employment, it is not true that the spatial allocation of residences and employment can be determined by town planning choices. Physical plans could be improved in their coverage of socio- economic conditions in the towns, which in any case change rapidly making the plans soon obsolete. Second, no one (except, perhaps by default, the counclls) has responsibility for costing out the municipal infrastructure plans and translating them into investment programs. In the rare cases where this is done, as for example with Structure Plans for Masaka and Mbarara prepared recently by consultants to the Reconstruction and Development Corporation (RDC), it is found that lack of attention to issues of financing, economic viability, and cost recovery casts serious doubt on the feasibility of the final result. Third, although councils approve plans before the final submission to the Town and Country Planning Board, they typically play little or no part at the preparation stage.
3.12 The first priority to improve the to-wnplanning process is to draw up an agent-client agreement between councils and the Ministry of Housing and Urban Development (MEUD, where responsibility for preparation of town plans has been located since its removal from MLG in 1981) similar to the existing KCC/UEB agreement and that proposed for KCC/Commissioner of Lands. For greatest efficiency and economy of resources, actual preparation of plans should continue at MEUD. However, the Physical Planning Department of MHUD should be strengthened and enlarged so that it can develop capabilities in the design and evaluation of urban investment programs. This Department would require the blending of economist and financial analyst as well as planning skills and those of other specialists. Technical expertise would be necessary to help with the shift from physical planning to investment planning. As the clients, councils would (a) initiate the process by requesting that the Department prepare an Area Development Plan justifying capital investments from the socioeconomic - 24 - as well as physical standpoints; (b) be kept informed by MHUD during preparation; and (c) as at present, approve the plans before their final consideration by the Town and Country Planning Board. Although M1G has not been directly involved in town planning since 1981, this redefinition of the objectives and composition of plans requires importent inputs from MLG, particularly judgments as to the viability of the financ'ng plans, availability of finance, and cost recovery measures proposed for the investments.
3.13 Building Regulations. Legislation governing building construction differs markedly according to whether the construction will occur in a Planning Area or a Residential Settlement Area. For Planning Areas the 1964 Public Health Act (Building Rules) specifies in detail the materials and methods permitted for acceptable Grade I construction. Primary responsibility for enforcement of the Building Rules lies with the council Engineer's Department. To obtain a building permit, a plot owner must submit plans in quadruplicate and structural drawings in duplicate to the engineer. The plans are then checked for conformity with the structural aspects of the Rules and circulated to other council officials for compliance with planning, land tenure, and health regulations. The plans then return to the Engineer's Department for dispatch to the Development Committee of the council and the Council itself. After a permit has been approved, inspections are to be carried out at seven stages of construction.
3.14 It is not suprising that only a few house builders have the resources and patience to meet these requirements. Housing development therefore mostly takes place outside the areas where the Building Rules apply, either in Residential Settlement (Grade II) areas or in unrecognized communities. These settlements are generally far from the city centers and hence remote from job opportunities. The Grade II building rules are much simpler and are stated in terms of performance criteria rather than specifications of materials and methods.1/ Although a few materials (grass for roofing) are allowed only in specialTy designated areas, the Grade II Rules and their administration are basically flexible. Even the Grade I Rules do not prohibit innovation in design or the use of new materials. However, the detailed specifications of materials and building methods promotes rigidity of techniques, favors established and experienced builders, and discourages innovation.
3.15 Existing regulations do allow councils to define their own performance standards. KCC, for example, could take advantage of this provision by asking the Physical Planning Department (MHUD) to prepare performance criteria after carrying out tests of local building materials. The resulting criteria would quite likely legitimize a wider range of acceptable materials and techniques for construction and finish.
3.16 It is important to note that although the local authorities would in this manner continue to be concerned with establishing guidelines
1/ Foundations, for example, are required to be ...adequate to support the load transmitted to them.- - 25 -
and criteria for construction, they would not need to be concerned about how quickly a lower-standard house is upgraded to a higher standard one. This preoccupation would disappear because any house would be acceptable as long as it meets the performance criteria. Councils would no longer incur the irritation of residents feeling pressured to improve their houses faster than their incomes permit.
Capacity
3.17 Equipment. Since most municipal vehicles and equipment were destroyed or stolen during the war of 1979, equipment needs are pervasive. For lack of transportation, ambulance and solid waste collection units in councils have been inactive, and mobile health workers have not been able to reach the majority of urban families who do not live within walking distance of a dispensary.
3.18 A program to rehabilitate vehicle fleets should concentrate first on (a) acquisition of road maintenance equipment and vehicles for Kampala, and (b) repair of the Sixth Street Maintenance Workshop in Kampala and of vehicle maintenance facilities in Jinja and Entebbe. In the EC-assisted road rehabilitation project being launched by KCC, no provision is made for maintenance equipment. Without a maintenance capacity the streets will quickly revert to their present state, and this investment will have been wasted. Replacement of vehicle maintenance equipment, purchase of tools, and repair of the premises, especially at the Sixth Street Workshop, should precede even the purchase of spare parts so that the repair of wrecked vehicles can begin immediately once the spares arrive. Also, equipment needs of Masaka, Tororo, Mbale, and other towns should be evaluated so that similar rehabilitation programs can be prepared.
3.19 The desperate shortage of equipment for survey of land boundaries is a major bottleneck in the issuance of land titles by the Commissioner of Lands. Since the Ministry follows the Torrens land registration system, survey plans showing the precise plot limits must be attached to title documents. Restoration of survey equipment is necessary to speed up the ponderous process of land surveying and plot attribution.
3.20 Traiuimg. Turning to the human aspects of capacity issues, the training needs of local governments were reviewed in terms of what is required to fill existing vacancies in their establishments. Annex 7 presents the results of the surveys undertaken at Kampala, Jinja, and Entebbe councils, together with an assessment of the capacity of key training institutions in Uganda to meet the most urgent needs.
3.21 The most serious training deficiencies are at the middle management and senior technical levels. Engineer's departments lack trained works supervisors and assistant foremen, while the treasurer's - 26 -
departments make do with far fewer principal tax officers, accountants, collection agents, and auditors than are required. These gaps in middle management harm those both above and below. On the one hand, senior managers by default become engulfed in matters that would have been handled by their subordinates. On the other, the implementation staff are either promoted too quickly to lower and middle management or, more typically, carry out their technical duties without guidance or feedback. As an alternative to training, staff without the right skills could theoretically be reduced through attrition and others hired in their places. This was tried in early 1983 at KCC and proved to be politically impossible, even had the required skills been available on the market.
3.22 The first priority is therefore training to enable local authorities to improve their administrations and their financial and revenue collection procedures. The most senior council officials would benefit from exposure to local government operations abroad, through for example 1-2 months' visits in the UK or the USA. Most training courses would however be provided locally, in the first instance by the Institute of Public Administration (IPA). IPA diploma courses in Local Authorities Administration, in Office Management, and the Finance Officer's Diploma which had been eliminated in 1981 were reinstated in July 1984. To achieve the course objectives, expatriate teaching assistance and equipment will be required. Early consideration should also be given to reinstating the accounting diploma course, also discontinued in 1981. For administrative staff under the supervision of MLG, the main emphasis should be on training administrative secretaries and township officers for improved administration of the very small towns designated as "new administrative centers.2
3.23 The second set of major training requirements concerns redirection of the Physical Planning Department of MEUDtoward urban investment planning. There are two conditions for this to occur. First, the planners and engineers now in the Department should be complemented by financial analysts and economists immediately, and later by other specialists such as statisticians and demographers. Second, responsibility for deciding whether proposed investments are consistent with the Recovery Program lies with the Ministry of Planning and Economic Development (MPED). Proposals for strengthening MPED, in part through training, have been made in the framework of the IDA Third Reconstruction Credit.1/ Because of its vital role in the monitoring of investments, the training needs of MPED should be met in parallel with those of MHUD's Physical Planning Department.
B. Strengthening Urban Management: Inplementation
3.24 The previous section described changes in organization, systems, and capacity that are associated with improved urban management.
1/ See Michael L.O. Stevens, Review of Planning and Economic Management Machinery," November 1983. - 27 -
This section outlines how actions of local and central government to provide municipal services, land and housing would be improved by such changes.
municipal Services
3.25 Water and Sanitation. Under the Water Supply and Sanitation Rehabilitation Project being launched with IDA assistance, water and sewage treatment networks in the seven largest towns of Uganda will be rehabilitated. At the same time, the capacity of the National Water and Sewerage Corporation (NWSC) to respond effectively to pressing demands in other towns will be strengthened through technical assistance and training. However, as the institutional capacity of NWSC is built up, it is equally important to redefine the statutory relations between NWSC and the councils.
3.26 Prior to 1972, local authorities were fully responsible for construction, operation, and maintenance of water supply and sewerage networks. This responsibility was transferred to the newly-created NWSC in 1972. Councils were left without authority, but as the most visible and accessible government bodies continued to be blamed by their constituents for the lack of service. Up to the present day, councils have maintained that water and sewerage networks should be returned to their management.
3.27 By means of a written agent-client agreement of the type recommended for town planning (see para. 3.12), the effectiveness of both .WSC and local authorities in the provision of water and sanitation services would be enhanced. Councils would ask NWSC to prepare plans for network extensions and plant rehabilitation on the basis of councils' own programming priorities. NWSCwill undoubtedly have to be selective in meeting these requests, until its own capabilities improve further. Councils would monitor the preparation of designs and, as at present, consider the final product in the Development Committee and later the full Council. In doing its work in accordance with stated priorities of the councils, NWSC's role in the design, implementation, and maintenance of investments would be facilitated since it can count on the more active support, or at least the lack of resistance, of councils. On their part the local authorities would again play a significant role in the process, even if this role is conception and monitoring and not line responsibility.
