Public Expenditure Review Phase 3

AGRICULTURE SECTOR PUBLIC EXPENDITURE REVIEW

PHASE THREE: EFFICIENCY AND EFFECTIVENESS OF AGRICULTURAL EXPENDITURES

DRAFT

Submitted to:

Ministry of Agriculture, Animal Industry & Fisheries

January 2009

Economic Policy Research Centre (EPRC) 51 Pool Road Campus, P. O. Box 7841 , Uganda Tel: 256-41-541023, Fax: 256-41-541022, Email: [email protected]

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 1. Executive Summary ...... 1 2. Summary indicator matrix of all projects and programs.... Error! Bookmark not defined. 3. Introduction...... 18 4. Study approaches and methods ...... 19 5. North West Smallholder Agricultural Development Project (NWSADP)...... 42 6. National Livestock Productivity Improvement Project (NLPIP)...... 58 7. Pan African Control of Epizootics (PACE) ...... 68 8. Farming in Tsetse Controlled Areas (FITCA) ...... 71 9. Area based Agricultural Modernisation Project (AAMP)...... 75 10. Farm Income Enhancement and Forest Conservation Project (FIEFCOP)...... 81 11. National Agricultural Advisory Services (NAADS)...... 85 12. Agricultural and Marketing Support Project...... 96 13. Non-sectoral Conditional Grant (PMA)...... 99 14. Agricultural Extension Conditional Grant ...... 104 15. Dairy Development Authority...... 106 16. Uganda Coffee Development Authority ...... 111 17. National Agricultural Research Organisation ...... 116 18. National Forestry Authority (NFA)...... 120 19. Vegetable Oil Development Project (VODP) ...... 123 20. The Fisheries Development Project ...... 127 21. Support to Irrigation...... 133 22. Northern Uganda Social Action Fund...... 137 23. Cotton Development Organisation...... 142 24. General perspectives on PETS in MAAIF...... 144

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LIST OF FIGURES

Figure 1: Funding Flows in the Agriculture sector from Donors through central government and districts to the service providers...... 41 Figure 2: AAMP expenditure by main components over the years (2002-2008) ...... 79 Figure 3: Comparison in allocation of funds in Tororo and ...... 106

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LIST OF TABLES Table 1: Sample projects by their share in MAAIF development budget and sample districts ...... 21 Table 2: Recurrent budget of MAAIF, Shs(m) ...... 24 Table 3: Approved wage and non-wage recurrent budget, Shs(m)...... 24 Table 4: Recurrent budget allocations across MAAIF departments, Shs mill...... 25 Table 5: Recurrent budget of Headquarters, Shs mill ...... 26 Table 6: Development and recurrent budget of MAAIF, Shs mill...... 30 Table 7: Economic composition of development budget by sector, Shs(m)...... 30 Table 8: Proposed MAAIF budget allocations in relation to DSIP proposals ...... 32 Table 9: Number of cattle distributed and their Performance in various districts ...... 33 Table 10: shows the performance of cows and Goats at Ruhengyere Farm ...33 Table 11: Donor and GoU budget allocations in development projects, Shs(m)...... 35 Table 12: Economic composition of expenditure in the Development Projects, Shs mill ...... 36 Table 13: GoU contributions to the Project, Shs mill ...... 37 Table 14: Financial transfers to North West Nile districts, 2005/06-2007/08 (Shs‘000) ...... 44 Table 15: Government’s contribution to the total budget of NWADP, (Million) ...... 44 Table 16: Composition of budgets under NWADP for , 2005/06-2007/08 ...... 45 Table 17: Budget break down for under NWADP...... 47 Table 18:Budget break down of under NWADP ...... 48 Table 19: Status of the project performance under different contracts...... 54 Table 20: Distribution of beneficiary districts by regions under NLPIP ...... 59 Table 21: Flow of funds and agricultural inputs under NLPIP...... 61 Table 22: Government contribution to the total estimated budget under NLPIP...... 62 Table 23: Rukindo parish restocking (goats) under NLPIP in Nyakayojo sub-county, ...... 63 Table 24: Performance of cattle so far distributed under NLPIP...... 64 Table 25: Financial releases of funds and inputs to selected districts in Eastern region ...... 72 Table 26: Government contributed to the total estimated budget ...... 72 Table 27: Allocations of funds across different sub-components under AAMP ...... 76 Table 28: Infrastructure provision under AAMP in selected dsitricts ...... 78 Table 29: Funds released to selected districts under FIEFCO project, 2007/08...... 83 Table 30: Government contribution to the FIEFCO estimated budget ...... 83 Table 31: Funds released to selected districts under NAADS program...... 87 Table 32: Kyamuhunga sub-county detailed budget estimates and expenditure ...... 89 Table 33: Nyakayojo sub-county budget estimates and expenditure...... 90 Table 34: NAADS support to farmers in Kazo sub-county in ...... 91 Table 35: Expenditure trends on ISFG and sub-county advisory services ...... 94 Table 36: Comparative unit costs across the projects/programs (Ushs) ...... 95 Table 37: Government contribution to the project approved budget ...... 97 Table 38: Funds released to selected districts under PMA, 2005/06-2007/08...... 101 Table 39: Financial allocations and performance in selected sub-counties in Arua and ...... 103 Table 40: Fund allocations to expenditure items for Mbarara district, 2007/08...... 105 Table 41: DDA Income and expenditure Statement ...... 108

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Table 42: UCDA Income and expenditure by items...... 115 Table 43: Consolidate income and expenditure statement for NARS/NARO...... 118 Table 44: NARO Spending pattern and trends...... 119 Table 45: NFA Income and Expenditure ...... 121 Table 46: Transfer of funds and inputs to selected districts under VODP...... 125 Table 47: Training of farmers by gender and group membership...... 126 Table 48: Government release of funds against the approved estimates ...... 134 Table 49: Status of implementation of activities at the scheme...... 136 Table 50: Funds released and its utilization...... 136 Table 51: Resource allocation between non-agriculture and agriculture activities ...138 Table 52: Participation levels by gender in selected districts ...... 140 Table 53: Allocation of funds under NUSAF, ...... 141 Table 54: CDO Income and expenditure...... 143

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List of Annexes

Annex 1: Respondents in the Public Expenditure Study in Agriculture study ...... 152 Annex 2: Monitoring and evaluation of activities under North West Agricultural Development Project...... 155 Annex 3: Procurement of goods and services under MAAIF for FY 2005-2006...... 165 Annex 4: Schedule of funds released to the districts by NLPIP, 2006/07 ...... 174 Annex 5: Procurement of goods and services under MAAIF for FY 2006/07 ...... 176 Annex 6: AAMP Budget Mbarara ...... 184 Annex 7: FIEFOC Budget Mbarara District...... 184 Annex 8: NLPIP Budget Mbarara district...... 185 Annex 9: Agricultural Extension budget Mbarara ...... 186 Annex 10: NAADS Budget for Bushenyi district...... 186 Annex 11: NAADS Arua for Financial Year 2006/07...... 187 Annex 12: ANALYSED EXPENDITURE ARUA NAADS 2006/2007...... 188 Annex 13: MBARARA NAADS CONSOLIDATED FINANCIAL REPORT 2005/2006...... 189 Annex 14: MBARARA NAADS CONSOLIDATED FINANCIAL REPORT 2006/2007...... 190 Annex 15: MBARARA NAADS CONSOLIDATED FINANCIAL REPORT 2007/2008...... 191 Annex 16: NWADP DETAILED EXPENDITURE 2007/2008 (ARUA)...... 192 Annex 17: NAADS Cash flow FY 2006/07 for Pallisa district ...... 193 Annex 18: NAADS Cash flow FY 2007/08 for Pallisa district ...... 195 Annex 19: Bushenyi NAADS District Consolidated Financial Report 2005/2006 ...197 Annex 20: ANALYSED EXPENDITURE FOR BUSHENYI FOR THE PERIOD OF APRIL – JUNE 2006...... 198 Annex 21: Bushenyi local government ...... 198 Annex 22: BUSHENYI DISTRICT LOCAL GOVERNMENT ...... 199 Annex 23: Bushenyi local government ...... 201 Annex 24: KYAMUHUNGA SUB-COUNTY LOCAL GOVERNMENT: NAADS SUB-COUNTY FINANCIAL REPORT FOR PERIOD: APRIL-JUNE 2006 ...... 202 Annex 25: BUSHENYI DISTRICT LOCAL GOVERNMENT NAADS SUB- COUNTY FINANCIAL REPORT FOR APRIL-JUNE 2007: BITEREKO SUB- COUNTY ...... 203 Annex 26: THE STATUS OF RURAL INFRASTRUCTURE PROVISION UNDER NORTH WEST AGRICULTURAL DEVELOPMENT PROJECT AND SUPPORT TO FISHERIES BY MAAIF AS OF 18TH OF AUGUST 2008 ...... 223

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ACRONYMS

AAMP Area Based Agricultural Modernization Project ADB African Development Bank ADF African Development Fund AES Agricultural Extension Services CAADP Comprehensive African Agricultural Development Plan CAO Chief Administrative Officer CBOs Community Based Organizations CBPP Contagious Bovine Pleuro Pneumonia CDO Cotton Development Organization CFO Chief Finance Officer CMB Coffee Marketing Board COMESA Common Market for Eastern and Southern Africa CSC Community Score Card CWD Coffee Wilt Disease DANIDA Danish International Development Agency DAR Directorate of Animal Resources DDA Dairy Development Authority DFID Department for International Development DFIs District Farm Institutes DNC District NAADS Coordinator DSIP Development Sector Investment Plan EER Economic Rate of Return EPRC Economic Policy Research Centre EU European Union FFA Food for Assets FIEFCO Farm Income Enhancement and Forest Conservation FITCA Farming in Tsetse controlled Areas FMD Foot and Mouth Disease GDP Gross Domestic Product GoU Government of Uganda GTZ German Society for Technical Cooperation IFAD International Fund for Agricultural Development LGA Local Government Act LGDP Local Government Development Programme LSD Lumpy Skin Disease M&E Monitoring and Evaluation MAAIF Ministry of Agriculture, Animal Industry and Fisheries MOFPED Ministry of Finance, Planning and Economic Development MOLG Ministry of Local Government MOU Memorandum of Understanding MSC Micro Finance Support Centre Ltd MTEF Medium Term Expenditure Framework NAADS National Agricultural Advisory Services NAGRIC & DB National Animal Genetic Resource Centre and Data Bank NARO National Agriculture Research Organization

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NARS National Forestry Authority NCD New Castle Disease NEPAD New Economic Partnership for African Development NGOs Non Governmental Organizations NLPIP National Livestock Improvement Project NSADP Northwest Smallholder Agricultural Development Project NUSAF Northern Ugandan Social Action Fund OIE International Office of Epizootics PACE Pan African Control of Epizootics PAF Poverty Action Fund PCU Project Coordination Unit PEAP Poverty Eradication Action Plan PER Public Expenditure Review PETS Public Expenditure Tracking Study PMA Plan for Modernization of Agriculture PPDA Public Procurement and Disposal of Assets SACCOs Savings and Credit Cooperatives SFG School Facilities Grant SLM Sustainable Land Management TDS Technology Development Sites UA Units of Account UCDA Uganda Coffee Development Authority UNHCR United Nations High Commission for Refugees VODP Vegetable Oil Development Project WFP World Food Programme

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Acknowledgement and disclaimer

The study on public expenditure tracking in Agriculture was commissioned by DFID Uganda and World Bank focusing on determining value for money, benefit incidence and efficiency and effectiveness. The report therefore is the responsibility of the consultants alone and any conclusions should not be attributed to DFID or World Bank. The study was conducted by Nyende Magidu, Mugisha Fredrick, Omiat Omongin, with support from Sergiy Zorya from World Bank.

The Team gratefully acknowledges the assistance given by MAAIF, local governments’ officials and all of the people listed in Annex 1, who gave their time to take part in the interviews.

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1. Executive Summary 1.1. The Economic Policy Research Centre (EPRC) conducted a study on public expenditure in Ministry of Agriculture, Animal Industry and Fisheries (MAAIF) in Uganda. The main objective of the study was to help identify the types of expenditures that are best for pro-poor growth. Furthermore, this study was to assist MAAIF to undertake further public expenditure review (PER) work in the sector, and provide the tools and methods to support it. We paid particular attention to the value for money, benefit incidence, efficiency and effectiveness in all the expenditures both by MAAIF and Local Governments (LGs)1. 1.2. Two methodologies were adopted: - Public Expenditure Tracking Survey (PETS) and Community Score Card (CSC). The PETS was used to track resources from MAAIF to districts, sub-counties and beneficiaries. This tracking of resources included project funds, conditional grants that are directly released by MoFPED like PMA, LGDP, AES and inputs. On the other hand, CSC was applied to qualitatively assess the impact and the perception of the implementers on the various interventions being made by MAAIF. This assessment was also extended to the final beneficiaries and an assessment was made on the perception about the deliverables more specifically on value for money, incidence of the benefits and thus determination of efficiency and effectiveness in all the expenditures. 1.3. This study adopted a participatory approach whereby preliminary interviews were conducted among government officials both at MAAIF and local governments. Further to this, government reports and budgets with various policy documents were reviewed to act as bedrock for the analysis. Lastly, field work was conducted which included visiting beneficiary local governments and the sites where infrastructures were being provided. This exercise involved obtaining information on financial transfers, inputs, procurements of goods and services, unit prices, and the determination of beneficiaries. 1.4. Several districts were visited and these included Mbarara, Kiruhura, Bushenyi in Western region; Arua, Nebbi, Yumbe, Koboko, Moyo and Adjumani in North-West Nile region; Pallisa, Tororo, Busia, Tororo, , Budaka, and Soroti in Eastern region. In this study 12 projects and programmes were being tracked as well as semi and autonomous institutions that are mandated to offer services within the framework under MAAIF. 1.5. This study documents that public expenditure under MAAIF has helped recipient districts make progress towards achieving the stated objectives under each project and more specifically the contribution to reduction in poverty levels. There is a strong agreement from the field visits that public expenditure focused on the planned interventions in each project by financing activities that directly benefit the poor people. In this context, districts played their respective roles by designating officers who coordinated the activities at the lower levels in order to achieve the objectives. In most of all the projects, resources were transformed into pro-poor related spending although with limited allocation of funds to operation and maintenance. The off-budget expenditure on the agriculture sector by NGOs and other financing channels is considerable and

