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Poverty Eradication Action Plan (2004/5-2007/8)

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Poverty Eradication Action Plan (2004/5-2007/8) © 2005 International Monetary Fund August 2005 IMF Country Report No. 05/307 Uganda: Poverty Reduction Strategy Paper Poverty Reduction Strategy Papers (PRSPs) are prepared by member countries in broad consultation with stakeholders and development partners, including the staffs of the World Bank and the IMF. Updated every three years with annual progress reports, they describe the country’s macroeconomic, structural, and social policies in support of growth and poverty reduction, as well as associated external financing needs and major sources of financing. This country document for Uganda, dated May, 2005, is being made available on the IMF website by agreement with the member country as a service to users of the IMF website. To assist the IMF in evaluating the publication policy, reader comments are invited and may be sent by e-mail to [email protected]. Copies of this report are available to the public from International Monetary Fund • Publication Services 700 19th Street, N.W. • Washington, D.C. 20431 Telephone: (202) 623-7430 • Telefax: (202) 623-7201 E-mail: [email protected] • Internet: http://www.imf.org Price: $15.00 a copy International Monetary Fund Washington, D.C. Poverty Eradication Action Plan (2004/5-2007/8) Ministry of Finance, Planning and Economic Development P.O. Box 8147 Kampala Website: www.finance.go.ug i Ministry of Finance, Planning and Economic Development P.O. Box 8147 Kampala Website: www.finance.go.ug © 2004 ii iii THE REPUBLIC OF UGANDA FOREWORD Over the last 19 years, Government has implemented policies geared towards eradicating poverty among our people. These policies have led to a substantial reduction in poverty levels from 56% in 1992 to 38% in 2003. More needs to be done to ensure that all Ugandans move and stay out of poverty. In 1997 the Poverty Eradication Action Plan (PEAP), a framework for addressing the key poverty challenges, was developed and launched. During the process of implementation, new challenges arose which led to the first revision of the PEAP in 2000. In the current revision, Government has taken stock of the achievements so far attained and the remaining challenges. The challenges include the following: (a) to consolidate national security, deal with the consequences of conflict, and improve regional equity; (b)to restore sustainable growth in the incomes of the poor; (c) to build strong social and economic infrastructure; (d) to enhance human development; and (e) to use public resources more efficiently. Over the next three years, Government will focus its attention on addressing these challenges. In addition, government will concentrate on areas that will have a major impact on Uganda’s economic transformation. For example, Uganda needs to expand agricultural output through increasing farm productivity and household incomes. Government also needs to strengthen the export sector to be able to access international markets. I am pleased to note that the PEAP has become an important vehicle for policy coherence. This has been manifested through the wide consultative process that has involved many stakeholders including, development partners and civil society. I wish to express my appreciation to all those who worked tirelessly to produce this document. Finally, I urge all the citizens of Uganda and development practitioners to use this policy document in steering our efforts to eradicate poverty. Yoweri Kaguta Museveni PRESIDENT OF THE REPUBLIC OF UGANDA ii iii Contents Abbreviations and Acronyms ................................................................................... x Executive Summary .............................................................................................. xv 1 Introduction ................................................................................................ 1 1.1 The Poverty Eradication Action Plan ............................................... 1 1.2 Government’s strategy for poverty eradication ............................... 2 1.3 Pillars and priorities ....................................................................... 5 1.4 Cross-cutting issues ....................................................................... 6 1.5 Roles of the state, the private sector and other partners ................... 8 1.6 The PEAP and international initiatives ............................................ 10 1.7 Structure of the PEAP ..................................................................... 10 2 Poverty in Uganda: Trends and Patterns ............................................... 12 2.1 Income, poverty and inequality ........................................................ 12 2.2 Who are the poor? ........................................................................... 18 2.3 Structural transformation and poverty reduction ............................. 21 2.4 Human development outcomes ........................................................ 26 2.5 Access to public services and infrastructure ................................... 28 2.6 Empowerment .................................................................................. 29 2.7 Policy implications .......................................................................... 30 3 Economic Management ............................................................................. 31 3.1 Uganda’s growth performance ........................................................ 31 3.2 Macroeconomic Management ......................................................... 34 3.3 Tax Policy ........................................................................................ 43 3.4 Financial Sector ................................................................................ 45 3.5 Investment & Trade Policy .............................................................. 47 4 Enhancing production, competitiveness and incomes ............................ 51 4.1 Government’s strategy for increasing production, competitiveness and incomes .......................................................... 51 4.2 Boosting production, incomes and competitiveness ....................... 53 iv v 4.3 Public expenditure priorities for production, competitiveness and incomes ..................................................................................... 92 5 Security, Conflict Resolution and Disaster Management ...................... 99 5.1 Overview ........................................................................................ 99 5.2 Security and Defence ..................................................................... 99 5.3 Conflict-resolution .......................................................................... 102 5.4 Disaster Preparedness and Management ........................................ 105 5.5 Planning for the aftermath of disaster and insecurity .................... 111 5.6 Public expenditure implications for security, conflict-resolution and defence ..................................................................................... 114 6 Good Governance ..................................................................................... 115 6.1 Democracy, Human Rights and Political governance .................... 115 6.2 Justice, Law and Order ................................................................... 121 6.3 Managing the public sector ............................................................ 127 6.4 Public expenditure priorities for governance .................................. 143 7 Human Development ................................................................................ 147 7.1 Introduction ..................................................................................... 147 7.2 Education and Skills Development ................................................. 153 7.3 Health .............................................................................................. 162 7.4 Water and sanitation ....................................................................... 168 7.5 Social Development Sector ............................................................. 173 7.6 Public expenditure priorities for human development .................... 180 8 Public expenditure to implement the PEAP ........................................... 185 8.1 Introduction ..................................................................................... 185 8.2 Public expenditure and poverty eradication spending: 1997-2003 ....................................................................................... 186 8.3 Criteria for public expenditure allocation ....................................... 190 8.4 Funding PEAP expenditure priorities .............................................. 192 8.5 Sectoral allocations ......................................................................... 198 8.6 Strengthening Budgeting at the Sector Level ................................. 201 8.7 Rationalising public sector structures ............................................ 206 iv v 8.8 Donor support for public expenditure ........................................... 211 8.9 Conclusion ...................................................................................... 212 9 Monitoring and Evaluation of the PEAP .............................................. 214 9.1 Introduction .................................................................................. 215 9.2 Challenges for monitoring and evaluation ...................................... 216 9.3 Government’s strategy for addressing the current weaknesses in the M&E Framework .................................................................
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