3.28 Road and Vehicle Maintenance. The most serious shortcomings in the road maintenance capacity of councils can be traced to inadequate training and equipment. Both routine and periodic maintenance were done fairly well before 1971, and each was budgeted for separately in the council Roads Funds. Subsequently, periodic maintenance funds were removed from the budget and routine maintenance resources were drastically reduced. For the - 28 -
foreseeable future, local authorities will therefore continue to contract out the reconditioning and reconstruction of roads to the private sector. This is entirely appropriate. Meanwhile the focus would be on acquiring tools and equipment to rehabilitate vehicle maintenance workshops, especially the Sixth Street Workshop in Kampala. Equipment needs will be varied, since street surfaces vary from 97% paved in central Kampala to 5-15% in the Western and Eastern Districts of Kampala, but they should not be considerable (in the first round of acquisitions) to get the maintenance workshops and street patching crews back in operation. Any subsequent purchases would be tailored to progress in local financial reforms, so that recurrent costs and provision for renewal of equipment can be met through local taxation.
3.29 Solid Waste Management. Trucks, bins, hand carts, and other equipment provided under the IDA-assisted Water and Sanitation Rehabilitation Project should dramatically improve the solid waste collection capacity of councils in Kampala, Jinja, Entebbe, Masaka, Mbarara, Mbale, and Tororo. At different times, the Public Cleansing units of councils charged with solid waste collection and disposal have been located in the Engineer's Department; the recent trend is to shift them to Public Health departments. The exact placement of these units appears to be less important than the coordination required with vehicle maintenance staff in the Engineer's Department, so that the skip trucks and carts will be regularly serviced. Although scheduling would theoretically be easier from within the Engineer's Department, there is no reason why Public Cleansing units located in Public Health should not be able to liaise as easily with vehicle maintenance staff in the Engineer's Department. For example, equipment maintenance schedules for all Departments should be reviewed regularly by the Program Review Committee (see para. 3.3).
3.30 Markets. The way in which the local councils' monopoly of food markets is managed illustrates the benefits to be obtained from a more flexible institutional framework that treats similar economic entities similarly. In Kampala, 52 food markets with a total of about 7,100 stalls have been licensed by the KCC. Licensing ostensibly maintains health standards by admitting for sale only goods passed by health inspectors. However, these intentions are thwarted since goods that are believed not to pass the city inspection are sold under the table to people in illegal markets, now numbering 43 in Kampala with,about 2,000 stalls. When it is considered that of the 52 legal food markets, 43 are "undeveloped,-and that physical differences between -legal, undeveloped" and "illegal" markets are often negligible, it makes both financial and economic sense to bring as many presently "illegal" markets as possible under the purview of the councils. In the KCC a survey of all markets was undertaken in 1981, with the result that 10 markets were subsequently legalized. It is recommended that this process be expanded in Kampala and initiated in Jinja, where the impacts on local revenue can be substantial (see paras. 2.16-2.19). Laund -29
3.31 With the exception of one municipal council (Bombo) and 18 town councils, all cities and towns in Uganda have the authority to allocate and manage the land within their borders. Ownership of the land is vested in the Uganda Land Commission (ULC), which transfers effective control to the local governments through a 199-year lease at a symbolic charge of USh 1 per year. Individuals may then obtain a leasehold title from the local authorities upon completion of the following steps:
a. A cadastral survey is conducted by the Chief Registrar of Titles, provided there is an approved Zoning Plan for the area b. Councils declare the plots open for lease c. Applications for a plot are made to the Chief Registrar of Titles d. Land records are checked to make sure the plot is available e. A Government Valuer determines the "land premium," or market value based on location, amenities, etc. f. The application form is sent to the Town Clerk, who puts the item on the agenda of the Development Committee of the Council g. After review by the Development Committee, the item is voted on by the full Council. The Chief Registrar of Titles is represented at the Council meetirg h. Minutes of the Council meeting are forwarded to the Chief Registrar of Titles i. If the Chief Registrar indicates "approval' on the minutes, a lease offer is extended to the applicant. The applicant is asked to pay (a) the full land premium; (b) all survey fees; and (c) title insurance j. A lease document ("Lease by Urban Authority") is prepared and sent to the applicant who signs, pays a stamp duty, and returns the lease to the Chief Registrar of Titles k. The Chief Registrar of Titles forwards the lease to the council, which seals it 1. The sealed lease is returned to the Chief Registrar of Titles, who issues a Leasehold Certificate. Leases run 5 years (2 years in Kampala), and are extended to 49 years in rural areas or 99 years in urban areas provided the plot has been developed. The longer leases are renewable. Ground rents equal to 1OZ of the land premium are paid annually, and revised every 10 years. - 30 -
3.32 As shown in Table 2 below, those who complete this long process and obtain a leasehold title represent a small fraction of the potential demand (although a larger fraction of the high-income residents that are able to afford the costs involved):
Table2: Ldx LeasehldsAwrded in relatimn to PotenialDmmu, 1979-1983
AnmuaL New Plots Pqplation Reqlred leasebolds(OCnificates of Title) Awarded Total Tbwn Increasea/ Eah Yearb/ 1979 1980 1981 1982 1983 1979 -1983
Kampala 16,O0 2,960 107 211 345 230 330 1,223 Jinja 1,575 290 13 31 12 18 22 96 Etebbe 790 145 7 6 13 12 21 59
/ At 3.5%armal pouation gw-th. b/ 5.4 person per bxuebold. Assam one hxsetDld per plt.
Swuroe: Coazdssioner of Ladi Surveys.
3.33 Several factors combine to produce this result. First, surveying of new development areas has been virtually halted by the lack of both survey equipment (see para. 3.19) and financing. The national budget has not been able to pre-finance cadastral surveys, even though their cost is recovered from plot applicants at the time of the lease offer. Moreover, the review of individual plot allocations by the Development Committee and by the full Council further draws out the attribution process. This review also applies to applications for lease extensions, where a judgment must be made about how much effort over the previous two or five years -as gone into developing the plot. Given the shortage of building materials in Kampala, the two-year initial lease period is typically not long enough to finish construction. Finally, land premiums are higher than can be afforded (especially without credit) by many applicants, although they may still lie well below the full market value. Of the applicants for a plot in Entebbe who completed all steps in the process over the past three years, less thav half actually accepted the leaseholds that were finally offered them because they discovered they could not meet the payment terms.
3.34 As was also suggested for building regulations (para.3.15), a broadening of the range of acceptable solutions would both simplify the process and permit its extension to areas not yet in the system. The objective should be to confer security of tenure, as a means of channeling private savings into investments in housing. In parallel with the title award process described above, the granting of an Occupancy Permit to other segments of the urban population is likely to be welcomed as a measure of security by those having no written evidence whatsoever of tenure. Following this line of reasoning, Occupancy Permits would be issued - 31 - by councilsto low and middle income residentswhose house locationsdo not interferewith plans for the future provisionof services. In one or two pages, the OccupancyPermiL would (a) confirm officiallythe right of plotholdersto remain where they are; and (b) be changedinto a full leaseholdtitle when the plot is surveyedand the land premium is paid. Because ownership remains with the council when an OccupancyPermit is delivered, no land premium or ground rents would be due. 3.35 As building regulations become more performance-oriented (see paras. 3.15-3.16),there would be much less need for detaileddistinctions among land uses. Consequently,the process of awardingland leaseholdscan also be simplified. The shift from physical planningto investment planning would imply a move away from the presentZoning Plans. The tendency instead would be to prepare what can be called Area Development Plans, which would indicate the broad land use implications of future investmentswithout need for detailson what each type of use will be. Low to middle incomeresidential", or even an unqualified"residential," could replacethe currentGrade I-GradeII designations.The basic transportationnetwork would be indicated,and land reservesfor community facilitieswould be shown. Althoughthe DevelopmentCommittee and the full Councilwould review and approveArea DevelopmentPlans, there would be little need afterwardto approveeach plot application since the layout of all plots is acceptable. These time-consumingsteps can be saved.
3.36 Once the plot is awarded and constructionbegins, homebuilders should not be penalized if outside forces such as the scarcity of building materials prevent them from finishing within two years. Consideration should be given to lengthening the initial lease period in Kampala to four or five years. In contrast, the period between revision of the ground rents (10 years) is too long. In nominal terms, grm'nd rents would have to be raised astronomically to cover the inflation of a decade and maintain their real value. It is recommended that the period between revision of ground rents be reduced immediately to five years, and be further reduned when staff of the Commissioner of Lands are geared up to manage more frequent revaluations.
3.37 Mailo Land. Over half the land area of Kampala lies outside the jurisdictionof the UgandaLand Comission and consequentl' of KCC. Mailo land, locatedprimarily in the westernand southerndistricts of the KCC, is privatelyowned land with titlesgranted under customary rights before and duringthe Protectorate.Mailo land ceased to exist under 1975 legislationaimed at forcingmailo ownerseither to developor relinquishownership. This legislation,however, was never enforced.
3.38 Fortunately,ULC land in Kampalahas not all been used up. This will allow time to sort out the complexities of the mailo ownership issue and examine the impacts of alternative control measures. Meanwhile, as the city expands, it can be expected that mailo owners will respond to economic incentives to use their land more intensively.
Housing
3.39 As in other countries, central and local authorities in Uganda have found it impossible to meet the demand for housing with affordable publicly constructed housing units. It is widely recognized that a change - 32 -
in policy is justified not only oecause the existing public housing stock has deterioratedbadly, but also because its scarcity perpetuates inequities between those with access to it and those without.