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Uganda Public Expenditure Review Phase 3 increasing. To a great extent, there is limited liaison between these various agencies and MAAIF or district production departments. This fails the efforts in aligning resources to the priorities and adoption of appropriate strategies as reflecting in the policy document. This has been emphasised in PER 1&2 reports where it was noted that MAAIF has difficulties in carrying out its key functions and in directing investment in support of sectoral development goals if agencies providing significant sums of money to the sector operate independently, in many instances paying only lip-service to working alongside MAAIF and its staff. 1.6. From the onset, each project recognized the need for adequate capacity to effectively use the resources and manage the project activities. Thus, all projects tried to use the available ministry and local staff at the district level and also tried to adopt improved checks and balances of the project committees, and adopted best practices with the objective of achieving efficiency and effectiveness. The study therefore focused on identifying value for money, determining the benefit incidence and assessing the efficiency and cost effectiveness. 1.7. Information was collected on expenditure in the agriculture sector for the period 2005/06-2007/08 financial years and the focus was at both central and local government level. Contrary to education where almost all resources follow the same path, the agricultural projects vary in how they are implemented and how resources, financial and physical, flow between the various layers of government. This complexity makes it difficult to estimate cumulative sector wastages and leakages from analysing just a sample of projects. The sector is also faced with the problem of lack of consistent and appropriate data on agricultural activities to utilize rigorous scientific measures. Furthermore, information on actual expenditure of donor funds are rarely available and summarise of funds utilized are partially provided while consolidated reports do not adequately give financial aspects. This is an issue that was also emphasised in PER1&2 reports and the study Team recommended for an immediate remedy to support studies but the situation is not quite different. 1.8. MAAIF’s GOU budget is provided through a series votes and this review analysed the various expenditures to determine how they are delivering on the mandate and its objectives. The results indicate that a high proportion of the recurrent budget and funds for the purchase of goods and services are allocated to headquarters. To a certain extent budget allocations are undermining the effectiveness of the DSIP because of inconsistencies. The analysis of the FY2006/07actual expenditures reveals that key departments and items have not received adequate attention e.g. crop production, livestock health and entomology, institutional development, supervision, monitoring, evaluation and statistics/data. It is also important for MAAIF to strengthen its link with other ministries as they play vital roles in the delivery on its mandate and objectives. The study further indicates that there are always unspent balances at MAAIF and high percentages were noticeable in fisheries resources, crop protection and headquarters ranging from 0.215% to 0.881% over the period. The development budget has not lived by its name and usefulness as the percentage proportion spent on goods, services and supplies was averagely 50. 2% while the recurrent expenditure in the development budget was 49.8%. 1.9. Similarly, findings of the study on projects implementation, it is clear that efficiency and effectiveness can be achieved provided the set implementation structures are utilized. These implementation structures include the district establishment and those

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Uganda Public Expenditure Review Phase 3 committees that are set up to oversee the delivery of planned outputs. In general, the observation is that MAAIF does meaningful work only under projects because it is where resources are availed and this was also emphasised in PER1&2. The analysis also reveals that expenditures efficiency was high under the production enhancement (crop and livestock subsectors) while the infrastructure was still faced with challenges. The most common and notable challenges in the implementation of all projects was top-bottom approach to management, irregular release of funds, weak of coordination, monitoring and evaluation system, weak information management and limited involvement of the designated district project coordinators.

North West Smallholder Agricultural Development Project (NSADP) 1.10. The project has 4 components namely; production enhancement, Improved Marketing Opportunities, Rural Infrastructure and Micro credit. The project performance has not been all satisfactory as cases of inefficiency more specifically in the infrastructure provision and coordination were observed. This is partially attributed to lack of adequate capacity in procurement of goods and services of such high magnitude. The value for money has been low as most of the project activities have not been executed on time, specification and budget, quality has been low and fitness of purpose has not been achieved. The results reveal that less than 10% of large projects were found to have been built on time, specification and budget. 1.11. The cost effectiveness is also not achieved as unit costs of road rehabilitation is 44.1% more than those applied in other projects and programmes, and incomplete works especially on roads, markets and bridges is high and represents about 86% of the project activities in markets at risk while 92% of the contracts under road rehabilitation and construction of bridges at risk. The incidence of expenditure varied but most of the roads are skewed in favour of the rich households. About 63% was spent on rehabilitation of the roads while only 31.8% was expended on community access roads which serve the ordinary farmers. In this project, the participation of the youth and elderly as well as people with disabilities is limited. There is also poor coordination between MAAIF and the local Governments hence affecting the project implementation. 1.12. The tracking of funds and inputs showed cases of leakages compounded with inconsistent data on funds utilized and released to local governments. The leakages of funds varied from 6.5% to 29.8% in the various beneficiary districts while the government contribution from 74% to 96%. The micro credit services have not been adequately utilized by the farmers as the interest rate varied from 36% to 48% per annum and the amount offered is low as it had earlier ranged from 50,000- 700,000. The conditions which are subjected to the farmers force them to sell their produce at a price less than 20% of the actual would be price. 1.13. On the overall, the micro credit prefers the non-agricultural loan applicants as their activities are less risk prone. The overall implementation of the project has been characterised by weak coordination, poor facilitation of field staff, delays in effecting payments, and cost overruns. The team therefore is of the view that MAAIF should focus in areas where they have subject matter specialists like production enhancement while infrastructure development should be handled by local governments and ministry of works. The ministry should emulate other ministries that are implementing similar projects and programmes like ministry of local government and education.

National livestock productivity enhancement Project (NLPIP)

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1.14. The project has 5 components namely; Animal health, water supply and forage resources development, Livestock Genetic Resources Development, Livestock Market Infrastructure and Information Systems, and Project Coordination. The tracking of funds reveals that leakages varied from 4.1% to 69% while in inputs varied from 2.2% to 4.9%. The government contribution to the project varied from 34%-47% over the period and this has affected the implementation of activities. There also cases of poor quality animals being supplied and such cases were cited in Soroti, Mbarara, Pallisa and Budaka. The poor quality problem was coupled with limited veterinary health services in the beneficiary districts and losses varied from 1.65% to 37.5%. 1.15. Similarly, goats and cattle are being provided to the farmers but with criticisms about the quality which is claimed to be quite low as well. The project is providing infrastructure like slaughter sheds, cattle markets but most of them are still incomplete. Besides, lack of proper coordination between MAAIF and the technical officers at the districts has been a challenge. Effectiveness has not been achieved as cost of vaccines on the recovery programme has been high compared to market prices and varied from 7.7% to 20% and sometimes the vaccines supplied where the expiry period and this affected the disease control component. Similarly, unit costs of the centrally procured animals where highly priced as a Boer goat costed 71.9% more than one procured by local governments. Similarly, a local goat that was centrally procured costed 28.5% more than one procured by local governments. The check points put up during disease outbreaks have not been effective due to irregular facilitation of the law enforcement officers. 1.16. The incidence of expenditures reveals that activities under this project have overlaps and do not create new beneficiaries. The team suggests the coordinator should be encouraged to use decentralization structures as a means of creating ownership and sustainability. The procurement of goats and cattle should allow the participation of local farmers as one way to reduce unit costs while attracting supply of relatively high quality animals. The infrastructure development should be coordinated by local governments and supervised by ministry of works. It is important to note that works has a limited number of engineers to attach to each project and those so far attached are overwhelmed by project workload.

Area Based Agricultural Modernization Project (AAMP) 1.17. This project operates in the districts of South Western Uganda with field offices in Mbarara which coordinates field activities on a daily basis. Its components include; Agricultural commercialization, Community Mobilization, Rural Infrastructure and Programme Facilitation. The project has registered achievements as elaborated in the main text but it also faces some challenges. Under this project, tracking of funds and inputs was not carried and therefore the main focus was on the utilization of funds to determine value for money, benefit incidence and efficiency and effectiveness in the selected districts. 1.18. Unlike other projects, AAMP has involved the local staff and has an effective field office that has coordinated activities between ministry of local government and districts. It has operated on the decentralized principles and a sense of ownership is high as well as sustainability. One of the main issues was that allocation to infrastructure was low during the inception of the project and programme facilitation continued to receive high allocation accounting for 3.3% higher than infrastructure. Similarly, some of the

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Uganda Public Expenditure Review Phase 3 infrastructure like markets attracted high costs and the quality of work was low hence low value for money. 1.19. The allocation of funds was more on the rehabilitation of roads more than maintenance of community access roads which could serve the poor farmers. However, the unit costs for the road rehabilitation varied from Sh.8 million to Sh.20 million which is within the recommended costs and comparably was within the costs in other programmes at the district level. Besides, farmers were trained in selection and management of enterprises and female participation was high accounting for 63.3% while male farmers were 36.7%. Most of the beneficiaries have attained primary education and landholding is averaged at 2-3 acres. The successful enterprises were goats, piggery, and growing of Irish potatoes and keeping apiary. However, the unit costs varied greatly as compared to other programmes like NAADS where the cost of a local goat was 30% higher than the unit cost under NAADS. The financial services through the micro credit institutions were incorporated in the project activities but the services were inequitable as it disproportionally benefited the non-poor households as 40% of the households of the poor quintile did not obtain loans. 1.20. On the overall, the loan recovery was on average 69.2% among the female farmers while among the male farmers was 57% and amount of money given out to farmers varied from Sh.118,449 for the female to Sh.187,565 for the male ones. There are indications that the project created an impact in western region and more specifically in the production enhancement and to a certain extent in the infrastructure. However, its challenges of limited poverty focus in the infrastructure can be addressed through continuous consultation with local governments. The production enhancement should be adequately financed as its incidence among the beneficiaries is high.

Farm Income Enhancement and Forest Conservation (FIEFCO) 1.21. The project aims at improving people’s incomes, rural livelihoods and food security among households through sustainable natural resources management and agricultural enterprise development. The project is in its initial stages and several activities have been undertaken which include training of trainers, mobilization of farmers, establishment of demonstration sites, and procurement of relevant items like motor cycles and bicycles for the field offices, and an average of Sh.25 million have been disbursed to the beneficiary districts. 1.22. The tracking of funds reveals that no leakage occurred and the government contribution towards the project implementation has high varying from 152% to 154% in the financial years 2006/07 and 2007/08 respectively. However, the project also faces some challenges of coordination since it is under two ministries, delays in implementation of project activities, and there are activity overlaps. The interventions under this project should attract proper expenditure targeting so as to maximize benefits, monitoring should be strengthened and timely released of funds should be adhered to.

Vegetable Oil Development Project (VODP) 1.23. The project focuses on; Oil palm development, vegetable oil fund and institutional research on oil development. It involves giving sunflower seeds to farmers, training them, giving them ram pressers for value addition on the seeds. The tracking of funds reveals that leakage occurred and it averaged at 9.7% while inputs were 88.8% in the selected districts of Soroti and Pallisa respectively. There is higher participation of females than males at a ratio of 1.5:1 as reflected in the group membership analysis and

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Uganda Public Expenditure Review Phase 3 the trainings also see more female participants than male at a ratio of 1.2:1. This project however, has benefited both farmers who attained primary education and those who attempted to study and the landholding is averaged at 2.5-3 acres. 1.24. It was also established that project activities reveal signs of activity overlaps and prices of the sunflower seeds is low and averaged at Sh.300 while the processed ones are at Sh.2,000. The project faces challenges of low adoption rates, land fragmentation, inefficiency in oil palm development, poor weather conditions which lead to poor yields and above all it has crowded out most of the local suppliers in the project implementation areas. There is also weak monitoring and evaluation mechanisms as the coordination office seems to be faced with limited information on the expected benefits. There is need to adopt an integrated approach to planning, monitoring and evaluation, and records keeping should be strengthened. The procurement of seeds should encourage the participation of local suppliers in the beneficiary districts.

National Agricultural Advisory Services (NAADS) 1.25. This programme aims at increasing farmer access to information, knowledge and technology through efficient, effective, sustainable and extension coverage with increasing private sector involvement for profitable agricultural growth. Activities carried out include educating farmers about NAADS, advisory services from service providers, technology development. The tracking of funds reveals that NAADS has a clear flow of funds and no leakage was established. 1.26. The programme supports farmers with improved varieties of seeds, animals depending on the enterprise chosen by the farmer group and it was established that some service providers have attempted to supply low quality items. However, there is value for money as the unit costs of the items are within the market prices and farmers are active in determining the standards of the items required with the guidance of the subject matter specialists. For example a local goat is procured at Sh.50,000-70,000 while a Boer goat is costed at Sh.250,000-300,000. 1.27. This programme has registered high participation of women averaging at 60% in the farmer group activities while the response of the youth which has been low is at 10%. The beneficiary farmers own 2-3 acres of land, with 40% of rural households keeping 5-9 goats among other enterprises and they attained primary education which enables them to keep records on their enterprises. There are various enterprises selected by the farmers but goat enterprise has been the dominant enterprise and piggery with varied types of crops depending on the region. For example bananas, Irish potatoes, pineapples are widely grown in western Uganda, while , sorghum, are widely spread in the northern and eastern regions. 1.28. The allocative efficiency under NAADS is generally high as technology promotion gets a proportionally good allocation as it averages between 42.9%-55.2% of the total allocated funds. However, there are also challenges of enterprise selection with limited guidance from the subject matter specialists, the narrow criteria used to identify any three priority enterprises for a sub county. Besides, trainings have not favoured some disadvantaged groups like the disabled, youth and elderly and this has been attributed to their limited ability to participate. 1.29. There have been limited benefits from the loan provision by SACCOs as their requirements are highly prohibitive. Generally, farmers feel they have benefited from NAADS and it has contributed to food security. Although there is control over the flow of

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Uganda Public Expenditure Review Phase 3 funds, some service providers initiate the process which leads to supply of items less in amount and quality than required. The team suggests that increased funding should be increased to all local governments but with revision of the training components as farmers need inputs more. The capacity for the sub-county NAADS committees need to be strengthened more in procurement as they get involved in the technical work of the programme. Districts should be encouraged to follow the guidelines in allocating funds across the programme components.