3.40 The problems are similar whether the public housing is owned by the National Housing and ConstructionCorporation (NHCC) or by local councils. Most of the KCC's 1,760 council housing units, for example, came onto its books in 1958 when the African Housing Departmentof the Ministry of Works, which had built them, was dissolved. Since only 150 units have been built since 1962 (one third of these to replace existing ones deterioratedbeyond repair), there has been virutally no new construction in over 20 years. Table 3 below shows that fixed 1983 rents in KCC council housing bear no relation to market rents for the same type of house:
Table 3 Rents in relation to Market Values of ComparableUnits KCC Council Housing, 1983 KCC Estimated Council Fixed Monthly - Market Rent, Housing Rent, 1983 1983 Unit (USh) (USh)
1 room 165 3,000 1 bedroom 240 8,000 2 bedrooms 615 12,000 3 bedrooms 1,830 16,000
The argument that this is a necessary in-kind wage supplement for underpaid city employees loses validity when it is considered that two-thirds of such housing is not occupied by city employeesbut by the general public. Aside from council housing, KCC has 88 units availableto senior staff. In the staff housing the difference between fixed KCC rents and market rents is even wider. For a 3-bedroom house in a Grade I area, renting monthly on the open market perhaps for USh 20,000,a senior staff member of KCC pays USh 142.
3.41 The fact that neither central nor local authoritiesshould accept unlimited responsibilityto house their staff was recognizedas far back as 1954. Now, both levels of government appear on the verge of redefining their roles as facilitatorsin the housing market rather than participants. In-cash housing allowances,permitting public officers to obtain their housing privately, are being given more serious thought. This is a wove very much in the right direction. However, such an initiative will need to develop in parallel with a reorganizationplan for NHCC that would permit devestitureof its unproductiveassets (essentiallyits public housing stock). NHCC could then take on the management of programs to develop surveyed plots for private house construction,along the lines of the -receptionarea programme'now being considered.
3.42 The practical problems of introducinga housing allowance scheme will need to be carefully reviewed. Given the steep rise in house rents and in the costs of new construction, the financial burden will need to be reduced through a phased introductionof allowances together with the establishmentof long-term loan arrangements. MHUD is assemblinga team of consultants to advise Governmenton the issue of civil servant housing. The scope of work of this team should include an in-depth evaluationof the impactsof introducinga housing allowancesystem. - 33 -
3.43 Since surveyed plot programs can be administrativelycomplex, the redirectionof NRCC to acquire competence in this area will take time. In the near term, however, neighborhoodupgrading holds a better promise both of improvingthe living conditions of poor families and of demonstratingthe redefinedpublic-private roles in housing. Proposalsfor slum improvementin the Namuwongo,Wabigalo, and Kisugu districtsof Kampala show that a start has been made toward developing a workable program. To more closely reflect the mix of public coordination and private initiative, these proposals should be redefined to (a) reduce the scope to what is within the repayment capacity of residents;(b) focus on basic services,with an optional credit program for house constructionand improvement; and (c) improve security of tenure through introduction of Occupany Permits. Families with Occupancy Permitscould then build in non-permanentmaterials on a 4- or 5-year lease, provided the materials meet the performancecriteria set forth in the building regulations.
3.44 Building Materials. To satisfy these constructionneeds, critical shortages of building materials must be addressed. Roofing sheets and nails continue to be almost lOOX imported,as there are no alternatives for completing most buildings. It is recommendedthat MHUD closely monitor trends in the productiorof locally-basedmaterials (primarilybricks and concrete blocks), so that complementaryimports of roofing sheets and nails can be assured. The production of bricks in turn requireslarge amounts of energy, currently derived from coffee husks and firewood. Wood resources are being badly depleted in many semi-urban and rural areas, raising the opportunity cost of using coffee husks as fuel for brickmakingrather than in agriculture. For brickmaking,alternatives such as recycled diesel fuel rather than coffee husks should be explored, since the larger brick kilns accommodateseveral types of fuel.
3.45 Industrially-producedbricks are affordableto only a small segment of the population,but artisan and small-scaleproducers make bricks suitable for single-storyhouses and use less capital in smaller tranches. Programs being designed by the Ministry of Industry to help small-scaleproducers should be funded and put in place as rapidly as possible. Coordinationwith the larger producers (particularlyUganda Clays) would help get these programs off the ground: since the current demand far exceeds the supply of building materials, the industrial producersdo not see small suppliers as a threat and have shown an interest in providing technicalassistance. Other programs such as those at the Kiteredde ConstructionInstitute near Masaka are designed to develop local materials and train artisans in their use. They deserve support as part of a reorientationof policiesin central governmentministries toward the productionof local materials. Finally, the Building Research and Materials DevelopmentUnit of MHUD will also reqciremore equipment and greater staff capabilitiesif it is to fulfill its role in the design, testing, and demonstrationof local materials.
3.46 Unless regulationsand standardsare also made more flexibl , these direct actions will probably have only a limited impact. Performance-orientedbuilding regulationswould automaticallygive greater scope for the use of local materials. Moreover, some local authorities prohibit the firing of bricks within their boundaries,despite the number of suitable sites and the high cost of transportingfinished bricks from outside the town limits. A review of these regulationsis a necessary complement to the managerial and financial advice provided under Ministry of Industry programs in the promotion of local building materials. - 34 -
CHAP=ER IV: RECGIHHEDAXIONSFOR LS INITATIO5
4.1 The recommended strategy for improving urban management and finance in Uganda builds selectivelyon the strengths of central and local authorities and addresses the most commonly shared weaknesses. The overriding purpose of such a strategy is to support the goals of the Recovery Programme by improving local services and the capacity to generate and pay for essential investments. More specifically,what is proposed is designed to:
a. Set clear guidelines for urban institutionsby formalizing the successful informal procedures and clarifyingroles and responsibilities
b. Improve the financial administrationof local authorities, the financing of urban investmentsand the recovery of costs from those who benefit
c. Establish similar regulations and prices for similiar coTnmodities and services
d. Introduce more effective measures for servicing of land, granting of tenure, and house construction.
A. lumediateAction Program
4.2 From the set of recommendationspresented in earlier chapters, measures making up an ImmediateAction Program to be carried out as rapidly as possible include the following:
a. Technicalassistance, equipment, and materials for strengtheningfinancial management in Kampala, Jinja, and Entebbe municipalitiesand for improvingthe effectiveness of MLG (paras. 2.10 - 2.38) 1/
b. Equipment and vehicles in KCC for adequate maintenanceof roads, and equipment, works, and tools in Kampala and Jinja to rehabilitatevehicle maintenancefacilities (para. 3.18)
c. Written clarificationby the agencies concernedof central and local government responsibilitiesand the roles of MLG and DC in the managementof Kampala. For water supply/sewerageand town planning, redefinitionof present arrangementsto ensure an effective role for councils (paras. 3.4-3.10)
d. Technical assistance,materials, and teacher training to
I/ Although equipment and technicalassistance needs of these three municipalitiesare critical, requirementsare also urgent in at least 12 major cities and towns. At the same time, the capacity to use and maintain the equipment will need to be strengthenedin these other towns, as is also the case for Kampala, Jinja, and Entebbe. - 35 -
strengthen training capabilities at IPA, Uganda Technical College, National Teacher's College, and the Survey Training School (paras. 3.20-3.23)
e. Measures to simplify the regulations governing land servicing and house construction (paras. 3.14-3.16, 3.34)
f. Encouragement of small and medium-scale brick producers and construction artisans (paras. 3.45-3.46).
Specific aspects of the measures proposed for immediate action are discussed in paras. 4.3-4.17 below.
Local Government Financial Management
4.3 Overall Strategy. Recommendations for strengthening local government financial management would initially concentrate on improving and supplementing the capabilities of in-country staff, using expatriate advisers. Concurrently, established training institutions and their curriculums would be strengthened to provide more formal financial training. The curriculums would have to meet two general areas of need: college-level training for professional accountants; and functional short programs in specialized areas of municipal accounting, auditing, financial analysis, and municipal finance. The expatriate advisers would provide input to ongoing curriculum needs at the training institutions, and would complement the formal training by providing on-the-job training to local and central government staff.
4.4 The tasks of the expatriate advisers would be to (a) serve as "mentors' to key in-country staff; (b) take a lead role in improving and documenting systems and procedures; and (c) provide policy and operational advice on municipal revenue strategies and budgeting. Three advisers would be needed for a period of two to three years each. They would be assigned to the Ministry of Local Government. 'One adviser would assume a lead role in addressing issues of financial policies, inter-ministerial issues, local and central government relationships, and systems and procedures wichin the Ministry. A second adviser would work full time with the KCC, concentrating on improving systems and procedures, developing staff capacity, and advising on financial management issues. The third adviser would play a similar role for Jinja and Entebbe, and also provide back-up support at MLG.
4.5 The near-term efforts of the advisers would focus on streamlining financial management policies and practices; improving, standardizing and documenting systems and procedures; dnd upgrading staff capabilities. Opportunities to increase specific revenue sources at councils would also be addressed, but this should not be an immediate emphasis. As results are realized in the management areas, and as the national economy improves, the focus of the advisers would shift toward increasing municipal revenues and capital financing resources to support development programs. This effort would include (a) reactivation of the Local Authorities Loan Fund; (b) improvement of revenue collections; (c) - 36 -
development of programs for making larger councils financially self-sufficient; and (d) initiation of a comprehensive property tax administration program.