Support to Fisheries Development 1.30. The project is being implemented in the areas around Lake Albert, Victoria, Kyoga, Edward and George. It aims at increasing incomes from fishing through availability of higher quality fish products by strengthening Aquaculture Research and Development. It involves improving of fish handling infrastructure, Fish Credit Fund, Capacity Building and Project Coordination. Farmers have been provided with inputs for fish farming and hatchery but the support is quite insufficient and irregular. 1.31. The tracking of funds under this project was not possible as no funds are released to local governments and information on funds so far utilized on other service provision was not provided. However, farmers have so far received only Shs.700,000 which is quite inadequate to execute meaningful work. The information available at the project office reveals that all the beneficiary farmers where to receive funds less than 30% of the originally planned amount but this information has not been disseminated to participating local governments. Similarly, 1,000 fishermen, boat builders, extension workers, fish inspectors and service providers have been trained and 12 staff have been trained at post graduate level. 1.32. Further to that, the project has renovated Entebbe fisheries training school and several landing sites are being developed like Majanji in , construction of Tororo fish market and Nkoma fish fry centre. However, there is an outcry as farmers and district staff are not adequately provided with information on the project activities. This poor coordination between MAAIF and the local Governments in implementation of activities has seen some beneficiary farmers dealing directly with the ministry. The administrative arrangement requires consultants to oversee the works at the various sites but findings reveal that no close supervision is done and this has resulted into low quality work as exemplified at Tororo fish market. 1.33. The project faced a problem in proving land ownership for the infrastructure development since most of the land provided by districts had no land titles. This project has not created local ownership and sustainability of the intended flow of benefits is highly doubtful. The infrastructure that has been provided shows a sign of inefficiency and low value for money. There is also low utilization of funds as only 35% of funds released have been utilized. There is therefore need to improve on the coordination and provision of facilitation to the subject matter specialists at the district to enable them monitor and supervise the on-going activities.

Non-Sectoral Conditional Grant (NSCG) 1.34. The overall objective of the project is to increase incomes and improve the quality of life of poor subsistence farmers, improve household food security, provide gainful employment and promote the sustainable use and management of natural resources. Non-Sectoral Conditional Grant (NSCG) is used to provide inputs to farmers for demonstrations and seed multiplication like cereals, legumes, goats, poultry, beehives

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Uganda Public Expenditure Review Phase 3 and honey harvesting gears, disease control inputs. There is some rural infrastructure development like community roads, protection of wells, and improvement of landing sites, construction of community stores for bulking produce and provision of culverts. There are farmers training on formation of SACCOs, marketing knowledge and skills. Tracking of funds was conducted and there are cases of leakage in Bushenyi district as the figures provided to the team show variations. However, there is inadequate funding for the programme and this constrains the implementation of activities. This programme is supporting the necessary interventions under the multi-sectoral arrangement and therefore the funding levels should be scaled up.

Support to irrigation 1.35. The project activities are aimed at the rehabilitation requirements of Mubuku, Doho and Olweny irrigation schemes. These schemes are currently managed by farmers with a minimal role from the central government. The conception, initiation of the project and the procurement are all done at MAAIF headquarters. The plans indicate that activities at the scheme are to be facilitated by the government and farmers’ contribution of Sh.20,000 from each association member which turns into Sh.47.6 million annually. The tracking of funds indicates that the project is fully financed by government and release of funds has not been impressive as only 35% of the estimated amount was obtained in FY2005/06 while only 20% was utilized in FY2006/07. 1.36. The project has 4,385 local farmers participating in the utilization of the scheme and on average each farmer manages 2 acres of the swampy land. The efficiency has not been attained as only 52.04% was utilized in the actual implementation of the work while 47.96% was expended on goods and services and 28.7% was spent on procurement of vehicles. The extension staff are not regularly facilitated and power was disconnected in almost all the facilities except the office block. The farmers attained primary education and growing is the dominant crop grown although with some patches of maize in less watery parts. Besides, inadequate financing of activities at the scheme, lack of coordination and inefficiency have emerged as the main challenges. This has seen a reduction in the production levels from 90% to 50% over the past few years. There is need to review the role of government in the scheme and the staff should be facilitated to carry out meaningful extension work. The central government should restrain itself from contracting out works with no viable financing budgets as inadequate interventions create resource wastage.

Pan African Control of Epizootics (PACE)

1.37. The PACE was a European Union (EU) funded project that handled mainly disease surveillance, diagnosis and disease control. It operated mainly in the cattle corridor especially south-west Uganda in the districts of Kiruhura and Bushenyi but was not in the West Nile area. PACE did not also operate in the sub counties that bordered the national parks e.g. Ryeru Sub County in Bushenyi district. Over the years, surveillance has been carried especially in rinder pest to ascertain whether rinder pest still exists or not. Under this project, vaccines provided to districts in the cattle corridor were tracked but with limited focus on funds as there was no major financial transfers. The

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Uganda Public Expenditure Review Phase 3 findings indicate that leakage varied from 23.5% to 48.5% but also with an instance when 130,000 does were released to the district but with receipt indicated in the stores register. 1.38. There was also low utilization of vaccines by famers since they were provided on a cost recovery programme and this was coupled by the poor storage facilities in the districts. The programme was not cost effective because the vaccines on a cost recovery programme were expensive as compared to the market prices and the control of animal movement was failed by other participating departments like police and officers in the neighbouring districts. The ministry also lacks capacity to carry out tests of animal diseases and in most instances samples are sent out and it takes about 3-4 months to receive results. The impact was not assessed as this project focussed on surveillance and thus only outbreaks of major cattle diseases were reported and therefore an intervention sought. It is therefore appropriate to develop capacity in the animal health department as well as the laboratories to effectively respond to the needs in this sub-sector. The ministry should take responsibility to enforce animal movement as the activities executed are of public goods in nature.

Agriculture and Marketing Support Project 1.39. The Agriculture and Marketing Support Project is supported by World Food Programme (WFP). World Food Programme provides food assistance for relief and recovery for displaced people and vulnerable groups. The participating districts include Bundibugyo, Gulu, Kitgum, Pader, Arua, Yumbe, Adjumani and Moyo. These districts were chosen due to the fact that they were affected by insurgency. The overall objective is to improve the incomes and food security status of smallholder famers. There are basically two major components under this project namely market support and food for assets. The tracking of funds was not possible under this programme because the funds are not released to MAAIF. 1.40. However, government contribution was tracked and the findings reveal that it varied from 22%-38% which was less than the total estimated contribution. The beneficiary districts revealed that activities under WFP had earlier faced with challenges of coordination and led to duplication of activities and outcomes were not impressive as there was total lack of involvement of district subject matter specialists. Similarly, WFP pledged a lot of funds that were not released to the coordination department and this reduced their government share and this affected negatively the delivery on their mandate. It is important for MAAIF to establish the management of programme before final allocation of resources among the various departments are concluded. The coordination among the stakeholders should be strengthened to minimise the duplication of activities and this will enable the programme achieve the intended objectives.

Farming in Tsetse fly Controlled Areas 1.41. This is European Union and Government of Uganda (EU/GoU) funded project which operated in the districts of Mukono, Kamuli, Jinja, Iganga, Mayuge, Kayunga, Busia, Soroti, Bugiri, Budaka, Tororo and Manafa. It was a community development project which aimed at improving the community welfare by using an integrated approach of opening up land and rare the zero grazing animals in tsetse fly infested areas. The interventions also involved spraying animals, animal traction (use of oxen) and pasture development. Thus the major objective of the project was to encourage

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Uganda Public Expenditure Review Phase 3 community control tsetse fly in the infested areas through the numerous interventions. The tracking of funds established leakages which varied from 95% to 96.3% while in the inputs varied from 50% to 75%. The government contribution was also tracked and it indicates a range from 84% to 93% with FY2007/08 recording the highest government contribution. 1.42. The value for money under this project was achieved as the unit costs of animals were within the market prices and even the cost recovery programme of spraying animals was only Sh.200 which was within an affordable range. The beneficiaries were poor farmers who had either attained primary education or not and on average had landholding of 2.5 acres but with limited involvement of the youth and disadvantaged groups. However, inefficiency was identified in the provision of artificial insemination services as quarterly reports indicated that they were both poor and inadequate. It was also reported that inadequate facilitation reduced the frequency of field visit by the technical staff and this had a bearing on the performance of the animals. 1.43. The farmers who were chosen failed to provide the supplementary feeding and maintenance which led to loss of animals. Although the project aimed at demonstrating to farmers how farming could be carried out in tsetse fly infested areas, the selected areas were small and yet activities executed were of public goods in nature. It is important MAAIF considers facilitation of district staff as a precondition for the attainment of project objectives. There is need to carry adequate assessment on axially services to confirm their accessibility to the farmers. Lastly, the programme management should adopt one clear coordination system to easily hold implementers accountable.

Agriculture Extension Conditional Grant 1.44. The traditional Agricultural Extension is part of the Poverty Action Fund (PAF). These funds support the operations of the department of Agriculture. These include salaries and wages and non wage operational funds. The non-wage operational funds include: training of farmers; supervision and follow up of programs; planning of workshops plus other administrative activities. The Agricultural Extension Conditional Grant is implemented country wide in the various districts. Under this programme, tracking of funds and inputs was not but a closer analysis was done on the use of funds. The Agricultural Extension Conditional grant which is one of the sources of funds for the department is also inadequate. It is estimated that around 75% of the funds are spent on salaries for the extension staff and 25% is allocated to facilitation and actual provision of goods and services. 1.45. However, it is important to note that this grant has been reducing by 39% in some districts which has made the staff redundant. The motor cycles that were provided to the extension staff are too old and maintenance costs have tremendously increased. Similarly, the assistant agricultural officers lack transport to enable them conduct field visits. The few who manage to visit farmers use bicycles which limit their mobility in areas under their jurisdictions. It is important that the grant should be scaled up to enable the extension staff reach as many farmers as possible. The process of restructuring should be quickened so that extension staff are recruited to address the problem of inadequacy especially where there has been sub-division of districts and lower local governments. A comprehensive programme should be developed so that all the small and scattered funding levels are amalgamated into one.

Uganda coffee Development Authority

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1.46. The Uganda Coffee Development Authority (UCDA) is a statutory organisation established by an Act of Parliament of 1991 after the dissolution of Coffee Marketing Board (CMB). It was established to promote and oversee the coffee industry as a whole by developing research, controlling the quality, improving the marketing and to provide for other matters connected with coffee. The GOU identified coffee as one of the major sectors for strategic intervention in its attempt to eradicate poverty. The reason for this intervention is that it provides livelihoods to well over 3.5 million people, and is currently the leading agricultural export commodity, accounting for over 30% of total foreign export earnings, has great potential to attract high value if exported as a finished product targeting specific niches. The authority is mandated to carry out certain activities but the funding is inadequate and there is need re-orient its spending to quality enhancement, production and value addition. The findings reveal that resources have of recent been spent on productive activities as it has been noted that funds spent on research and development has varied from 3.3% to 11% in FY2006/07 while office expenses has reduced from 14.7% to 9%, travel costs has varied from 1%-2.6% and international obligations has of recent reduced from 17% to only 6% and coffee has attracted a high expenditure in its promotion ranging from 22%-28%. It has been noted that training which one of the precondition for effective service delivery is has seen more staff being trained. The team is of the view that UCDA should strengthen its links with all stakeholders and link with local governments to achieve more impressive outputs so that it can effectively delivery on their mandate.

Cotton Development Organization 1.47. The Cotton Development Organization (CDO) was established in 1994 by an Act of Parliament. It has the responsibility of monitoring the production, processing and marketing of cotton so as to enhance the quality of exported and locally sold lint; to promote the distribution of high quality cotton seed, and to generally facilitate the development of the cotton industry. The tracking of funds was not possible and therefore the focus was more on the utilization of funds among the various activities. The performance of the sub-sector has not been impressive as production reduced to only 65,000 bales in FY2007/08 down from 134,000 in 2006/07. This sub-sector should be supported in order to enable cotton compete favourably with other crops and also restore its position in the income streams of the majority of Ugandans.

Dairy Development Authority 1.48. Dairy Development Authority (DDA) is a statutory body, under the Ministry of Agriculture, Animal Industry and Fisheries (MAAIF), established by the Dairy Industry Act, 1998 with a mandate to develop and regulate the dairy sector. DDA’s overall objective is to provide proper coordination and efficient implementation of all policies designed to achieve and maintain self sufficiency in the production of milk in Uganda by promoting production and competition in the dairy industry and monitoring the market for milk and dairy products. It was not possible to track funds under DDA but its utilization was analysed and the findings indicate that only 6.79% was spent on activities that focussed on the attainment of DDA objectives. Although DDA is inadequately funded it should demonstrate in the use of the available resources efficiently by making appropriate allocations in the priority areas. It should also strengthen its links and operations with the private sector providers and local governments as there are staffs who directly offer services to the dairy farmers. However, its contribution to the increase of nutrition levels among the poor farmers has been noted.

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Northern Uganda Social Action Fund (NUSAF) 1.49. The Northern Uganda Social Action Plan (NUSAF) is a project that started in 2004 and was designed to address all sectors in northern Uganda. The aim was to rehabilitate the broken down sectors that resulted due to the war that had been on going in that area. The project is implemented by the Prime Minister’s Office (OPM). Although most of the funds were for construction activities in the education sector, a substantial amount was allocated to the agricultural sector. The study focused on benefit incidence, efficiency and effectiveness as the tracking of funds and inputs was not possible since this programme is coordinated in the prime minister’s office. It is worth to note that the allocative efficiency is high as 64.5%, 69.9% and 73.7% was allocated to agricultural related activities in the districts of Arua, Koboko and Maracha-Terego respectively. The findings indicate that male participation is 56.5% while female is 43.5% and goat is the dominant enterprise among the male farmers while poultry is widely selected by female individuals but with low participation levels of the youth. It worth surprisingly to note that crop production is among the disliked enterprises as well as piggery.

National Forestry Authority 1.50. The National Forestry Authority (NFA) was established under the National Forestry and Tree Planting Act 2003, after the divestiture of the Forestry Department, with specific responsibility to manage the 506 Central Forest Reserves (CFRs) with a total area of 1,265,742 ha. The Act was launched on 26th April 2004, marking the start of operations of NFA under the oversight of the Ministry of Lands, Water and Environment (MLW&E). It has a Board of Directors appointed by the Minister. The role of NFA is well defined in terms of vision, mission and core objectives. These have a strong influence on the preparation of annual work plans, allocation and utilisation of resources for NFA

National Agricultural Research Organization (NARO) 1.51. The PER is not only covering the National Agricultural Research Organization (NARO) period but also the transition of NARO to National Agricultural Research Station (NARS) when the organisation underwent a restructuring exercise incorporating important elements of PMA2. Consequently, there has been a shift in both policy and institutional environment which governs the entire research activity in Uganda. This is reflected in the NARS Research Act of 2005. 1.52. Generally, the findings of the study have major policy implications for MAAIF and its autonomous organizations. For MAAIF, it is critical that it works through local government establishment, in addition to strengthening coordination, procurement and monitoring. The DSIP should be internalized and effectively utilized by staff and MFPED should be encouraged to embrace it. The ministry should allow local governments manage and procure items that can be domestically obtained as its unit costs are quite high compared to local governments. Similarly, the principle of bottom-up planning and budgeting should be adopted to promote high sense of ownership and sustainability. This study also reveals that predictability of resource flows is crucial to

2 A policy framework under PEAP that provides for the transformation of predominantly subsistence agriculture into a market-oriented sector of the national economy.