4.6 Program Elements. The following tasks comprise a recommended immediate action program for improving local government financial management. They are listed in approximate order of priority.
a. At the Ministry of Local Government:
(1) Prepare a plan and schedule for the payment of taxes in arrears to councils from central government agencies and corporations.
(2) Develop and document a formula for allocating available block grants to urban authorities (to be done ±n consultation with the Ministry of Finance).
(3) Appoint Councilors where vacancies exist in the urban authorities.
(4) Assess policies and procedures for the appointment and retention of financial staff to urban authorities (to be done in consultation with the Public Service Commission).
(5) Assess the feasibility of having urban authorities set business license fees within their jurisdiction (to be done in consultation with the Ministry of Commerce).
(6) Update current records of the Local Authorities Loan Fund.
(7) Prepare written policies and guidelines to be used by councils in budget preparations.
(8) Establish and document local authority accounting and reporting requirements.
(9) Develop and document analysis guidelines to be used in reviewing local authority financial reports.
(10) Develop and document records, systems, and procedures for the eventual resumption of the Local Authorities Loan Fund.
(11) Develop and document detailed procedures to be used in auditing local authority development programs. - 37 -
b. At the Ministryof Finance:
(1) Review,change if appropriate,and plan for implementingthe existingformula for calculating overall annual block grants (to be done in consultation with the Ministry of Local Government).
(2) Develop a strategy for increasing public employee wages to meet generalprice level increases.
(3) Assess the feasibilityof tying the collectionof national personalincome taxes into the system of local GraduatedTax collections.
(4) Assess the feasibilityof transferringselected nationaltax sourcesto urban authorityjurisdiction. c. At the office of the Auditor General: (1) Review,and as necessary,revise and document financialauditing standards and programsfor urban authorities.
(2) Establish criteria and a plan for using independent accountantsfor auditingurban authorities,to the extent Auditor General resources are not sufficient to conduct the audits beginning with 1983. d. At Kampala City Council:
(1) Update accountingrecords and prepareabstracts of accounts for the year ending December1983.
(2) Review,revise and documentsystems and procedures for controlling cash disbursements.
(3) Review, revise and documentsystems and procedures for controllingrevenue collections.
(4) Determineimmediate needs for accountingequipment and supplies,and prepare a relatedacquisitlon plan (to be done in consultationwith MLG).
(5) Review,revise and document systemsand procedures for maintaining records for property rate taxes, the GraduatedTax, and for licensesand fees.
(6) Update individualtaxpayer records. (7) Review and revisepublic market rents and fees. - 38 -
e. At Jinja Municipal Council:
(1) Review and revise public market rents and fees.
(2) Review,revise and document systems and procedures for maintainingrecords for propertyrate taxes, and for licensesand fees.
(3) Updateindividual taxpayer records.
(4) Review,revise and documentsystems and procedures for controllingcash disbursements.
(5) Review,revise and documentsystems and procedures for controllingrevenue collections.
(6) Determineimmediate needs for accountingequipment and supplies,and preparea relatedacquisition plan (to be done in consultationwith MLG). f. At Entebbe Town Council:
(1) Prepareabstracts of accountsfor the year ending December 1983.
(2) Review and revise publicmarket rents and fees.
(3) Review,revise and documentsystems and procedures for maintainingrecords for property rate taxes, the Graduated Tax, and for licenses and fees. Entebbe shoulduse the GraduatedTax system and procedures in Jinja as a model. (4) Update individualtaxpayer records.
(5) Review,revise and documentsystems and procedures for controllingcash disbursements.
(6) Review,revise and documentsystems and procedures for controlling revenue collections.
(7) Determine immediate needs for accounting equipment and supplies, and prepare a related acquisition plan (to be done in consultation with MLG). - 39 -
Mainteumnce Equipment
4.7 A municipal engineer or municipal technical services specialist would be required for a period of one month to determine immediate needs in road maintenance and vehicle maintenance equipment. The task of this adviser would be to prepare descriptions and estimates of capital and operating costs for (a) equipment for KCC to ensure adequate maintenance of roads to be rehabilitated under the EC-assisted project; and (b) equipment, materials, and tools to restore minimum operations at vehicle maintenance workshops in Kampala, Jinja, and Entebbe. Financing for acquisition of the equipment should be sought from ongoing reconstruction or technical assistance loans or from bilateral donors.
Training
4.8 IPA. Assistance to local authorities enabling them to improve their administrations and their financial management and revenue collection procedures has top priority as support to implementation of the Recovery Program. Directly linked to this issue is the training capability of the Institute of Public Administration. Expatriate teaching assistance, equipment, and materials will be required for at least two years to help restore the Diploma courses in Administration for Local Authorities and in Office Management and the Finance Officer's Diploma to effective operation. If the accounting diploma course can also be re-established, financing for similar teaching assistance and equipment would also be urgently required.
4.9 A New Course in Quantity Survey at Uganda Technical Collge. The College already provides two 3-year Diploma courses followed by a 2-year Higher Diploma course which trains building technicians suitable for employment in architects and engineers' offices, construction offices, and as inspectors and site foremen in the public and private sectors. A quantity surveying option could be introduced by modifying the syllabus to free up 8 hours per week for insertion of the new course. Initially, an expatriate course leader will be required together with materials and equipment.
4.10 Support for the Survey Tralning School. To accelerate the granting of titles to land, it is important to improve the effectiveness of the Survey Training School to enable it to take in more students and to re-introduce the course in Valuation. To achieve these objectives the School will need expatriate teaching assistance and equipment. - 40 -
4.11 A Nev Course in Teaching Methods at the National Teacbers Colnege. The teaching staff of the Survey Training School are seconded from government departments. Although they have the necessaryexpertise in their technical subjects,they usually have no previous teaching experience. It is recommendedthat a three-weekorientation course in teaching methods be establishedat the National Teachers College. This course would require two or three teachers from the College'sDepartment of ProfessionalStudies, and could accommodateabout 30 students.
4.12 NHUD. To assist with the reorientationof the Physical Planning Department,an adviser would be required for at least six months to (a) help in the consultationprocess with MPED, MLG, KCC and other agencies to reach a consensuson the broad outlines of the Department'snew functions; (b) prepare a detailed work program for the Departmentfor review and approval by MHUD; and (c) define the staffing and re-trainingrequirements of the Physical Planning Department.
4.13 KLC Trainlng. Management training in MLG should focus on improving staff knowledge of municipal finance operations and capacity in financial control. Training which must take place abroad should first consist of improving the financialand management skills of MLG inspectors. In this recard, the Glasgow District Council (U.K.) is offering trainingof 20 mid-career finance officers, as well as the possibilityof a 10-week lecture program in urban management at Kampala, with support from the British Council.
Regulations
4.14 Agent-clientContracts. Among the urban authorities,KCC is best placed to take the lead in discussionswith national agencies leading to written clarificationof roles and responsibilities. In order of priority, thc first two agreements to be signed should be:
a. KCC/Commissionerof Lands for land valuation, land registry, and plot attribution
b. KCC/MOW for road maintenanceand rehabilitationin Kampala.
Next, it is recommendedthat either Jinja or KCC hold discussionswith NWSC aimed at signature of a similar agreement for water supply and sanitation. The final agreementshould be concluded between KCC and MHUD for urban investment planning, in the view of the shift in mandate of the Physical Planning Department in this direction.
4.15 Central Control in Kampala. In recommending ways of removing the overlap in authorityamong MLG, KCC, and the DC Kampala, the Public Service Commissionwould need to ensure that all points of view are heard. In this regard, a series of technicaldiscussions with the agencies directly involved could precede the Commission's own deliberations.
4.16 Advisory assistance will also be required for the preparation of performance-orientedbuilding regulationsand for introductionof a new land tenure instrument. The process of introducingan OccupancyPermit would be most effective if technical staff from KCC and from the Commissionerof Lands' office drafted the legislationjointly in a working party. This group could also provide an implementationplan for changes in the initial land leasehold period for Kampala and in the frequencyof revision of ground rents. - 41 -
Small-Scale Brick Producers
4.17 ahe Ministry of Industry is in the early stages of developing a program of assistance to small-scale brick producers. Technical advisers would most readily be available from industrialized local producers like the Butendemission and Uganda Clays, greatly reducing the need for outside assistance. However,for financialaspects short-term advice would be required. The financialadviser would (a) design a trainingprogram for small-scaleproducers in accountingand record keeping,and (b) establisha cost-effectivecredit attributionand cost recoveryprogram in coordination with commercialbanks. Local authoritieswould make importantinputs related to the locationof brickmakingsites, creditworthinessof the recipients,and repaymentof the credits.
B. Medium-TernMasures 4.18 The followingmedium-term measures are recommendedto build on basic improvementsthat will result from the short-termaction program.The timing of these measureswould depend on the completionof the short-term tasks, and on general improvementsin the nationaleconomy. The medium term measuresshould be reflectedin the terms of referencefor the expnitriateadvisers, and compriseactions in (a) local governmentfinancial management;(b) local governmentadministration; (c) training;and (d) land and housing.