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Uganda Public Expenditure Review Phase 3 allow efficient and effective implementation of activities for improved service delivery. There is need to strengthen the coordination, monitoring and evaluation system, information management and review the policies that govern the autonomous organizations.

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L V E B I P Uganda Public Expenditure Review Phase 3 N W I F A D P NWADP MAAIF

N L I I I P I P NLPIP MAAIF I

I

F I I T I I A E F C MAAIF P FIEFCO

V O I T I F L D P VODP MAAIF

S C V I R C I MAAIF

T F C I B A D MAAIF P

P A C C V R I E MAAIF 16 Economic Policy Research Centre (EPRC)

F T C V I R R C A MAAIF Uganda Public Expenditure Review Phase 3

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Uganda Public Expenditure Review Phase 3

Introduction 1.53. The intentions of the public expenditure review (PER) in the agricultural sector was to conduct a comprehensive review of public expenditures so as to identify the types of expenditures that are best for pro-poor growth. The PER is aimed at improving the quality and content of public expenditure in the agricultural sector and to ensure that expenditures are directed to goods and services that are mostly used by the poor. It is intended to complement existing and on-going work on improving the quality of public expenditure. In particular, the PER is a timely input into the budget formulation process for the fiscal year 2008/09 and is also intended to strengthen the formulation of the sector plan that will be integrated into the Five Year National Development Plan (NDP). 1.54. The PER had three Phases. The first two Phases focussed on patterns of expenditure allocation within the sector and the process of formulation and execution of sector’s budgets. Phase III, which is the focus of this study concentrated on efficiency and effectiveness of public spending in the delivery of agricultural services. Specifically, it focused on value for money, benefit incidence and efficiency and effectiveness of the public expenditures in the delivery of goods and services for the poor. By extension, the tools and methodologies used in this expenditure tracking exercise would be adopted by the Ministry of Agriculture, Animal Industry and Fisheries (MAAIF) to undertake future public expenditure reviews in the sector. Rationale of the study

1.55. The rationale for carrying out PER for MAAIF is to enable stakeholders to prioritize expenditures to sustain aggregate and agricultural growth. MAAIF’s strong interest in a comprehensive PER is thus to better align future expenditures to its priorities and also to make a case for an appropriate level of funding for the sector. 1.56. This exercise similarly is also part of a larger annual Public Expenditure Review - a core diagnostic - undertaken collaboratively by the Government and the World Bank. This study therefore follows a call from New Economic Partnership for African Development (NEPAD) to its member states to allocate 10 percent of annual budgets to agriculture with a broader objective of achieving and sustaining the 6 percent growth target for the sector. 1.57. Lastly, development partners, (mainly DFID and World Bank), are increasingly concerned about the low levels of investments and expenditures in agriculture despite strong evidence that agriculture expenditures yield high returns and are strongly linked to poverty reduction. Phase III Objectives

• Assess value for money for the planned deliverables under various agricultural programmes. • Determine the benefit incidence among the beneficiaries by geographic location with emphasis on remote rural areas; and • Assess effectiveness and efficiency of public expenditures with a focus on developing the cost effectiveness in the provision of goods and services.

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Scope

1.58. This study focused on assessing expenditures and identification of the most efficient ones that have been pro-poor in both the utilization of Government of Uganda funds and donor financing. In order to obtain better results, the study focussed on the value for money, benefit incidence and effectiveness and efficiency of public expenditures and their impact on the mandate if MAAIF. Thus MAAIF, districts and lower local governments became the main focus for the information provision. The projects to be visited spread across four regions which include western, northern, central and eastern. In each district, the emphasis was placed on the establishing planned expenditures and actual, quality of the expenditures, inputs and outputs and the productive efficiency of each planned output. It is important to note as stated in DSIP that lack of up to date and reliable statistics/data on the sector is still a challenge. This has also been a constant source of frustration for the planning and policy formulation as well as the drawing of working documents as stated by the core team of planners in MAAIF. 1.59. The rest of the study is organised as follows: It starts with background and rationale of the study. The second section presents the status and budget trends in MAAIF’s expenditures. This is therefore followed by a more detailed analysis of both recurrent and development budget allocations and expenditures and how MAAIF has delivered on its mandate and objectives. The subsequent sections focus on discussions of projects and programmes with specific focus on value for money, benefit incidence and efficiency and effectiveness in their expenditures and whether they are delivery on the objectives of MAAIF as translated in the DSIP. Study approaches and methods 1.60. Two approaches were used including the public expenditure tracking (PETS) and a modified Community Score Card (CSC). The approaches were utilised to allow us observe the outputs and actions of service providers, thereby providing new information that will inform policy makers on the complex transformation of public budgets into services. A brief description of each approach follows.

a) Public Expenditure Tracking Survey (PETS)

1.61. One of the methods used in PER was the PETS. This involved tracking of resources through various strata of government in order to determine how much of the originally allocated public resources reach the intended level (i.e. districts, sub-counties). We collected data at several levels: from frontline providers (MAAIF), LGs (politicians and public officers) and Central Government (MAAIF). By comparing data at these different levels, one is able to determine and assess where funds are being absorbed and perhaps where they are going astray. 1.62. The tracking also involved identifying the inputs that were procured from the Ministry headquarters and sent to the districts, sub-counties or directly to the farmer groups; and checking how much these inputs reach the intended beneficiaries. The logistical methods used to transfer these inputs were identified. The unit costs for each of the inputs were identified and compared with market unit costs at their point of destination. 1.63. The PETS further identified the services that MAAIF indicated to have provided. This involved identifying the places where the services were provided, the

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Uganda Public Expenditure Review Phase 3 number of beneficiaries and the cost involved. Verification was done on whether these services were provided at the districts, sub-counties and among the farmer groups. PETS also observed the implementation framework involved in transferring the funds, inputs and services to the beneficiaries. 1.64. The Public Expenditure Tracking Survey was extended to the semi- autonomous organisations under MAAIF, specifically to National Agricultural Advisory Services (NAADS), Uganda Coffee Development Authority (UCDA) and Cotton Development Organization (UDO). The transfer of funds, inputs and services in these organisations was examined to determine the implementation arrangements of these organisations and to determine how efficiently it is done.

b) Community Score Card (CSC) 1.65. A community score card was adopted in this study as another approach. In this approach, the beneficiaries, political leaders and service providers were asked about the project implementation and anticipated benefits. It was adopted because of its strong feedback mechanism which is immediate and its suitability to the local community for effective participation. The beneficiaries were visited and interviewed from their respective villages while the political leaders and service providers were interviewed either at the project sites or offices. 1.66. The two approaches were jointly used in order to obtain more complete picture of the efficiency of public allocation system, activities at the provider level, as well as various agents involved in the process of service delivery outcomes. Furthermore, data from the service users e.g. the people in the communities provided qualitative measures of service quality and performance. 1.67. In the subsequent sections we endeavour to elaborate the entire data and information collected based on the approaches as discussed above. The study draws on several data sources including administrative data relevant ministries; several government policy documents; and field interviews. 1.68. MAAIF headquarters: We held meetings with the respective technical staff and heads of various units, departments and projects and other subject matter specialists in the sector. This approach was adopted as a means of creating ownership of the process as well as enabling the staff get acquitted with the tools and methods of the study. We collected data on funds disbursed to districts, the commodities procured and the process of such procurement and disbursement. 1.69. Selection of projects for tracking: There are quite a number of projects and programs under MAAIF. Because of budget and time, we took a sample of these projects and programs. The project sample selection involved various steps. Step 1: projects were selected based on the percentage of their budget in MAAIF’s total development budget. Projects with a share greater than 3 percent were selected (see table 1). The share of the selected projects’ in MAAIF development budget is nearly 82 percent, which is adequate to elicit the performance and challenges in the sector 1.70. Step 2: Involved identifying and selecting districts where the selected projects in Step 1 were being implemented. The selected districts by project type are shown in 20 Economic Policy Research Centre (EPRC)

Uganda Public Expenditure Review Phase 3

Table 1. The selected districts portray a regional representation of the selected projects though type of project varies geographically. At the district headquarters, key informant interviews were conducted with the technical officers. These interviews were meant to share the respondents’ perceptions of the delivery of services in the agricultural sector in their districts. In addition, group discussions were conducted in the production department this being the main coordination department. These interviews sought for the technical perceptions of the delivery mechanisms of the deliverables under the project arrangement. 1.71. Step 3: Within each selected district a sample of sub-counties was selected. In districts where the selected project was implemented in a few sub-counties, all sub- counties were selected. On the other hands, in districts with selected project implemented in several sub-counties, they were selected according to their proximity to the district headquarters: select one that is close and one that is far off. Meeting were held with technical officers at sub-county level. Key documents like budgets, quarterly and annual reports, final accounts, work plans were reviewed to establish the planned activities, unit costs, target groups, timeframe among others.

Table 1: Sample projects by their share in MAAIF development budget and sample districts Project Share% Selected districts Farming in tsetse areas of East Africa 3.6 Pallisa, Soroti, Tororo NW smallholder agricultural development 11.6 Arua, Nebbi, Koboko, Yumbe, Moyo, Adjumani Livestock Disease control 6.6 Kiruhura, Bushenyi National livestock productivity improvement 19.7 Pallisa, Bushenyi, Soroti, Kiruhura, Mbarara Support to fisheries development 17.1 Tororo, Busia Vegetable oil development 15.6 Pallisa, Soroti, Tororo Farm income enhancement project 8.1 Mbarara, Pallisa, Soroti Agriculture marketing support 3.0 Arua Total 82.2 Source: Policy Document for MAAIF, June 2007

1.72. Step 4: The last step involved selection of beneficiaries to be visited within the selected sub-counties. The beneficiaries included farmer groups and individual farmers. The aim was to seek the beneficiaries’ perceptions of delivery of planned outputs in their localities and assess their status. The field visits at this level also tried to discern the mechanisms that were used to select the respective beneficiaries.

(c) Definitions of concepts used in the study 1.73. Value for money: In this study value for money refers to measure of quality in relation to resources used to procure goods and services with the benefit obtained from the goods and services. It took into account a mix of quality, resource use, and fitness of purpose, timeliness, cost effectiveness and convenience. 1.74. Benefit incidence: We took it as a way of measuring who is gaining from the government spending. It simply combines two empirical facts i.e. who is using the services and in this case we considered gender, location geographically, income to a

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Uganda Public Expenditure Review Phase 3 certain extent, land holding, education etc (calculation of incidence mathematically was not possible as adequate data on the net unit cost and frequency of utilization is missing in public sector) 1.75. Efficiency and effectiveness: Efficiency in this study relates the input or the output to the final objectives set and in this case we assessed basing on the performance indicators i.e. input-output ratio e.g. allocations of funds among different project activities, feasible output levels given the scale of operations. We also considered the greater the output for a given input or the lower the input for a given output, the more efficient the activity. 1.76. While effectiveness in this case shows the success of resources used in achieving the set objectives. Here costs of the deliverables were calculated and compared among the different projects and programmes. Similarly, input prices used by different projects and programmes in respect to the purchase options at the market were compared. 1.77. In assessing efficiency, a distinction was made between technical and allocative efficiency. Technical efficiency assessed the pure relation between inputs and outputs taking the production possibility frontier into account. In this case technical efficiency gains are a movement towards the production possibility frontier (best practice). 1.78. Allocative efficiency in this report reflects the link between the optimal combination of inputs taking into account costs and benefits and output achieved. Similarly, the allocation of funds among the different project and programme components or activities was assessed.

Budget Composition and Expenditure Trends under MAAIF

1.79. The overarching goal of agriculture is poverty eradication and the transformation of the sector is through multi-sectoral interventions. Given the limited government budgetary resources, the targeted beneficiaries for public sector investments programmes are subsistence farmers who are engaged in crop, livestock, fish and forestry as well as commercial farmers who benefit from the created conducive environment for production and trade. In this section we provide an economic overview of the relationship between agriculture and its related expenditure in attaining the set objectives and addressing its core functions. We also assess performance in terms allocative, technical efficiency and cost effectiveness in the expenditures during the period 2005/06-2007/08. An overview

1.80. The mission of MAAIF is to support, guide and promote national efforts to commercialize agriculture including subsistence agriculture, by providing efficient demand-driven services to the farming community. While services are provided to the sector as a whole, the primary focus is on resource-poor farmers, who are the majority and main change agents of the development process. 1.81. Given the provisions in the various national policies, including economic liberalization, 1998 post-Constitutional Restructuring Report, the Poverty Eradication Action Plan (PEAP), the Plan for Modernisation of Agriculture (PMA), the revision of

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Uganda Public Expenditure Review Phase 3 water for agricultural production and disease control, as well as regulatory services to Ministry, the role of MAAIF was redefined. It was transformed from direct involvement in service delivery, to a facilitator by supporting, guiding and promoting. MAAIF is to ensure an enabling, conducive policy and regulatory environment, as well as essential physical infrastructure are put in place and maintained. This shift in the role has to some great extent enabled the private sector to operate in an effective manner in the areas of agricultural services’ provision, production, agro-processing and marketing. This supportive environment is ideally a pre-condition for the rapid growth of agriculture and the economy. 1.82. The Ministry’s mandate is to support, promote and guide the production and processing of crops, livestock, fish and all other agro-related activities in a sustainable manner so as to ensure the best quality for the consumers in the market and increased quantity of agricultural produce and products for domestic consumption, food security and export. 1.83. The expenditure pattern within MAAIF can be analysed in terms of expenditure type of budget (recurrent and development), component of the budget, cost centres, programme and sub-programme, item and by sub-item and vote functions. However, due to lack of sufficient disaggregated data, a rigorous analysis for some of these expenditures has not been done. The analysis under this study will therefore determine the extent to which MAAIF has delivered on its mandate in order to achieve the stated objectives. This will be done in line with the overall resource envelope that is allocated to the various vote functions in the various departments and this will include both Government of Uganda allocations and the Donor funded projects. The section that follows analyses the headquarter’s activities and this will be followed by the operations through projects in the section thereafter. MAAIF approved recurrent budget

1.84. During the period under review, the accumulated recurrent budget of MAAIF amounted to Shs33.8bn, ranging from Shs10.1bn in 2005/06 to Shs14.4bn in 2007/08. The variance is driven largely by changes in domestic debts and the sharp rise in MAAIF recurrent budget in 2007/08. The grants were quite stable over the review period. However, these grants go directly to semi-autonomous organizations e.g. UCDA, UCO in form of wage and non-wage recurrent and contributions to international organizations. 1.85. Domestic debts are debts to private companies for supply of procured goods plus farm debts, for example for supplied tea and cocoa seedlings. Farm debts were Shs120m in 2006/07, Shs485 and Shs619m in 2007/08 and 2008/09 respectively. In 2007/08 alone, farm debts contributed to more than 10 percent of the total domestic debt. According to the draft estimates of revenues and expenditures for FY 2008/09, the total domestic debt is estimated to rise to Shs.4,885m. These debts include the debts to suppliers of goods and services among others excluding “donor-financed development projects”. These debts accumulated from the government’s failure to meet its domestic obligations arising from the supply of goods and services, and mandatory contributions to international organizations. However, the magnitude of domestic debts reported in this study might be underestimated. We only report amounts that have been officially verified by the Auditor General.