Local Government Financial ManmAement 4.19 The prioritymeasures for the medium term include:
a. Implementationof improvedrevenue collection systems and proceduresat Kampala,Jinja, and Entebbe Councils(paras. 2.24 - 2.30).
b. Initiationof a programto ensure that all businessesare identified,classified, and properlyrecorded for licensingpurposes in the recordsof Kampala, Jinja, and Entebbe councils(paras. 2.24-2.30).
c. Planningand initiationof a comprehensiveproperty rate administrationprogram. The programshould encompass the tax mapping of properties, design of uniform records management systems, property valuation policies and procedures,and relatedbilling and collectionsystems. The programshould be planned to encompassall local authorities,using Kampala, Jinja and Entebbeas pilot - 42 -
councils. It should be expected that only the planning and initiation of the program will be feasible over the next two to three years, and that completion of the program in the pilot councils will require additional time and technical assistance (paras. 2.28-2.29).
d. Preparation of revenue strategies and cash flow projections, to assess the levels of capital investments which can be afforded by Kampala, Jinja and Entebbe councils (paras. 2.15, 2.19, 2.21).
e. Reactivation of the Local Authorities Loan Fund as a source of development loan funds for relatively small projects. This fund should also include provision for accepting interest-bearing time deposits of available local authority cash reserves (para. 2.9)
f. Implementation of a strategy for increasing public deposits and the related mortgage lending capacity at HPCU. This should include an assessment of the feasibility of further raising interest rates on deposit accounts to make the company competitive with commercial banks. At the same time, an assessment should also be made of the feasibility of commercial banks entering the construction loan and home mortgage loan markets. The results of these efforts shoudd be incorporated into any national housing development program (paras. 2.39-2.42).
Local Government Administration
4.20 When tax collections have begun to improve and central-local roles are further clarified, several steps should be taken to improve the organization of council activities. One of the first of these is to formalize the informal working relations among Department heads by creating the Program Review Committee, which would furnish to the Development Committee of the council the justification required for proposed programs. Other measures include:
a. Creation of a Traffic Management and Transport Planning Section within the City Engineer's Department of KCC, responsible for implementation of traffic management measures and initiation of transport planning studies for the Kampala region (para. 3.3).
b. Review of proposals to legalize selected illegal markets, followed by implementation if approval is obtained from the Development Committee and the full Council. In this event, consideration should be given to establishing a Markets Section in the Public Health Department by - 43 -
separatingthis responsibilityfrom others of the current Food and Drug Section (para. 3.30).
c. Assessmentof the feasibilityof more private sector participationin solid waste management,especially in the centralareas of Kampalawhere privatefirms should be able to assume responsibilityfor collectionand disposal (para.3.29). Training
4.21 Settlement Technicians. As the economy revives and the demand for housing increases,low-income families will need skilledguidance to enable them to build improvedhouses for themselves. In this regard,the first priority for training over the medium term is to expand training capacity in the fields of highest immediate need (local administration, finance, accounting). Second, a new two-year higher diploma in Settlement Development should be considered at Uganda Technical College to meet the requirement for specialists to guide low-income families in housebuilding. The subjects to be taught would include social survey techniques, community development, site organization and administration, traditional and improved building techniques, and low-cost sanitation. There shoule be considerable emphasis on practical experience during the course. Diploma holders of a course of this kind would become technicians teaching practical methods of construction in rural and urban areas, and could be employed by MHUD or by local councils throughout the country.
4.22 RegionalDevelopment Speclalists. Concerncan be expected to grow, as the economy moves forward, about how to promote the development of specific regions of the country. The formulation of regional development policies is necessarily based on teamwork, since it blends the contributions of economists, geographers, statisticians, and all related skills. To this end, a one-yearpost-graduate course in Regional Development at Makerere University would help prepare specialists for employment at MPED, MHUD, and in offices of the District Commissioners. Five Departments (Geography, Sociology, Economics, Political Science, and Social Works and Social Administration) of the University could contribute to the teaching on an inter-disciplinary basis. There might be an annual intake uf 15-20 students. When fully established the course could also prove attractive to students from other countries.
Land and Rousing
4.23 Several medium term measures reflect the adoption of policies which give greater scope for private initiative in land servicing and house construction. In approximate order of priority, these include:
a. Issuance of a policy statement on civil servant housing that would clarify the tasks to be expected of central and - 44 -
local authorities, the prospects for an overall reduction of housing subsidies, and the feasibility of moving to a system of cash grants for government officers to obtain housing on the private market. Such a statement would indicate which new public-private in.tiatives ("reception area programmes," surveyed plots, etc.) would be prepared to implement the recommendations (paras. 3.41-3.42). b. Research on the cost of local building materials and their implications for maintenance. Ihese studies would include testing of current procedures and development of local materials, and would be aimed at broadening the range of options that meet acceptable performance standards. In order for these efforts to have the desired effects on production, the findings would need to be widely disseminated. The most effective means of dissemintion would be through the advisory service for small enterprises of the Ministry of Industry, as well as more directly through mass uedia and community demonstrations (paras. 3.44-3.46). c. Preparation by the Physical Planning Department (MHUD) of an Area Development Plan for the Namuwongo/Wabigalo/Kisugu districts of Kampala, reflecting comparisons of service standards with household incomes, proposals for recovery of on-site costs, and recycling of funds recovered into future operations (para. 3.43). d. Preparation of a restructuring plan for NHCC reflecting decisions on its role in policies toward civil servant housing and area development (para. 3.41). e. Proposals for ensuring the timely development of "mailo" land to accommodate the expansion of built-up areas within KCC (paras. 3.37-3.38). -45-
ANNEX 1 UGANDA Page 1 REPORTON URBANFINANCE AND MANAGEMENT
URBANPOPULATION TRENDS 1. More so than usual, averages of urban population movements in Uganda mask large differences between time periods, shifts in city boundaries,and changesin the definition of urban populations.All cities and towns grew substantiallyduring the 1960's,at an average rate of 9 percent betweenthe first two populationcensuses in 1959 and 1969. Kampala's growth was about equal to this average,although this was in part due to the 1968 extensionof the city limits. However,the expansionof several secondarytowns (Masaka,Nbarara, Kasese,Mpigi, and Mukono)was much greater.
2. As Annex Table 1.1 indicates,this pattern was interrupted during the military regime. As cities became dangerousplaces to live, the rural-urbanmigration that would normally be observedslowed dramatically. Many families left the towns to return to the rural economy. Recent census figures for Masaka, Mbarara, and especially Arua (see Annex Table 1.1) reflect the dislocations stemming from the 1979 overthrow of the military g,vernment. Even so, urban growth between 1969 and 1980, when the third populationcensus was carriedout, averaged 4 percent.3. In the absence of any populationfigures since 1980, an appreciationof currenturban growth must be based on sketchy,almost intuitive information. From these sourcesit appears that urban growth is picking up beyond the pace of the recent past, but does not equal the rate seen during the 1960's. It is plausibleto assume that growth rates for all urban areas are now about 5 percentper year, and for Kampalaabout 4 percent. However, if the security situation continues to improve, urban population growth could accelerate dramatically. It is not uncommon for capital cities in Africa to have been growing recently at 7-9% per year. If Kampala's growth averages 6%, it will have one million people by 1995, only a decade away. Annex 1 -46- Page 2
Annex Table 1.1: Urban Population Trends, 1959 - 1980
('000)
Annual Population Growth Rate cityl 1959/ 1969/ Town 1959 1969 1980 1969 1980
Kampala 146.0 330.7 458.5 8.5 3.2 Jinja 29.7 52.5 45.1 5.9 -1.3 Mbale 13.6 23.5 28.0 5.6 1.6 Masaka 4.8 13.0 29.1 10.5 7.6 Mbarara 3.8 16.1 23.3 15.5 3.4 Kabarole 8.3 7.9 26.8 -0.5 11.7 Arua 4.6 10.8 5.4 8.9 -6.0 Gulu 4.8 18.2 15.0 14.2 -1.8 .roto 2.1 5.5 8.1 10.1 3.6 Bombo - 0.6 5.6 - 22.6 Bushenyi - 1.0 2.1 - 7.1 Bundibugyo 1.6 2.9 2.3 6.1 -2.0 Entebbe 10.9 21.1 21.2 6.9 0.0 Edoia - 1.6 2.7 - 4.9 Iganga 3.1 5.9 9.9 6.7 4.9 Kasese 1.5 7.2 9.9 17.0 3.0 Kitgum 3.4 3.2 4.9 -0.6 4.0 Lira 2.9 7.3 9.1 9.7 2.1 Lugazi - 2.5 10.4 - 13.8 Luwero - 0.7 4.2 - 17.7 Masindi 1.6 5.2 5.0 12.5 -0.4 Moyo 2.0 2.6 3.2 2.7 1.9 Mpigi 0.6 3.4 4.6 18.9 2.8 Mubende 1.9 6.0 6.6 12.2 0.9 Mukono 0.5 3.6 5.8 21.8 4.5 NJeru 2.0 4.6 3.8 8.7 -1.7 Soroti 6.6 12.4 15.0 6.5 1.8 Tororo 6.4 16.0 16.7 8.5 0.4
Source: Ministry of Planning and Economic Development -47- Annex 2 Page 1 AN ESTIMATEOF INCOMEDISTRIBUTIONS FOR URBAN AREAS
1. The 1981 Rousing Survey conductedin 10 towns and partially completedfor Kampalaprovides the most recent informationon how urban incomes are distributed. However, the income classesinto which householls are assignedrange from USh 0 to 5,000 for the 10 tovns1 / and from USh 0 to 50,000 for Kampala. This range does not reflect the combinedeffects of domestic inflationand the floatingof the shillingsince 1981. To incorporatecurrent conditions more accurately,the income classesmust be substantiallyadjusted.
2. Withoutreliable benchmarks to assistwith this rajustment,the result can be little more than a first guess at the evolutionof money and real incomes in the recent past. The calculationspresented below sbould thus be viewed with a good deal of caution and taken as an approximate image of reality. The Kampala data have the additional drawback of being based on only seven neighborhoods. 2 J
3. The assumptionsreviewed with officialsof MHUDand used in the calculationsare the followLng:
a. The combinedeffect of inflationand float from early 1981 (when the Housing Surveywas conducted)to the end of 1983 raised domestic price levels by 350%;
b. In both Kampalaand the 10 towns, the top income class managed a small increasein real income,while the next class broke even;
c. Real incomes declined for all other income classes, with the declinebeing more pronouncedthe lower the income level;
d. At all income levels,the greater opportunitiesto earn extra income in Kampalamade the declines-inreal income less steep than in the 10 towns.
4. The percentageadjustments in each 1981 income class that are derivedfrom these assumptionsare given below:
I/ Jinja, Tororo, Nbale, Soroti,Lira, Gulu, Lugazi,Kabale, Kasese, and Kabarole. 21 Kasubi, Makerere,Mulago, Nakulabye, Bwaise, Kamwokya, and Wandegeya. These neighborhoodswere reportedto representlow to fairly high incomes. -48- Annex 2 Page 2 Kampala
Income Increase Class (USh) in Class
0- 2,000 200 2,001- 5,000 230 5,001-10,000 260 10,000-20,000 290 20,001-35,000 320 35,001-50,000 350 50,000 + 400
Ten Towns
Income Increase Class (USh) in Class 0-500 100 501-1000 133 1001-2000 166 2001-3000 200 3001-4000 275 4001-5000 350 5001 + 400
5. The resulting distributions for Kampala and for the 10 towns are shown in Annex Tables 2.1 and 2.2 below.
Annex Table 2.1: Income Distribution in Kampala, 1983
Income Percent of Cumulative Class (USh) Population Percent
0-6,000 5.7 5.7 6,001-16,500 19.5 25.2 16,501-36,000 25.0 50.2 36,001-78,000 24.8 75.0 78,001-147,000 13.4 88.4 147,001-250,000 4.2 92.6 250,001 + 7.4 100.0 100.0
Source: Based on 1981 survey of 7 localities within Kampala (Ministry of Housing and Urban Development). Annex Table 2.2. Incom.eDhstrLbutton Ln Ton Urban Coenterst,1983 (percentof population)
Income Jinja Tororo 1'bale Soroiti Lira CuIu Lugazi Kabala Kesase Kabarale Class -(Ush)
0-1,000 3.1 M3. 5.5 3.8 - - 11.5 9.5 6.2 39.2
1,001-2,330 19.2 28.6 20.9 36.8 22.3 16.4 33.8 11.5 22.3 20.8 2,331-5,320 39.8 32.4 25.6 27.9 30.8 32.8 23.1 33.0 23.4 20.0 5,321-9,000 23.6 14.8 23.2 14.0 23.1 30.1 11.5 24.0 16.2 8.1 9,001-15,000 7.7 8.2 14.2 3.7 9.2 11.0 10.0 10.0 6.9 4.2
15,001-25,000 2.2 1.2 5.1 7.4 6.9 5.6 9.3 3.0 8.4 2.7 25,001 + 4.4 1.6 5.5 4.4 7.7 4.1 0.6 9.0 14.6 5.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
8ourgee: Based on 1981 hiousing Survey (Ministry of Housing and Urban Developmeant). - 50 -
Annex 3
Revenue and Expenditure, Jinja Municipal Council, 1981-1984
(UShs thousands)
1981 1982 1983 1984
UShs z UShs z UShs Z UShS % RT&VENUE
Income from 21,462 44 60,451 58 103,007 64 126,515 51 Services
Block Grants 14,799 30 21,493 21 33,776 21 44,422 18
Graduated Tax 9,054 18 18,082 17 18,200 11 68,006 28
Property Rates 2,879 6 2,929 3 2,930 2 5,232 2
Licenses and Other 913 2 1,020 1 2,753 2 2,578 1
Total 49,107 100 103,975 100 160,666 100 246,753 100
EXPENDITURE
Civil Works 19,906 40 40,306 39 53,843 33 62,995 26
Administration 15,067 31 33,751 33 51,090 32 61,209 25
Public Health 11,792 24 20,870 20 35,194 22 43,202 17
Education 1,200 2 2,543 2 8,262 5 11,410 5
Other 903 2 2,620 2 11,409 7 16,893 6
Total 48,868 99 100,090 96 159,798 99 195,709 79
Surplus 239 1 3,885 4 868 1 51,044 21
Note: 1981, 1982: Audited accounts 1983: Estimates 1984: Forecasts. -51-
Annex 4
Revenue and Expenditure, Entebbe Town Council, 1981-1983
(UShs thousands)
1981 1982 1983 UShs Z UShs z UShs % REVENUE
Block Grants 8,727 53 17,000 60 18,000 55
Graduated Tax 5,124 31 7,800 27 7,800 24
Market Rents and Dues 789 5 1,135 4 2,500 8
Property Rates 826 5 968 3 968 3
Licenses and Other 966 6 1,649 6 3,361 10
Total 16,432 100 28,552 100 32,629 100
EXPENDITURE
Civil Works 6,223 38 9,820 34 11,168 34
Administrative 5,935 36 9,362 33 9,772 30
Public Health 2,338 14 5,139 18 4,652 14
Education 1,065 6 2,530 9 3,620 11
Other 871 6 1,701 6 2,483 8
Total 16,432 100 28,552 100 31,695 97
Surplus -0- -0- -0- -0- 934 3 .ers== =e=. fr all =
Note: Estimates for all years. -52- Annex 5 Page 1 HOUSING FINANCE COMPANYOF
UGANDA: HISTORYAND CURRENT CONDITION
History of HFCU operations
1. The companywas incorporatedin 1967 with capital of UShs I mill- ion contributed60% by the CommonwealthDevelopment Corporation (CDC) and 40Z by the NationalHousing and ConstructionCorporation (NHCC). The company was formedby transferringthe Ugandanassets and liabilitiesof the First Permanent (East Africa), Ltd., to HFCU. First Permanent was a building society operating in Kenya, Uganda and Tanzania. The initial mortgage assets of HFCUwere about UShs 8 million,and public deposits amounted to UShs 15 million. In 1968, a formal agreement was reached whereby CDCand NHCCwere to provide additionalcapital throughloans of 500,000 British Pounds and UShs 3 million, respectively, subject to the passing of legislation to allow HFCUto repossess properties mortgaged to it. During this same year, applicationswere acceptedfor new mortgages, and the company began a policy of encouraging development of housing estates in the main urban areas with a view to reducing building costs. During 1969 the share capital of the company was doubled to UShs 2 million and the shareholder's equities of CDC and NHCCwere equalized at 50% each. By the end of 1970 the companywas operatingprofitably, and in 1972 another loan agreementwas reachedwith CDC for 1.25 million British Pounds,most of which was to be used to financemortgages on a housing estate developedby CDC. However,this loan, as well as the 1968 loan agreementswith CDC and NHCC, were never executedbecause the governmentdid not pass the legislationto allow HFCU to repossessproperties when borrowersdefaulted. Hence, HFCU has conducted its businessrelying only on its initial share capitaland public deposits. Both the 1968 and 1972 loan agreementshave since lapsed.
2. Key financial data depicting the operations of HFCUfrom 1974 through 1982 are shown in Annex Table 5.1. Estate development activity in Uganda was slow in the late 1960s,and then stagnatedand declinedthrough the 197 0s to the present. The mortgage asset position of HFCUincreased only from UShs 38 million to UShs 132 million from 1974 to 1982, while the number of mortgage accounts actually declined some 35% during the same period. This decline in accounts was caused mainly by loan defaults resulting from failure to completeconstruction projects. The company has been providing80% bridgefinancing to developersduring construction, since the commercialbanks have not wanted to make these loans becauseof the risks involved. Severe shortages of building materials beginning in the 1970s prevented completion of much construction which was on land leased to the developers by councils. If development was not completed within two years, the land reverted back to the councils, prompting the defaults and leaving EFCUwith no collateral with which to recover loan losses. Nevertheless, public deposits with EFCU grew at a faster rate than mortgage loans, enabling the company to realize operating profits from -53- Annex 5 Page 2
Annex Table 5.1: Housing Finance Company of Uganda:
Key Financial Data
(UShs thousands)
Number of After-tax Year Mortgage Mortgage Public Operating End Accounts Assets Deposits Profit (Loss)
1974 530 38,119 49,280 848
1975 529 40,411- 61,015 1,076
1976 450 49,068 74,776 875
1977 414 71,200 96,703 769
1978 492 95,000 115,974 1,008
1979 558 112,284 178,678 1,213
1980 543 117,-236 233,559 190
1981 423 130,003 343,863 (44,714)
1982 346 132,250 436,230 (33,534)
Year-End 1983 Estimates (USh '000):
Fixed assets (less depreciation) 164,000
Mortgage assets (less provision for unsecured loans) 89,000
Short-term inwestments 222,000
Accounts receivable and cash 50,000
Current liabilities 18,000
Public deposits 477,000
Operating profit 8,000
Reserves 77,000
Capital 2,000 ANNEX 5 -54- Page 3
short-term investments from 1974 through 1980. The growth of public deposits was due partly to public confidence in the company to safeguard small deposits during turbulent times.
3. After HFCU was established in 1967, CDC provided needed management and consultancy support. But, as relationships cooled between Uganda and Britain during the 1970s, this support was withdrawn. At the same time there occurred the out-migration of trained financial staff from Uganda. The consequence was a deterioration of accounting systems and controls in HFCU. A series of frauds and misappropriations began to accumulate until they were uncovered in 1981-82 routine audits of HFCU records by independent accountants. The consequences were substantial losses reported by HFCU in 1981 and 1982.