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Table 2: Recurrent budget of MAAIF, Shs (m)

Source: Approved Budgetary Estimates MoFPED

Economic composition of the MAAIF approved recurrent detailed budget

1.86. In this section we focus on the detailed allocations in recurrent budget. MAAIF headquarters controlled only 46 percent of the total MAAIF recurrent budget (Table 2). In absolute terms, this averaged Shs5.2bn over the period under review. In 2007/08, the budget increased by Shs1.8bn compared to 2006/07, largely driven by the allocation of funds for “goods and services” to the Fisheries Resource Department (Shs 1.6bn). 1.87. The approved recurrent budget of MAAIF was well balanced between wage and non-wage components, especially when the abnormal funds for Fisheries Resource Department are assumed to be one-year deal. The share of wage in recurrent budget was 46 percent. Note that wage-recurrent budget includes only “General staff salary” and excludes “Allowances, medical expenses, disability payments, and funeral expenses”. These are added to non-wage recurrent. 1.88. The main funding items of the non-wage recurrent expenditure include the following: allowances, fuel and lubricants, and maintenance of vehicles. Supply of goods and services is largely driven by the one-time injection of funds to Fisheries Resource Department, but if excluded, they accounted for 2 percent of non-wage recurrent expenditure. Interesting that “welfare and entertainment” category accounted for 3 percent of the non-wage recurrent spending. The unimpressive share of the allowances in the recurrent budget is one of the contributing factors to lack of satisfactory implementation of activities in the sector. One of the arguments that Ministry of Finance, Planning and Economic Development (MoFPED) has often raised is that the MAAIF lacks clear priorities in terms of use of funds.

Table 3: Approved wage and non-wage recurrent budget, Shs (m)

Source: Approved Budgetary Estimates MoFPED

1.89. Table 4 shows that headquarters accounted for 37 percent of total MAAIF recurrent budget, followed by Fisheries Resource Department and Crop Protection Department. However, a number of important findings are relevant. Taking all the seven

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Uganda Public Expenditure Review Phase 3 agriculture departments together, they received less than 10 percent of the recurrent budget allocations over the period under review. Surprisingly, the directorates of animal and crop resources received only 1 percent, which is very low relative to other departments. The allocation to the key departments has been insufficient considering the fact that they are the agents that implement activities in the sector. 1.90. The implication of this trend is that financial resources have been accumulating at MAAIF headquarters to finance overhead costs at the expense of the districts where the implementation of programmes takes place. The situation is exacerbated by the complex structure of MAAIF. Budgeting in the ministry is cumbersome due to many cost centres, programmes and sub-programmes. More important prioritization has been undermined resulting in resources being thinly spread across too many sub-programmes; and there is much duplication.

Table 4: Recurrent budget allocations across MAAIF departments, Shs mill

Source: Approved Budgetary Estimates MoFPED

1.91. As already alluded to, the share of headquarters is inappropriately high. However, there are possible explanations for this. In Table 5 we present the detailed recurrent budget for MAAIF headquarters. In FY2006/07, the expenses for “telecommunication, electricity and water expenses” are begun to be shown in the Headquarter budget, though accrued by all MAAIF units. These three expenses accounted for 21 percent of non-wage recurrent expenditure of Headquarters. Excluding these expenses from Headquarter budget, the share of Headquarter in total MAAIF recurrent budget reduces from 37 percent to 34 percent. 1.92. With the non-wage recurrent expenditure, travel costs (inland and abroad) accounted for 23 percent; and vehicle maintenance and fuel accounted for 20 percent. The former could probably be explained by the fact that headquarter staff represent MAAIF at various meetings and conferences both home and abroad; and the latter is probably attributed to the internal travel more specifically frequent trips from Entebbe to Kampala.

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Table 5: Recurrent budget of Headquarters, Shs mill

Source: Approved Budgetary Estimates MoFPED

1.93. In order to examine the extent to which MAAIF has utilized the recurrent funds to deliver on its mandate, the Study Team was able to compare actual expenditure among the main items for the financial year 2006/07. It is clear that staff salaries form the biggest percentage of 25%, followed by telecommunications (2.82%) and then allowances (2.77%) as shown in Table 5a. However, training has not been given priority it deserves as only 0.12% was expended while travel inland and abroad received 2.25% and 2.19% respectively. Surprisingly, the expenditures on printing, stationary, photocopying received 1.50% more than training by 1.38%. This kind of allocations reduces the effectiveness of DSIP and cannot enable MAAIF deliver on its mandate effectively and this has been highlighted in PER 1&2 Report. Table 5a: Recurrent expenditure on major items at MAAIF in Financial Year 2006/07.

Approved % Codes Details of Account (item) Budget Total Releases % Eff Share 211101 General Staff Salaries 2,408,177,000 2,086,181,955 86.63 25.53 211103 Allowances 288,940,000 226,454,550 78.37 2.77 221003 Staff Training 39,793,000 9,559,579 24.02 0.12 Printing, Stationery, Photocopying 221011 etc 130,681,000 122,957,625 94.09 1.50 222001 Telecommunications 231,527,000 230,027,000 99.35 2.82 General Supply of Goods and 224002 Services 68,275,000 50,064,969 73.33 0.61

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227001 Travel Inland 267,030,000 183,574,901 68.75 2.25 227002 Travel Abroad 237,597,000 179,351,638 75.49 2.19 227004 Fuel, Lubricants and Oils 215,320,000 183,052,621 85.01 2.24 228001 Maintenance - Civil 4,512,000 1,568,213 34.76 0.02 228002 Maintenance-Vehicles 202,685,000 167,702,884 82.74 2.05 Maintenance of Machinery, 228003 Equipment 122,903,000 100,766,039 1.23 1.23 Total Recurrent Budget 9,398,177,000 8,171,096,982 100.00

Note: This covers the 10 department Source: Department of Planning and discussions with MAAIF Staff.

1.94. While in the recurrent expenditures there are staff salaries, in the development expenditures, contract staff salaries are paid out as shown in Table 5b. It is again surprising that only 50.31% is expended on the goods, services and supplies during FY2006/07 while 49.69% accounts for recurrent expenditure in the development budget which is close to each other. This kind of expenditure does not deliver on the mandate of MAAIF and it is appropriate that the development component should live to its name and usefulness. The expenditure on telecommunication is again high accounting for 0.42% while 5.57% was expended on item (s) not mentioned. The expenditures on allowances accounts for 8.01% more than 7.12% of what was expended on workshop and seminars. These findings were also emphasised in PER 1&2 Report on the relevancy of having recurrent and development expenditures and yet in practice they are not any different from each other. Table 5b: Development expenditure on major items at MAAIF in financial year 2006/07.

Codes Item Budget Releases % Share 211101 General Staff Salaries 211102 Contract Staff Salaries (incl. casual) 151,400,000 143,851,014 1.29 211103 Allowances 942,400,000 890,337,235 8.01 221002 Workshops and Seminars 113,300,000 98,859,677 0.89 221011 Printing, Stationery, Photocopying etc 80,000,000 80,000,000 0.72 222001 Telecommunications 56,000,000 46,442,000 0.42 224001 Medical and Veterinary Supplies 1,352,000,000 5,180,815,800 46.59 224002 General Supply of Goods and Services 418,200,000 402,806,753 3.62 227001 Travel Inland 0.00 227002 Travel Abroad 0.00 227004 Fuel, Lubricants and Oils 405,000,000 364,300,576 3.28 228001 Maintenance - Civil 0.00 228002 Maintenance-Vehicles 104,000,000 87,200,965 0.78 228003 Maintenance of Machinery, Equipment 0.00 312206 826,600,000 619,950,000 5.57 Total 8,263,600,000 11,120,441,351

The selected projects: FITCA, NSADP, Livestock Disease Control, NLPIP, Support to Fisheries Development, VODP, FIFCO Source: Planning Department and discussions with MAAIF Staff.

1.95. The Accounts of MAAIF are characterised by percentages of unspent balances and analysis has been made on the expenditures over the period 2005/06-2007/08 as 27 Economic Policy Research Centre (EPRC)

Uganda Public Expenditure Review Phase 3 shown in Table 5c. The unspent funds are high in fisheries resources with 0.881% in FY2007/08, followed by crop protection (0.34%), and later headquarters (0.331%). Similarly, fisheries resources accounts for 0.22% of the unspent balances in FY2006/07, followed by crop protection (0.251%) and headquarters (0.215%) while headquarters had 0.791% in FY2005/06 which remained the highest as compared to other departments. The absorption of funds exhibited in the various departments and directorates cumulatively offers partial explanations on the low performance on the achievement of some of MAAIF objectives. Table 5c: Detailed recurrent budget performance for the financial years 2005/06-2007/08 in the various MAAIF departments

Detailed Recurrent Budget Performance for Financial Years 05/06 – 08/09 U.Shs.bn ’05/06 0607 07/08 Prog Description Budget Actual Unspent Perf% Budget Actual Unspe Perf Budg Actual Unspent Perf nt % et % 1 Headquarter 4.248 3.457 0.791 81.4 3.7024 3.652 0.215 98.6 2.642 2.312 0.331 87.5 2 Directorate 0.058 0.044 0.014 75.9 0.0411 0.036 0.0045 87.6 0.038 0.0155 0.023 40.8 of Crop Resources 3 Farm 1.081 1.049 0.032 97 1.12 1.07 0.05 95.5 1.45 1.441 0.009 99.4 Development 4 Crop 0.784 0.713 0.071 90.9 0.834 0.765 0.069 91.7 0.813 0.474 0.34 58.3 protection 5 Crop 1.463 1.423 0.04 97.3 0.197 0.172 0.251 87.3 0.207 0.198 0.01 95.7 Production 6 Directorate 1.417 1.392 0.025 98.2 1.205 1.183 0.0212 98.2 1.325 1.322 0.003 99.8 of Animal Resources 7 Animal 0.939 0.917 0.022 97.7 0.909 0.853 0.056 93.8 0.889 0.885 0.004 99.6 Production 8 Livestock 0.584 0.586 -0.002 100 0.562 0.507 0.055 90.2 0.562 0.526 0.036 93.6 Health and Entomology 9 Fisheries 0.567 0.425 0.142 75 0.587 0.367 0.22 62.5 1.934 1.054 0.881 54.5 Resources 10 Agricultural 0.269 0.26 0.009 96.6 0.33 0.29 0.04 87.9 0.295 0.207 0.088 70.2 Planning Total 11.41 10.266 1.144 89.9 9.4875 8.895 0.9817 93.8 10.15 8.4345 1.725 83.06 5 Source: Report of MAAIF on Budget Performance,2007/08

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1.96. Under the different vote functions Annexes 26- 32, allocations to animal health and entomology from the recurrent expenditure is low as it varied from 0.507bn to 0.586 bn over the period with 0.562 bn in the FY2007/08 and this explains the low performance on the control of livestock epidemic disease and vector control. The interventions that this vote function of animal resources provides services that are non- excludable and non-rivalries. This is also less than what was estimated in the budget requirements in the DSIP and this offers the implication that the guiding document has not been effectively utilized. 1.97. The allocation to crop production has attracted allocations reducing in amount from 1.423 bn in FY2005/06 to 0.207 bn in FY2007/08. This allocation is not any closer to the budget requirements made in the DSIP in the two subsequent financial years. There is need to realign the allocation of resources to the importance attached to priority areas in the guiding document. 1.98. Similar allocations made to supervision, monitoring, evaluation and statistics should be scaled up to enable the APD carry out activities that will guide in the decision making from time to time. The allocation to above activities has been reducing in amount from 0.353 bn in FY2005/06 to only 0.137 bn in FY2007/08. This practice should not be overlooked as it curtails the efforts of the technical staff from achieving department objectives. There is need to adopt a scientific approach to resource allocations and the most appropriate one has been the use of department percentages in the DSIP. 1.99. The institutional development has also been allocated funds that not in any close to that reflected in the DSIP. Under the recurrent expenditure, allocations were reduced from 0.834 bn to 0.646 bn while the share of the headquarters was increased from 1.745 bn to 2.117 bn over the period. This situation should be revisited to allow departments contribute positively to the mandate of MAAIF and departments that have exhibited low absorption of the funds should be redistributed to other key ones to increase efficiency and effectiveness in the delivery of services. 1.100. The MAAIF recurrent budget has no explicit capital expenditure. Capital expenditure has been financed exclusively through donor-financed and also standalone GoU Development Projects. This means that meaningful implementation of agriculture activities is done with donor funds. Next section analyzes the development projects and assessment is made on the extent to which they are contributing to the achievement of MAAIF mandate and objectives.