4. CDC resumed technical assistance to HFCU in 1981, providing a consultant who served as the company's Chief Accountant for one year. During this time significant improvements were made in reconciling and updating the books of accounts. CDC then provided a follow-up team of four financial experts during 1982-83 to establish better controls, and to make further recommendations for improving accounting systems, general financial management, and staff training.
Current Management and Financial Prospects
5. The management of HFCU is working toward implementing the CDC consultants' recommendations. The company's accounting machines (NCR 299s), while old and outmoded, are functioning to keep deposit and loan ledgers up to date. These ledgers can now be reconciled to control-accounts, and overall internal controls are being strengthened. A new general manager has been appointed, and new supervisory personnel have been recruited. A recent report by one of the CDC advisors concluded that this new management team can sustain the operational improvements realized in 1983.
6. The company suspended mortgage operations in 1982, and in 1984 reintroduced mortgages of not more than UShs 1 million to enable developers to complete unfinished buildings. The floating of the Uganda Shilling produced a sharp depreciation of the Shilling, which in turn inflated the cost of construction to the point where HFCU's deposits could not support future loans. A house which would have cost UShs 1.5 million before the float, cost about UShs 10 million afterward. Also, people's incomes have not kept up with inflation, and will not qualify them for even modest residential loans. Finally, the rate of default was noticeably high even before the Shilling was floated.
7. Based on estimates of key financial data for HFCU at year-end 1983 (see Annex Table 5.1), the short-term liquidity ratio is expected to be about 2.8, a conservative and safe position. Mortgage asset amounts will have been reduced by one-third to reflect further defaults of unsecured loans. At the same time public deposits are expected to have grown about 10% over 1982. The ratio of loans to deposits is expected to be about 1 to 5. With normal lending activity, loan amounts should about -55- Annex 5 Page 4 equal deposits, depending on loan and deposit maturity schedules. The existing low ratio of loans to deposits means that the major revenue source of the company continues to be short-term 4nvestments. The company expects to realize an operating profit of about UShs 8 million in 1983 from these investments. The existing share capital of UShs 2 million is the original amount from HFCU's incorporation in 1967, and has been rendered negligible in face of the Shilling depreciation. However, the company has about UShs 77 million in reserves which provides adequate capitalization coverage for present loans. &muy of Uibui HoI4g amd bawmuta Cnditim, 1981.
A of Stgxtue (2) 2 with Siitatkin (2) huuuy to Vat (Z) PWuatI5 ft hoA Z Om_ _- Amkest Wt r-- t Ton110_ an Lg rmmt 1_i TnW0 r Pipedr lbatrine Faot la
Jlnja 45,000 5. 12 17 62 21 17 50 42 72 6
TXo 17,000 5.8 63 64 25 42 33 53 6 85 65 4
Ibaa 28,0 5.4 29 :0 a) 60 20 68 18 70 75 7
xboti 15,000 5.2 a) 23 Mi 67 7 68 31 6Z 76 17
Lz 9,000 6.5 36 45 56 19 27 19 78 67 21
QAU ISOOOD 6.5 14 2S 45 36 19 66 38 44 94 2
1Ltd 10,500 4.3 69 19 35 47 *18 5 - 95 85 4
KimIe 21,500 5.7 56 5B X 56 14 34 16 83 89 14
1mm 10,000 5.4 22 29 45 33 22 87 42 52 87 8
Kbo1a 27,000 5.9 78 12 4 67 29 28 3 90 8D 12
9ir: Hinhtry of 1uoirg mmkU eiA2o =t, mg S&Wy 1981. 1larmrwo1 -57- Annex 7
URBANMANAGEMENT TRAINING
REQUIREMENTSAND INSTITUTIONS
A. TrainingRequirements
Local Authorities
1. In order to obtain up to date informationregarding the staff situationin urban management,questionnaires were suppliedto the Kampala, Jinja, and Entebbecouncils to record the employmentsituation in their departmentsand the need for training. The resultsare tabulatedin Annex Tables 7.1-7.3. It should be noted that trainingneeds are identifiedin relationto existingvacancies rather than to requirementsover the medium term, which cannot now be accuratelydetermined.
2. Kampala. In the KCC Town Clerk'sDepartment, while there are 87 en- forcementassistants in post, vacanciesexist for another63. No City Advocate,Assistant City Advocate,or SeniorPersonnel Officer is presently in post. In the City Treasurer'sOffice serious deficienciesat middle managementand senior technicallevels persist, especially in the Graduated Tax and Audit sections. There are substantialvacancies in the Rates and ValuationSection, and vacanciesfor 8 accountantsat differentlevels. The City Engineer'sDepartment lacks 18 buildinginspectors, 9 foremen of works, 11 planners,and 18 land inspectors. Similarly,vacancies in the the Public Health Departmentoccur in all departmentsin a range of positions. The Public Health Laboratoryhas one person, leaving10 vacancies. The Nursing sectionhas 44 midwives,but also 32 vacancies. Especiallycritical from the standpointof environmentalhealth is the absence of 13 seniorhealth inspectors,and 35 vector controlofficers and foremen of variousgrades.
3. Althoughon a much smallerscale, the situationin Jinja and Entebbe is as seriousas that for Kampala. In Jinja the Town Clerk'sand Treasurer's departmentsemphasized the need for trainingof personnelin all sections. The Treasurer'sDepartment in Entebbestressed the need to train its staff in local authorityfinance, assessment, collection, and tax management.
Central Government
4. Ministryof Housing and Urban Development. The presentstaff of the Physical PlanningDepartment is very modest consideringthe role assigned to it. There is a need for many more well-trainedtechnicians to supplementthe work of the existingstaff. These requirementswill increaseif, as is suggested,the Department'sactivities are redirected toward urban investmentplanning. The Departmenthas at present 15 qualifiedplanners. Two geographersand one sociologistare attending Annsx7 58- pag-ue
Annex TabLe 7.1: Staff tn Pose and Vacancieas Kamala City Council, 1983
---- Staff in Post------Vacanct- Mid- Mid- Departmnt/Unit Senior Level Support Senior Level Support
A. Town Clerk
Adminincraeton 2 8 1 4 8 6 Welfare 2 20 - 3 7 Houstng - 5 - 1 7 Enforcement/eecurity 2 13 87 2 12 63 FieldAdminatcration - - - 2 7 Legal I - 2 44 Establishuent/permonnel - - - I
Sub-Total 6 47 88 15 45 69
B. City Treesurer
Administration 4 44 e2 1 21 14 Purchasing/stores 4 3 11 2 7 2 Graduated Tax 5 15 16 5 248/ 2 Rates/Valuation 6 15 25 1 8b 15s 14 Parking - I 10 3 A 5 Audit 4 10 1 4 7 3 Accountancy 4 11 9 4 10 10
Sub-Total 27 99 134 37 88 50
C. City Engineer and Surveyor
Miinistration 8 - 13 1 2 2 Development Control 4 A 9 9 21c/ 12 Main Drainage 1 - - 7 4 3 Traffic Slgnals. Electricity 1 13 - 5 9 2 Traffic Engineertng - - - 2 27 1 Transport, Plant I 8 1 4 18 3 Depot, Maintenance 1 9- 3 12 Town PlanaLng 1 - 2 a I Highway Maintenance 2 17 7 5 21d/ 6 Design 4 A - 6 3 6 Stone Quarry I - - 1 12 2 Architectural - 7 - 6 5 I Puhlic Land Control 2 17 - I Is 2 Parks. Open Spaces _ 6 I 1 4Ae/ 9
Sub-Total 26 85 31 53 201 52
0. Public Health
AdminIstration 3 63 3 2 31 1 Laboratory - - - 3 luraing 6 o7 - 3 48 Clinic, general 3 10 - 6 23 Vector control 2 56 1 1 28f 10 Water. drainage, sanitation 3 IB 6 1 10 4 Health Education 1 5 2 8 4 1 Food Drugs S IOZS/ - 1 2 - Cemeteries I I - - 5 3 Cleansing 2 5 - 1 -
Sub-Total 27 327 10 30 I58 22
TOTAL 86 558 263 135 492 193
Mote: Senior qtaff: Chief officers. deputtes, principal officera Mid-level staff: Aestatant officers. inspectorsa foremen Support staff: Clerical, stenographers. typitecs
Including a/ 16 Senior Clerical Officers K1 In Executive Officera (Rates) and 5 Valuation Officers 'E 18 Bluilding Inspectors T/ 15 Foremen V1 32 Fo remen T/ 16 Sanitary Overseers T/ 82 Market Masters - 59 -
Annex 7 Page 3
Annex Table 7.2: Staff in Post and Vacancies, Jinia Municipal Council. 1983
--- Staff in Pout------Mid- Mid- Department/Unit Senior Level Support Senior Level Support
A. Town Clerk Entablishmenc 7 20 8 3 5 4 Housing 7 4 1 1 4 4 Enforcement 4 a 4 - - Lands - 2 2 - 2 2
Sub-Total 18 34 19 8 11 10
B. Municipal Treasurer Secretariat - 2 6 - 1 3 Audit 2 2 - 3af 1 - Supplies - 8 - - 3 - Education Accounts 3 - - 3 - - Expenditure 7 1 - - - - Graduated Tax 7 5 1 - - - Gceneral Revenue 2 1 - - - - Income 2 2 - I I - Valuation 1 1 - I I - Markets 2 3 2 1 - -
Parking _ 2 1 1 - -
Sub-Total 26 27 10 10 7 3
C. Municipal Engineer
Addinistration 5 6 6 5 7 - parks 1 2 - - 4 - Roads - 4 - 1 7 3 Street Lighting -- -- - Utility Yard -- I - 1 - Electric. Building - 4 - - 8 3 Carpentry workshop - 5 - - - 9 Nechanical 1 3 - 1 9 3 Architectural - 1 2 _ _ _
Sub-Total 7 25 9 8 36 18
D. Public Health
Inspectorate 3 3 - - - - Markets 2 1 2 1 - I Vector Control - - - - 2 _ Cleansing 1 1 - - 1 - Health Visitors 1 8 - 1 5 - Health Education 1 - - - - - Clinics 3 29 - 3 5 - Abattoir I I - _ I1
Sub-Total 12 43 2 5 14 1
TOTAL 63 129 40 31 68 32
Note: Senior staff: Chtef officers, deputies, principal officers Mld-level staff: Assistant officers, inspectors, foremen Support staff: Claerical, stenographers, typists
*/ For external audits. - 60 -
Auex 7 Page 4
Annex Table 7.3: Staff In Post and Vacancies, Entebbe Town Council, 1983
-- Staff in Post Vacancies Mid- Mid- DepartmentJUnit Senior Level Support Senior Level Support
A. Town Clerk
Town Clerk 2 4 8 - - Enforcement - 13 - I 1 Chiefs 4 4 - - - Land - 2 - - - Rousing -I 1 _
S&b-Total 6 24 14 2 1
B. Town Treasureral - - - 2 3
C. Town Engineer 1 7 6 - -
D. Public Health
Health Inspections 1 4 - - 7 Health Visitors - 5 - - 3 Nursing - 3 - 3 Vector Control 3 _ 2
Sub-Total 1 15 - - 15
E. Education 3 - 5 - -
Total 11 46 25 4 19 2
Note: Senior Staff: Chief officers, deputies, principal officers Mid-Level Staff: Assistant officers, inspectors, foremen Support Staff: Clerical, stenographers, typists a/ Appointments to be confirmed. - 61 - Annex 7 Page 5
planningcourses abroad, while two engineersand one architectare being trainedin-house prior to being sent to planningcourses abroad. The other higher-levelstaff consistof two geographers,two sociologists,one statistician,and one economist. At presentthe Department'sactivities are wholly centeredon Kampala. Through both expansionand retrainingof staff, the Department'scapacity needs urgent improvementto providesound advice and assistancein urban investmentplanning to city and town councils.