Development Projects: economic composition of expenditure

1.101. During the period under review, there were 24 development projects under to MAAIF, with the total budget of Shs189.3bn, translating into 92.4 percent of total MAAIF budget, both development and recurrent (Table 6). 1.102. Table 6 provides details on the economic composition and major funding items. The largest group of expenditure belonged to the non-wage recurrent budget (72.7 percent), while the capital expenditure accounted for only 24 percent of total development budget. Against the information, the actual economic composition of total MAAIF

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Uganda Public Expenditure Review Phase 3 expenditure (excluding grants and domestic arrears) is presented in the last part of Table 6. The capital expenditure accounts for 22.3 percent of total MAAIF expenditure, while the non-wage recurrent expenditure accounts for 72.7 percent.

Table 6: Development and recurrent budget of MAAIF, Shs mill

Source: Approved Budgetary Estimates MoFPED Note: In the project documents the donor funds are expressed in various monetary units, varying from UA and US$ to Euro. In table 5, the donor contributions are converted into Shs by using the market exchange rate.

1.103. Table 7 shows the crop sector was the dominant recipient of both capital and non-wage recurrent expenditure. It is followed by the livestock sector and fishery. Despite the importance of the crop sector, its performance has stagnated over the years due largely to limited access to agriculture loans which has led to decreased access to farm inputs, inadequate resources to implement crop development programmes. Not surprisingly given the changing world market prices for agricultural export commodities and variable rainfall experienced, real GDP rates for the sector have fluctuated considerably.

Table 7: Economic composition of development budget by sector, Shs(m)

Source: Approved Budgetary Estimates MoFPED

1.104. The economic composition of total MAAIF budget in terms of the wage bill, capital expenditure and operation expenses can be analysed in relation to their trends over the years and the following conclusions can be drawn from the above analysis: 1.105. The wage bill in total development budget was only 5 percent. In contrast, in the overall national budget, the employee costs accounted for 50 percent of total

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Uganda Public Expenditure Review Phase 3 spending, putting the significant burden on finding the fiscal space for infrastructure and other capital expenditure (PER, 2007). Yet the picture is different for the agricultural sector. Although one needs to make a distinction between the employee costs of front- service providers and the staff at MAAIF level. The employee costs of the former are not to be even considered for cuts but there is no clear-cut answer for MAAIF in Entebbe. Therefore the share of wages alone of 46 percent of MAAIF headquarter recurrent budget seems high as MAAIF does not deliver any direct services to beneficiaries besides supervision and monitoring to a certain extent. 1.106. Similarly, the share of capital expenditure in total MAAIF budget has been inappropriately low. In spite of growing in absolute terms, the share of capital in total budget remained at 22 percent, on average. Furthermore, the actual disbursement of projected and budgeted funds has been low at 40-50 percent, while the actual outturn of recurrent was reported at higher rates. 1.107. The share of non-wage recurrent expenditure was high at 73 percent, but the share of operating expenses that allow the staff delivering front-line services was about 30% of total non-wage recurrent. We cannot make any conclusion, except the inappropriateness of large share of non-wage recurrent spending in total budget. 1.108. The quality and sufficiency of MAAIF services on enabling environment, laws, regulations, monitoring of markets, enforcement of rules and standards is quite a challenge. One of the major limitations is that MAAIF has not fully restructured its establishment and this has created several inefficiencies. The findings reveal that there are inadequate staffs in most of the departments like fisheries, animal health including units like laboratories etc. This has constrained most of the activities like enforcement of rules and standards, regulations among others. At the same time, the roles and responsibilities of MAAIF and how it relates with LGs needs to be reviewed as it does not supervise its staff like other ministries e.g. education, health, water and sanitation, finance etc. On the enforcement of rules and standards, MAAIF services are characterised with non payment of law enforcement and technical officers, poor coordination, and lack of appropriate guidance for the implementers. This is evident in the control of animal movement and similar findings were noted across all the visited districts. Allocative efficiency of public spending

1.109. In this section, we look at the allocative and technical efficiency of delivering goods and services to beneficiaries through Development Projects, and make conclusion whether MAAIF (i) allocates funds to right priorities; (ii) finances public vs. private goods; (iii) does right things with allocated funds (technical efficiency), and thus overall is prepared to move from projects to budget expenditure management. 1.110. The functional composition of MAAIF spending was analyzed in the Phase II report. It is presented across 12 major priority areas, with both “desirable” expenditure from Development Sector Investment Plan (DSIP) and “proposed budget allocation” for 2006/07 (Table 8). Several conclusions can be derived from the proposed budget allocation as below: 1.111. First, agricultural research & technology development, and agricultural advisory services accounted for 52.6 percent of MAAIF budget in 2006/07. The largest expenditures were capacity building for seeds improvement and animal breeding (12 percent) and infrastructure (7 percent). This sounds like a quite healthy composition that

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Uganda Public Expenditure Review Phase 3 is likely to be most effective in spurring pro-poor agricultural growth. Second, there are wide variations between DSIP and actual allocation. The largest under-financed areas are institutional development; capacity building for Sustainable Land Management (SLM); and plant and pest disease control, regulation and certification. Lastly, the disconnection arises mainly because DSIP allocations are desirable expenditure (both recurrent and capital expenditure), while the actual budget allocation is based on (i) the project-based allocations that are medium-term commitments, and (ii) also political decisions within available non-earmarked budget.

Table 8: Proposed MAAIF budget allocations in relation to DSIP proposals DSIP at Proposed MTEF Priority Description 2006/07 budget as % Area prices allocation DSIP Shsbn Shsbn % 1 Institutional development for agriculture sector 16.34 7.42 45.4 institutions and local government 2 Capacity building for irrigation, drainage, 16.65 6.95 41.7 water harvesting, soil and water conservation and rangeland management 3 Agricultural planning and policy 1.83 1.79 97.8 4 Capacity building for production of improved 15.74 19.63 124.7 seeds, planting materials and animal breeding stock 5 Livestock epidemic diseases and vector control 10.46 9.75 93.2 6 Regulatory services for livestock and fisheries 7.33 4.83 65.9 7 Plant pest and disease control, regulation and 8.10 1.80 22.2 certification 8 Processing and marketing of crops, livestock 4.69 3.92 83.6 and fish 9 Agricultural research and technology 41.32 25.58 61.9 development 10 Agricultural advisory services 65.35 62.81 96.1 11 Construction of supportive physical 13.38 11.67 87.2 infrastructure (fish landing sites, livestock markets and slaughter facilities) 12 Promotion of increased agricultural production 1.32 1.38 104.5 and productivity (food security)

TOTAL 202.51 157.53 77.8 Source: Agricultural Sector BFP 2007/08 Section 4

1.112. How do we context the above observations? First of all, it is quite difficult to derive the function composition from existing projects. Most of them are cross-cutting, implying that attribution of capital and recurrent expenditure to specific priorities is not easy task, if possible at all. One needs to engage with DSIP team and understand their allocation principles. Second, the approved budget deviates from actual released and utilized budgets. We do not have information on all projects and there is need to know how the “desirable” compositions are derived. 1.113. Although an allocative efficiency of MAAIF spending is likely to be good, the key is to ensure a high technical efficiency of this spending. The focus on technical efficiency is very important because if technical efficiency is good, the benefits of the

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Uganda Public Expenditure Review Phase 3 existing good allocative efficiency will be realized and vice versa. This is also a pre- condition to request for increased budget allocation to MAAIF. But if effectiveness of delivering goods and services is low, the good allocative efficiency would not matter making it difficult to make a case for a larger budget for MAAIF. 1.114. Overall, however, there are three priority areas where more resources are highly desirable – physical infrastructure (including irrigation), pest and disease control, and animal health. These are clearly public goods and emerge as key binding constraints to agricultural growth. However, the gap can be filled through increasing funds from national budget or through expenditure re-allocation within MAAIF. Therefore taking resources out from MAAIF is quite technical and the technical analysis is a key to understand if it makes a sense to increase overall spending of MAAIF or MAAIF has the capacity to effectively absorb greater funds. 1.115. Surprisingly, animal health provides an alarming story as livestock diseases are placed in a position of low priority under MAAIF. The budget allocations towards the disease control are quite very small, irregular and unpredictable. According to the findings, MAAIF is capable of detecting and controlling only a sixth of dangerous diseases. There is only capacity to detect diseases caused by ticks and tsetse but virus- caused diseases are not traceable at all. Central veterinary laboratory is understaffed and ill-equipped to make appropriate tests and in most instances samples are sent to other countries like Italy and wait for 2-3 months to receive the results. This situation has a huge negative economic impact both nationally and internationally. Similarly, the implication is that a healthy cow matures and gives a calf in 2.5 years while the cow with disease is estimated to take 4 years. Amidst the challenges of managing animal health, there is a continuous supply and distribution of animals from many projects with less support to animal health. 1.116. We endeavour to illustrate the challenges of animal health with citing performance based on the National Livestock Productivity Improvement Project (NLPIP). Table 9 reveals a high adult cattle death rate of 8.5 percent and 2 percent recorded abortions. Table 10 presents data on one of the farm that participated in the NLPIP. It is clear that the goats that were supplied to this farm registered nearly 14 percent deaths and abortions. This situation reveals the inefficiency in the provision of veterinary services which are less supportive in the programmes that involve livestock distribution.

Table 9: Number of cattle distributed and their Performance in various districts Characteristic Number % Total number of animals so far distributed 11,773 Deaths of adult animals distributed 998 8.48 Births 6,079 51.64 Abortions 235 2.00 Male calves 3,127 26.56 Female calves 2,912 24.73 Pass on 888 7.54 Source: NLPIP Project Documents

Table 10: shows the performance of Ankole cows and Goats at Ruhengyere Farm Ankole cows Goats Numbers percentage Numbers percentage

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Total Number Distributed 2,186 270 Births 683 31.24 57 21.11 Deaths of calves/kids 37 1.69 20 7.41 Abortions 79 3.61 20 7.41 Still births 4 0.18 4 1.48 Sold as steers 4 0.18 0.00 Old stock dead 32 1.46 20 7.41 Current old stock 1,553 71.04 83 30.74 Current calves/kids 633 28.96 37 13.70 Additional 150 55.56 Source: NLPIP Project Documents

1.117. Furthermore, the project reports also indicate that the Zebu cattle herd that was procured for genetic improvement also suffered many deaths due to Contagious Bovine Pleuro Pneumonia (CBBP) from post-mortem findings. Even after the herd was vaccinated, new clinical cases continued to emerge and yet the animal health department of MAAIF is still constrained in its operations. This situation is exacerbated by lack of enough pastures due to a prolonged drought in some of the beneficiary areas. NAGRC&DB, therefore, proposes to be facilitated to purchase antibiotics like tyrosine for the affected animals and to speed up the rehabilitation works, especially bush clearing and perimeter fencing for both farms to ensure enough pastures for the herd. 1.118. Technical efficiency of MAAIF expenditure can be analysed through its development budget. It delivered goods and services through development projects. From 24 projects, 8 donor-financed (and co-financed by GoU) projects accounted for 86 percent of total development budget. All projects are shown in Table 11, with the major one highlighted. The donor contributions accounted for 84 percent of total development budget.

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Table 11: Donor and GoU budget allocations in development projects, Shs(m)

Source: Approved Budgetary Estimates MoFPED

35 Economic Policy Research Centre (EPRC) Uganda Public Expenditure Review Phase 3

1.119. Of the total development project budget, capital expenditure accounted for only 24 percent and the major capital items are presented in Table 12. These included non-residential buildings: (i) livestock markets and slaughter centres which are supported by NLPIP; (ii) markets and DFIs under the support of Northwest Smallholder Agricultural Development Project (NWADP); (iii) fish landing sites are supported by Fisheries Development Project. Other expenditures are extended to Community roads and bridges under NWADP; Livestock (oxen, goats, in-calf heifers) are financed by NLPIP, Farming in Tsetse fly infested areas (FITCA). Machinery and equipment were also procured under various projects while land was procured under Vegetable Oil Development Project (VODP).

Table 12: Economic composition of expenditure in the Development Projects, Shs mill

Source: Approved Budgetary Estimates MoFPED

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1.120. Under the non-wage recurrent expenditure, the major item is “supply of goods and services” that accounted for 45 percent of non-wage recurrent and 33 percent of total development budget. This excludes veterinary drugs, allowances, fuel and oil, vehicle maintenance, staff training, workshops, consultancy services, and in most cases, also transports costs and vehicles. The supply of goods and services included seeds, seedlings, fertilizers, chemicals, sprays, credit, and other inputs. Most of these goods are private in nature and can be considered as subsidies. Put simply, about 33 percent of development budget was used for private subsidies. This reduces the economic benefits of the public spending. This poses a challenge of ensuring desirable technical efficiency of public spending when one assumes moving to the budget support modalities. 1.121. The implementation arrangements of the donor-financed projects involve both MAAIF and districts. The donor-financed projects are managed by MAAIF but most are implemented at district level. Districts receive funds on a Special Project Account and are responsible for overseeing activities of sub-counties and service providers, and also procure small contracts. Large procurements are centralized at MAAIF level as it is argued that LGs either do not have adequate procurement capacity or are unable to control the abuse of money. 1.122. In almost all projects, a large deviation between projected and actually utilized funds was noted (Table 13). And it varied by source of funding. For projects receiving funding from GoU, the deviation was largely explained by whether the project was protected by Poverty Action Fund (PAF) or not. There is no accurate picture across all (or at least major) projects and the team works on this. But the preliminary findings for NLPIP illustrate the magnitude of the problem. Only 40 percent of the projected GoU funds were made available to MAAIF during 2004/05-2007/08, and only 58 percent of those funds were actually utilized by districts. Similar observations were noted with donor and GoU contributions NWSADP.

Table 13: GoU contributions to the Project, Shs mill

Source: Approved Budgetary Estimates MoFPED

1.123. The possible reasons for lagging actual use of donor vs. GoU contributions are different. The GoU contributions deviate from the projected funds for reasons not much related to the project implementation status. They are mainly determined by an overall budget management and the goal of macroeconomic stability, and vary with PAF vs. non- PAF projects. In addition, the GoU contribution has often lagged with actual disbursement when LGs were supposed to co-finance the projects. On the other hand, donor funds are usually lagged because of procurement delays and of non-release of GoU funds. 1.124. Much as GoU contribution to development projects is small relative to the donor contribution, we should not underestimate the negative effect of uncertainty of 37 Economic Policy Research Centre (EPRC)

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GoU counterpart funding. This delays project implementation both directly and indirectly. We illustrate this by use of examples. Indirectly, the use of donor funds is trigged by activities, which are agreed to be financed by GoU. For example, if a project procures 1,000 in-calf heifers (using donor funds) but cattle must be checked by veterinaries (using GoU funds), a delay in GoU contribution delays the use of donor funds, and even may lead to cancellation of procurement. Another example, inconsistent GoU contributions hamper the ability of districts to utilize these funds. This inability to provide adequate counterpart funding by the GoU has resulted in the MAAIF failing to utilize the available donor funds on shared costs with donors. The GoU should improve on the allocation of counterpart funding so that projects are timely implemented. Ceiling should be communicated in time, so that implementers are cautious when planning for the activities. This will also help in reducing the funding gap problems.

The major problems with the implementation of the most projects and programme activities

1.125. The delayed ratification (a year of more) after the project effectiveness reduces the projected benefits. According to the economic analysis of NLPIP, for example, a year delay in project implementation is estimated to reduce Economic Rate Return (ERR) from 23 to 18 percent. Other problems included different procurement regulations between donors and GoU, complex procedures to open Special Project Account at district level especially if the project includes more than one ministry (Farm Income Enhancement Project). 1.126. It is assumed that weak procurement and fiduciary capacity at district level necessitated for MAAIF to adopt centralized procurement of most goods and civil works. This however is assumed to lower the price because of larger procurement which cannot be executed at the district level. 1.127. Unrealistic cost estimates in the original design resulted from the mistakes made in the original estimate and also evolving price of livestock influenced by the export and domestic markets. 1.128. Other emerging challenges were shortage and non-release of GoU funds, delays in acquiring land for infrastructure and other community projects, exclusion of credit component from other sub-components that are directly controlled by the district coordinator, difficulties to operationalize the credit services in the beneficiary districts and use of unsustainable Saving and Credit Co-operative Organizations (SACCOs) with low technical capacity and high interest rates; slow utilization of cost-recovery for proposed goods e.g. animal sprays, drugs, etc. The failure of seed market to make good quality seed accessible to farmers after they got to know technology in a project and insecurity in some regions (Karamoja and Acholi under NLPIP) adequately affected the implementation. 1.129. As earlier pointed out in PER1&2 Report, the DSIP has not been used effectively as the basis for drawing up the sub-sector budgets, and this has reduced the usefulness of the document. The Study Team believes that in the current review of the DSIP, the technical staff will emphasise prioritization and work plans should based on the key guiding documents. The APD should continuously remind the staff of the

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Uganda Public Expenditure Review Phase 3 importance of the DSIP because it was drawn basing on the mandate of MAAIF and all must contribute towards its achievement.

Emerging implementation issues: 1.130. Having looked at the implementation problems, there are benefits of moving from project to budget support. These include:

• Limited short-term flexibility of donor funds to be shifted across various expenditures. Some expenditure is not eligible at all for donor funds. Plus, no parliamentary ratification for each project is required.

1.131. However, constraints have been identified in the project implementation under MAAIF.

• Weak control over fund use at district level, weak procurement capacity at district level, non-release of GoU funds; and • Weak procurement capacity at MAAIF level, unsatisfactory reporting of results and actual achievements, weak regulations and quality enforcement on seeds and other input markets.

Administrative Structure of Public Expenditure Flows

1.132. Given that PETS are designed to gather information on public expenditure flows, resource uses and services sector agents’ behaviour, an adequate understanding of the institutional arrangements through which public resources are allocated to service providers is fundamental. In this section, we discuss the administrative structure and flows in order to apprehend the task facing tracking surveys and the methodological choices that are required to adequately track resource use and flows.

The public Administration Resources Flow Structure

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1.133. Generally, resource flows in sectors are complex. The various resources required for public service delivery originate from several sources (central government ministries, decentralized administrative levels, bilateral and multi lateral donors, NGOs), and take various routes in the organizational system. In addition, these resources are generally governed by different allocation rules, administrative processes, recording and accounting procedures, etc. An initial stage in any tracking surveys is thus to identify and analyse the nature and characteristics of these various administrative structures and flows, in order to grasp their roles and contribution to service providers’ resources. 1.134. Figure 1 depicts the administrative structure and resource flow system in the agriculture sector. A two tier hierarchy is represented (Central Government and LGs) through which resources flow to local service providers. In this case Central Government allocates to LGs. Other important actors to consider here in the service provider supply chain are the donors. 1.135. In cases of combined PETS/CSC approach, the focus of the inquiry, in addition to public providers, should be taken into account other partners. This relationship is important to grasp, especially with respect to agriculture, the kind of services and facilities put in place. 1.136. In Uganda, the flow of donor funds goes directly to the project management unit like this case under agriculture. This is because there are several ways of financing activities in Uganda and these include budget support, project financing, programme among others. In this case, it should be noted that the flow chart indicated in figure 1 above reveals that it is fairly easy to track funds from the donors to the project management unit (PMU) to the central procurement and districts and lastly to the service providers i.e.1&2 3 4&5; 4 7 5 8. This is when the goods and services are to be procured at the district level (5) as well as those that are procured at the central level (4) and distributed to various districts. However, it is quite not easy to track funds that involve procurement at the central level. This is because the information on the flow of funds is not easily obtained especially those that involve civil works and directly procured at the central level i.e. 1&2 3 4 6 8.

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Figure 1: Funding Flows in the Agriculture sector from Donors through central government and districts to the service providers

Central Government Donors (1) (2)

PMU(3)

Central Transfers to procurement districts (5) (MAAIF)- (4)

Civil works (6) Goods (inputs) (7)

Service provider (8)

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North West Smallholder Agricultural Development Project (NWSADP) Introduction

1.137. The NWSADP is one of the projects that were designed under the crop resources to enhance agricultural production and productivity, in a sustainable and environmental safe manner, for improved food and nutrition security, employment, widened export base and improved incomes of the farmers and started on 1st July 2002. The aim of the project was to improve agricultural productivity and marketing in the North West Nile region of Uganda. The project aimed to contribute to poverty reduction by enhancing food security and increased household incomes of smallholders. 1.138. This chapter analyses the major expenditures relation to value for money, benefit incidence and cost effectiveness. It describes the impact of the expenditures on the beneficiaries and more specifically on geographic location. It concludes with a detailed analysis of efficiency and the impact of project expenditures on the communities/beneficiaries and how MAAIF has delivered on its mandate under this vote function. The project was designed with four interlinked components which included the following:

• Production enhancement through promotion of improved seed and animal traction aims to improve land, labour productivity by increasing crop yields, encouraging improved crop combinations and expanding the area cultivated by households. Agro forestry and soil conservation will be promoted to reduce pressure open the natural forest resource and enhance soil fertility; • Improved marketing opportunities component that will develop a market information system, train marketers and improve market linkages within and outside of the region; • Rural infrastructure component, improving 200km of critical access roads, improving markets and rehabilitating district farm institutes; and • Micro credit, enabling up to 10,000 farmers, markets, animal traction rental businesses and agro processors to obtain credit.

1.139. This project was designed basing on the Plan for Modernisation of Agriculture (PMA) and in conformity with decentralization policy of GoU. The project is covering the districts of Arua, Adjumani, Yumbe, Moyo, Maracha-Terego, Nebbi and Koboko. Besides the project, the districts in the region also benefit from other programmes that include: NAADS, PMA, LGDPII, FIEFCO, WFP, DANIDA, and Agricultural extension services, PACE, Netherlands Embassy, GTZ and UNCHR. Implementation arrangements

1.140. In this section we present the implementation arrangements under this project. The project coordination unit together with the district are responsible for the implementation of different components under this project. In a similar way to other activities, the district was to take an increased responsibility for the implementation of the infrastructure development component. At the national level, there is a coordinator who is

42 Economic Policy Research Centre (EPRC)

Uganda Public Expenditure Review Phase 3 supported by the engineer, Accountant, monitoring and evaluation officer at the head office in Entebbe. However, a field office was established in Arua to coordinate the activities of the project. In each district, one staff from the production department was designated as a coordinator supported by other subject matter specialists and the accountant. Districts receive funds on a special account; districts are responsible for overseeing activities of sub-counties and service providers, and also procure small contracts. Large procurements are centralized at MAAIF level as it is argued that local governments either do not have adequate procurement capacity or unable to control the abuse of money. The Chief Administrative officer is the accounting officer at the district level. Some funds are released to the districts and are used to pay for the goods and services as planned while other activities are paid at the head office in Entebbe. 1.141. The major capital expenditure items include the following: (i) road rehabilitation including construction of bridges across the rivers and streams; (ii) non- residential buildings e.g. Construction of markets and district farm institutes; (iv) community roads and bridges; (iv) Provision of Ox-ploughs and traction technology; and (v) Water supplying plants. Other project activities included provision of agricultural inputs, training of farmers, and information dissemination on market prices Main findings

1.142. Having looked at the main components of the project, we therefore track funds and inputs, assess the allocative and technical efficiency of delivering of goods and services to beneficiaries through development projects, and make conclusion whether the project (i) allocates funds to the right priorities; (ii) finances public vs. private goods; (iii) does the right things with the allocated funds (technical efficiency), (iv) whether there is value for money, determine benefit incidence and thus assess the impact of the expenditure and propose alternative expenditures to improve on efficiency in the expenditures.

i) Tracking of funds 1.143. The tracking of funds under this project has not been easy as the figures provided by the project coordination office was inconsistent and in some instances much lower than district. Table 14 shows the funds released to various districts of North West Nile and there is an indication inconsistency in the figures provided. However, there are cases where funds released to districts are more than what was receipted at the district. For instance Koboko is believed to have received Shs.46,133,400 during FY 2006/07 but only Shs.32,368,575 was receipted reflecting 29.8% leakage. Similarly Arua district only receipted Shs.282,625,048 in FY 2007/08 against Shs.302,136,000 which is an amount of funds recorded at the project office and this reflects 6.5% leakage. The financial records of reveal that there was no leakage over the FYs 2006/07-2007/08. However, it is not clear as to why the project office claim to have not released funds to districts during FY 2005/06 and later provided figures that were much lower than receipted at the districts as shown in Table 14. Further discussions with project officers on the funds released to the districts and reasons provided were not satisfactory and the Team recommends that such practises should attract further Audit reviews for actions.

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Table 14: Financial transfers to North West Nile districts, 2005/06-2007/08 (Shs‘000)

2005/06 2006/07 2007/08 Total PMU: Arua 92,001 96,452 302,136 490,589 Koboko 11,242 46,133 113,867 171,242 Nebbi 40,994 205,701 323,238 569,933 Districts: Arua 127,423 313,860 282,625 596,485 Koboko 32,369 32,3689 120,878 153,247 Nebbi 214,473 205,710 323,238 743,420 Source: NWSADP project office and districts

5.8. The government contribution towards its obligation has varied from 74%-96% over the period under review (Table 15). Further scrutiny reveals that FY2006/07 receipted the highest percentage while 2005/06 received the least. In FY 2005/06, it is evident that the government contributed 74% which is a reflection of 22% lower than in FY 2006/07. However, the rate of change in the contribution recorded in 2007/08 was 8% and shows much lower contribution as compared to the previous year.

Table 15: Government’s contribution to the total budget of NWADP, (Million) 2005/06 2006/07 2007/08 Budgeted in project appraisal ADB, million US$ document 4.485 18.784 9.825 Funds released to MAAIF 2.676 2.945 13.656 Funds utilized by NPCU 1.447 4.895 6.924 Funds transferred to Districts 0.519 0.524 0.911 GoU, million Shs Funds approved 451.5 603 156 Funds released to MAAIF 334.8 578.3 127.3 Funds utilized 334.8 578.3 84.6

Funds utilized by Districts 859.7 836.9 Rate of actual to approved release, % 74% 96% 82%

Exchange rate used: 1 U$= Ush 1,500 Source: NSADP Project Office

ii) Economic composition of expenditure in development project 1.144. In order to determine efficiency in the expenditure under this project, it important to examine how funds are itemized under the various sub-components over the period. This itemization will simplify the analysis on the operation and maintenance, allowances in comparison with the actual delivery of goods and services. It will spell out whether the expenditures on the various sub-components have a poverty focus and

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Uganda Public Expenditure Review Phase 3 appropriate. This part analyses activities in the budgets that were fully contracted and managed at the district level. 1.145. Table 16 spells out the five components that were considered to be the critical ones through which financing of activities should be made and these included production enhancement, farm mechanisation, marketing opportunities, access road improvement, and technical assistance consultancy.