5. Reconstruction and DevelopmentCorporation. The Corporationwas established in 1981 to plan and manage the reconstructionof the towns of Masaka, Mbarara, and Arua damaged during the 1979 war, as well as to stimulate their development. Of the 66 established positions, only 8 have been filled. Ten technicaladvisers financed by UNDP and furnishedthrough the UN Centre for Human Settlementsreinforce the small staff complement. There is an acute shortageof architects,economists/financial analysts, engineers,planners, and surveyors.
B. TrainingInstitutions
Instituteof Public Administration(IPA)
6. Formed in 1967 and supervised by the Ministry of Public Service and Cabinet Affairs, IPA is the basic training agency for Ugandan civil servants. Teaching is organized in five divisions:
a. PublicEnterprise Management Division: Post-graduate Diploma Certificate in Business Management; Management and Development Training Program
b. Public Administration Training Division: Post-graduate Diploma in Public Administration; Diploma in Nursing Administration; Diploma in Income Tax Administration; Project Planning and Management Program; Performance Improvement for Secretaries
c. Learning Resource- Development Division
d. Library and Documentation Division
e. School of Journalism. 7. By December 1982 IPA had trained about 16,000 students in the various divisions. The bulk of the students, some 13,000, were trained in short courses and seminars. Courses of most relevance to urban management-the Uganda Finance Officers' Diploma and diplomas in Administration for Local Authorities and in Office Management-- trained over 350 students before being removed from the program in 1981. The three-yearcourse leadingto a Diploma in Accoun.ancy was also discoutinued at that time, without explanation. Deteriorated buildings, lack of equipment, and teacher vacancies amounting to 70% of available positions - 62 - Annex 7 Page 6 have resulted in sharply reduced programs which now include only 126 students against a maximum intake capacity of 250. IPA has requested the services of expatriate lecturers financed by UNDP and by the Commonwealth Fund for Technical CDoperation to keep its remaining programs in operation.
8. Fortunately, restoration of IPA programs is being given high priority. The Ministry of Public Service and Cabinet Affairs is trying to have the Accountancy diploma course reinstated, and is considering measures aimed at making salary levels more attractive. Repair and renovation of buildings and restoration of equipment will be carried out under the Second IDA-assisted Technical Assistance Credit approved in December 1983. Finally, the Finance Officer's Diploma and the diplomas in Office Management and Local Authorities Administration are being re-established as of July 1984.
Management Training and Advisory Centre
9. The Centre was established in 1969; it reports to the Minister of Industry. Every year a large number of short courses (mostly 2 to 3 weeks) are provided in all areas of management including office' management, personnel management, principles of accounts, financial management, training of trainers, and accounting for non-accountants. Some 700 to 1,000 participants attend courseseach year. Only 20 teachers out of 45 are currently in post. Although the courses relate mainly to Industry and commerce, the Centre is also interested in training staff of local authorities and other central government ministries. In this sense its work is complementary to that of IPA.
Uganda College of Commerce
10. The College provides three post 'A7-level courses leading to a Diploma for chartered secretaries and administrators, and diplomas in Marketing and Business Studies. Some 600-700 studentstake part in these courses. There are also post 0"-level courses in stenography and part-time courses in stenography, commercial subjects, and accountancy. The College has had difficulty retaining qualified teachers for the more advanced post "A'-level courses. Although most students prepare for careers in commerce and industry, the course work is relevant to the requirements for clerical staff of local authorities and other central government ministries.
Uganda Technical College
11. The Department of Civil Engineering and Building of the College provides basic diplomas in Civil Engineering and Building and in Architectural Draftsmanship. The College also offers a Higher Diploma in Construction, a two-year full time course which trains building technicians. The annual intake is about 30 students. - 63 -
Annex 7 Page 7
Technical Schools and Institutes
12. Training of skilled craftsmen is the responsibility of 23 TechnicalSchools and 16 TechnicalInstitutes. The former providethree- year basic technicaltraining in eight subjectsincluding carpentry, brickwork,and electricalinstallations. The latter providemore advanced training (two-yearcourses) in similarsubjects. The teachersare trained at the Uganda TechnicalCollege in a one-yearfull time technicalteachers course. There is at presenta shortfallof about 170 teachersin the TechnicalSchools and Institutes.
Survey TrainingSchool
13. Operatedby the Ministryof Lands, Mineralsand Water Resources,the SurveyTraining Schooloffers three-yeardiploma coursesin land surveying,valuation, and cartography. Partlybecause of a severe shortage of teachers,there have been no studentsin valuationfor the past three years, and only 80 studentsare currentlystudying land surveyingand cartography. The buildingsare badly maintained,and the school suffers from a shortageof equipment,books, and transport. -64-
ANNEX 8 Page 1
SELECTED SOURCE LIST OF REPORTS AND PAPERS
1. Auditor's Reports, National Housing and Construction Corporation, 1978- 1982.
2. H.P. Gauff Consulting Engineers, Feasibility Study reports for World Bank-assisted Water Supply and Sanitation Rehabilitation Project, September 1982.
3. G. Glentworth, I. Mackinson, and C. Batala, "Public Administration in Uganda: Support for the Four Central Guidance Ministries and the UIPA," March 1984.
4. Kampala City Council, 'Procedure for Collecting Revenue and Spending of Funds by the Town Clerk's Department," October 1983.
5. Kampala Development Plan, Structure Report, April 1972.
6. Anthony Lubega, "The Financing and Production of Private Houses in Urban Districts of Kampala," December 1969.
7. Ministry of Industry, "Strategies for Spreading Small-scale Industries in Uganda," conference report, 1981.
8. Ministry of Local Government, Urban Authorities Association of Uganda, The Storage, Collection, and Disposal of Refuse in Urban Areas of Uganda, Kampala, March 1983.
9. G.T. Mwesigye, Administration of Access to Basic Services in Kampala, M.A. Thesis, Development Planning Unit, University College London, September 1983.
10. Papers prepared by Government in conjunction with the Study of Urban Finance and Management, 1983:
Capital financing of local government programs Development codes and building regulations General assessment of the housing situation Housing Finance Company of Uganda: Retropective review and future programme Low cost sanitation Materials industries for low income housing and basic infrastructure National housing -policy Preparation and approval of urbanization policies Refuse collection and disposal Road maintenance Roles and responsibilities for urban policies and programmes Survey of manpower requirements and training facilities for urban technical and managerial staff The new administrative centers: their needs and requirements -65- ANNEX 8 Page 2
Trends in urban population Urban housing (NHCC) Valuation, rating, and collection of local taxes
11. Reconstruction and Development Corporation, "Working Paper: Immediate Requirements," Masaka, November 1983.
12. Schroeder-Planung consulting engineers, Kampala City Roads Study, 1983.
13. Michael L. O. Stevens, "Review of Planning and Economic Management Machinery," consultant report prepared in connection with the Third IDA Reconstruction Credit, London, November 1983.
14. Terraplan consultants, Outline Structure Plan for Masaka, Uganda UN Centre for Human Settlements and Reconstruction and Development Corporation, November 1983.
15. Alfred P. Van Huyck, "Housing Policy Review in Uganda," PADCO and Office of Housing and Urban Programs, USAID, June 1984.
16. F.G. Weaver and I.R. Lane, "A Pre-Investment Appraisal Mission for Uganda National Housing Development Programmes," UN Centre for Human Settlements, January 1982. -~[X
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