Table 16: Composition of Expenditures under NWADP for Moyo district, 2005/06-2007/08

MOYO DISTRICT

2005/2006 2006/2007 2007/2008 Actual Exp. %ge Actual Exp. %ge Actual Exp. %ge PRODUCTION ENHANCEMENT 1 Field Based Training 26,402,700 26.50 28,627,840 9.76 47,453,400 16.41 2 Building Constr. & Rehabilitation 0.00 0.00 0.00 3 Seed Multiplication & Distribution 3,974,400 3.99 4,549,492 1.55 0.00 Sub Total 30,377,100 30.49 33,177,332 11.32 47,453,400 16.41 FARM MECHANIZATION 0.00 0.00 0.00 1 Farm Mechanization/Traction 0.00 0.00 0.00 2 Communication Support 0.00 0.00 0.00 3 Agro-Forestry and Environment 0.00 0.00 0.00 Sub Total 0 0.00 0.00 0 0.00 MARKETING OPPORTUNITY 0.00 0.00 0.00 1 Marketing Information & Analysis 0.00 1,223,200 0.42 0.00 Sub Total 0 0.00 1,223,200 0.42 0 0.00 ACCESS ROAD IMPROVEMENT 0.00 0.00 0.00 1 Access road improvement (civil works) 25,858,600 25.95 186,654,914 63.66 193,506,000 66.92 2 Access road improvement (equipment) 0.00 0.00 0.00 3 Access road supervision 0.00 514,000 0.18 0.00 4 Vehicle & Equipment operations & maintenance 14,040,730 14.09 11,160,101 3.81 19,872,549 6.87 Sub Total 39,899,330 40.04 198,329,015 67.64 213,378,549 73.79 TECHNICAL ASSISTANCE/CONSULTANCY 0.00 0.00 0.00 1 Coordination and Management 15,840,005 15.90 28,808,645 9.83 28,320,600 9.79 2 Long term Consultancy 0.00 0.00 0.00 3 Improving Farmer Management Skills 13,524,000 13.57 31,672,900 10.80 0.00 Sub Total 29,364,005 29.47 60,481,545 20.63 28,320,600 9.79 Grand Total 99,640,435 100.00 293,211,092 100.00 289,152,549 100.00 Source: Moyo District, Project Accounts and discussions with staff

iii) Allocative and technical efficiency 1.146. The trend of the proportion of expenditures to agricultural related activities reveals that access road improvement received high priority within the development budget on Moyo district. 1.147. Table 16, for example reveals that over the years in Moyo district, firstly, access road improvement (civil works) account for an increasing majority of expenditure, accounting for an average of 52% of the total budget from 2005/06 – 2007/08. Compared to other expenditure items, access road improvement accounted for an increasing share of the total budget of 25.95% in financial year 2005/06, 63.66% in 2006/07 and 66.92% in 2007/08. Secondly, field based training receives the second biggest share of the total budget followed by vehicle and equipment operation and maintenance. This allocation sounds like quite a healthy composition that is likely to be most effective in spurring pro- poor agricultural growth. This reveals that on the overall, allocative efficiency looks to be 45 Economic Policy Research Centre (EPRC)

Uganda Public Expenditure Review Phase 3 fair and more so the operation and maintenance costs have been controlled as the change has been only 3.41% over the three years. 1.148. The project coordination and management accounts for 15.90%, 9.83% and 9.795 for the FY2005/06, 2006/07 and 2007/08 respectively and this is not only appropriate to facilitate the implementers of the activities but gradually reducing in amount. Since the implementers are civil servants, their salary is already catered for and this why there is an appropriate balance between operational, allowances that are embedded in the coordination and management component and investment expenditures. The final expenditures are in line with the planned and approved deliverables as all the five components received allocations. 1.149. Although training is important in nay project or programme, farmers claim they have had enough and they prefer more support in terms of provision of seeds and other agricultural inputs especially the women so that they can be able to increase on their production levels. For example, Moyo district allocated only 3.99% to seed multiplication in financial year 2005/06 against 26.5% to training of farmers. Similarly, only 1.53% was allocated to seed multiplication in financial year 2006/07 against 9.76% to farmers’ training. In this case there is need to balance this allocation as farmers are trained under NAADS, Agricultural extension services, LGDP and PMA. 1.150. Likewise in Arua district, routine road maintenance accounts for the biggest proportion of 44.96% in the financial year 2006/07 which is lower than 57. 61% recorded in 2007/08. However, we notice that access road supervision alone increased tremendously from 5.94% to 11.83% which makes it inappropriately high as compared to Moyo. Similarly, Koboko as indicated in the table below balanced its allocation in routine road maintenance which accounts for 31.86%, seed multiplication 13.50% and 8.65% for animal traction. Although expenditures in vehicles maintenance look to be high in all the districts, this may be explained by the number of field vehicles and the nature of the roads in the region. In the overall, allocative efficiency was achieved as most of the expenditures went to public goods more than the private goods and this increases the economic benefits of public spending. The percentage outturn spent on goods and services for example in financial year 2007/08 is high as 83.33% accounts for Moyo district, 88.38% for Arua and 61.76% for Koboko (Table 18). 1.151. Under this project, some of the expenditure in the procurement of goods and services included improved varieties of agricultural inputs like seeds of maize longe V, ground nuts serenut IV, beans, simsim, sorghum, and others which included oxen, ox- ploughs, planting materials of cassava, and vaccines and equipments for the veterinary department. Other items procured for works included hoes, wheel barrow, axes, rakes, slashers, pangas and cement. In these procurements, subject matter specialists are involved in determining the specifications on each item. However, the field findings reveal that as much as these items require specialized services, direct sourcing was high although the inputs were obtained from recognised research institutions and other suppliers. This kills the principle of competitive bidding and the prices varied widely across the region. Similarly, the prices were higher than those in the market and yet the items were procured in large quantities which could have attracted a lower price if privately supplied. 1.152. In future, private suppliers in specialised services should be pre-qualified early before so that competitive bidding is enforced. This approach improves efficiency in

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Uganda Public Expenditure Review Phase 3 terms of unit prices, quality and value for money. It also allows the private sector not only to participate in these programmes which are poverty focussed but also to empower them for sustainability purposes.

Table 17: Expenditure break down for Arua district under NWADP

2005/2006 2006/2007 2007/2009

Actual %ge Actual %ge Actual %ge

PRODUCTION ENHANCEMENT

1 Field based training 0.00 6,283,000 2.00 13,568,000 4.80

2 Seed Multiplication 78,477,829 61.59 67,838,400 21.61 4,340,000 1.54

3 Seed and Chem distribution 0.00 0.00 1,600,000 0.57

4 Seed multiply seed procurement 0.00 0.00 27,921,000 9.88

5 Assess performance of improved seeds 0.00 0.00 1,200,000 0.42

6 Revitalization of DFI 0.00 3,885,000 1.24 0.00

Sub Total 0.00 78,006,400 24.85 48,629,000 17.21

FARM MECHANIZATION 0.00 0.00 0.00

1 Animal Traction 0.00 25,901,822 8.25 39,178,600 13.86

2 Communication Support 0.00 2,517,000 0.80 0.00

3 Agro-Forestry 0.00 7,080,000 2.26 0.00

Sub Total 0.00 35,498,822 11.31 0.00

MARKETING OPPORTUNITY 0.00 0.00 0.00

1 Marketing Information 9,923,200 7.79 1,374,000 0.44 0.00

2 Farmer Education through Radios 0.00 0.00 600,000 0.21

3 Increase smallholders access to credit accessibility 0.00 0.00 3,742,000 1.32

Sub Total 9,923,200 7.79 1,374,000 0.44 4,342,000 1.54

ACCESS ROAD IMPROVEMENT 0.00 0.00 0.00

1 Routine Road Maintenance 12,075,000 9.48 141,103,000 44.96 162,821,716 57.61

2 Access Road Supervision 0.00 18,646,260 5.94 33,430,710 11.83

3 Road Tools 0.00 11,320,000 3.61 0.00

Sub Total 0.00 171,069,260 54.50 196,252,426 69.44

COORDINATION AND MANAGEMENT 0.00 0.00 0.00

1 Coordination and Management 0.00 10,710,500 3.41 0.00

2 Fuel for generator 0.00 4,279,451 1.36 0.00

3 Vehicle Repair 0.00 12,210,700 3.89 0.00

4 Construct Community Market (supervision) 0.00 711,000 0.23 0.00

5 DTAC meeting 0.00 0.00 345,000 0.12

6 Quarterly management meeting 0.00 0.00 1,631,000 0.58

7 Submission of quarterly report NPCU 0.00 0.00 70,980 0.03

8 Supervision by DPC 0.00 0.00 5,313,000 1.88

9 Supervision by subject matter specialist 0.00 0.00 3,388,000 1.20 Follow up accountability by CAO and Accounts 10 Assistant 0.00 0.00 1,601,750 0.57

11 DLC supervision 0.00 0.00 2,364,000 0.84

12 Procure tyres and spares for Motor cycle 0.00 0.00 8,820,000 3.12

13 Maintenance of Generator 0.00 0.00 3,080,000 1.09

14 Computer maintenance 0.00 0.00 4,271,000 1.51

15 Telephone, mails, internet, postage 0.00 0.00 900,000 0.32

16 Stakeholders meeting 0.00 0.00 850,000 0.30

17 Bank Charges 0.00 0.00 766,892 0.27

Sub Total 0.00 27,911,651 8.89 33,401,622 11.82

Grand Total 127,423,280 100.00 313,860,133 100.00 282,625,048 100.00 Source: Project Accounts office and discussions with staff

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Table 18: Expenditure break down of Koboko district under NWADP

2006/2007 2007/2008

Actual %ge Actual %ge

PRODUCTION ENHANCEMENT

1 Field Based Training 0.00 3,078,500 2.55

2 Seed Multiplication 6,750,000 20.85 16,312,800 13.50

3 Fruit Nursery Establishment 3,550,000 10.97 0.00

Sub Total 10,300,000 31.82 19,391,300 16.04

FARM MECHANIZATION 0.00 0.00

1 Animal Traction 0.00 10,460,000 8.65

2 Training 0.00 2,465,000 2.04

Sub Total 0.00 12,925,000 10.69

MARKETING OPPORTUNITY 0.00 0.00

1 Market Information 0.00 758,750 0.63

2 Training 0.00 3,742,000 3.10

Sub Total 0.00 4,500,750 3.72

ACCESS ROAD IMPROVEMENT 0.00 0.00

1 Routine Road Maintenance 5,160,000 15.94 38,508,000 31.86

2 Routine Road Supervision 1,707,550 5.28 8,953,000 7.41

Sub Total 6,867,550 21.22 47,461,000 39.26

COORDINATION AND MANAGEMENT 0.00 0.00

1 Field Supervisions 10,202,800 31.52 13,462,300 11.14

2 DTAC meetings 190,000 0.59 0.00

3 Report submission 314,000 0.97 3,103,500 2.57

4 Management meeting 2,055,750 6.35 2,127,000 1.76

5 Telephone costs 900,000 2.78 900,000 0.74

6 Motor Vehicle Repair/tyres 722,000 2.23 11,019,000 9.12

7 Bank Charges 347,475 1.07 450,078 0.37

8 Office consumables 0.00 3,242,500 2.68

9 Fuel for generator 0.00 2,296,000 1.90

Sub Total 14,732,025 45.51 36,600,378 30.28

MARKETING OPPORTUNITY 0.00 0.00

1 Farmer Group Discussion (Talk show) 469,000 1.45 0.00

Sub Total 469,000 1.45 0.00

Grand Total 32,368,575 100.00 120,878,428 100.00 Source: Koboko District, Project Accounts and discussions with staff

iii) Technical efficiency of the major project activities. 1.153. The major project activities were contracted out at MAAIF and one of the key findings of the tracking study has been, of course, evidence of public resource wastage. Under this project, most of the planned infrastructure contracted at MAAIF by the contracts committee has not been completed as shown in the picture below. Although allocative efficiency was fairly achieved across project activities, technical efficiency is still elusive and hence no value for money. This phenomenon is also associated with inadequate incentives and improper monitoring, coordination and enforcement within the

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Uganda Public Expenditure Review Phase 3 service delivery mechanisms. About 92% of the bridges in the districts have not been completed including roads which were poorly gravelled, and there was no evidence of field assessment of the planned intervention. The benefit incidence of the expenditures has not been achieved as most of the roads are not being utilised by the communities to access the markets. Although the project has not ended, the continuous extension of contracts for almost four times creates worries as most of them had an average of six months of implementation time. 1.154. Whereas the district activities are implemented as per the budget, time and specifications, those that were centrally contracted, have had varied technical inefficiencies that widely varied between planned costs and the actually utilized funds as well as altered plans and designs. The preliminary findings from the field indicate that North-West Agricultural Development Project displayed the highest magnitude of the problem. One of the main items that attracted high level of resource wastage was the procurement of TATA vehicles for the beneficiary local governments. All the vehicles that were procured worked for fewer years and field findings reveal that all are currently grounded. In terms of monetary value, a total of US $225,007.9 representing Shs.427, 515,010 was put at waste in the procurement of the vehicles which according to MAAIF is partially attributed to the AfDB procurement guidelines. This situation compelled MAAIF to procure Nissan vehicles at US$326,807 representing Shs.587, 722,968 and the aggregation of the expenditures totals to Shs.1, 015, 237, 978. 1.155. Another case in point is the construction of Moinya Bridge on Itirikwa River along Obilokongo-Moinya –Ayiri road in that attracted a cost overrun of 69.2% which is more than half the original contract sum and the time spent was 400% with 98% financial payment for 50% works done by the contractor. Similarly, the construction of Katu Bridge on Lurujo-Nyai road in Arua district attracted a cost overrun of 27% with 320% as time so far spent on the works and a total sum of money equivalent to 72% of the contract sum so far paid. 1.156. Associated with problem of improper coordination are the delays and irregularities in effecting payments of works certified by the engineers. The delays and other bottlenecks in timely releasing of funds have created negative effects on the quality of services, staff morale and the capacity of providers to deliver services. These delays were observed in the payments of contractors by MAAIF in particular those undertaking rehabilitation of roads, construction of markets and renovation of district farm institutes. The field findings indicate that on average certified works take about 2-3 months to be paid which has also caused inefficiency in the implementation of project activities. Similarly, the disbursement procedure between MAAIF and local governments was also found to have contributed to the delays in the progress of works.

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This is the construction site of Odoma bridge in Arivu sub-county in Vurra County, Arua district. It was together with Katu bridge awarded at Sh.486,310,000 and varied to Sh.558,240,000. The commencement date was 14th November 2006 and completion date was set on 13th April 2007 but because of failure to meet the decline, an extension was granted up to 13th August 2008. The physical works covered was assumed to be 70% over 320% of the time spent and 72% of the financial performance covered,(source: Monitoring and Evaluation Report, 2008).

1.157. By failure to minimise infrastructure costs and maximising the output and outcomes for a given set of infrastructure, MAAIF has not focussed on improving efficiency. One of the challenges for MAAIF is getting the right balance between sub- sectors and appropriate mix of infrastructure and ensuring value for money. Agriculture should go a step to review the efficiency of infrastructure procurement as a way of addressing efficiency given the large numbers of infrastructure procured under this project. On average the contracts committee takes 5 months to respond to a request presented on the technical issues. According to the monitoring report, for example a total number of 46 contracts have expired for the fourth time but there is no response on the future action. Similarly, the contracts committee is silent on terminating provisions which is even known by the project managers although the supervisors had requested for 50 Economic Policy Research Centre (EPRC)

Uganda Public Expenditure Review Phase 3 termination in order to improve on the technical efficiency. Case studies elsewhere have shown that decentralization of decision making has enabled better value for money in procurement of goods and services and enabled appropriate use of funds. For example Ministry of Local Government, Water and sanitation and Education have registered successful results under different programmes. iv) Value for money

1.158. All projects that were contracted out by MAAIF have crowded out some vital expenditure on certain items because of high cost overruns of infrastructures e.g. roads, markets. It was established that less than 10% of large projects were found to have been built to time, specification and budget. Where there had been cost overruns, this had been due to changes in the design required by the overall engineer who did not do adequate assessment at the initial stages. According to the respondents, the firm (MAZDA) which was contracted at the inception of the project produced poor designs of the infrastructure. This is exemplified by the changes in the design of most of the markets like Kubala, Ejupala, and Nyadri in Arua district. Similar scenarios were recorded in Lodonga and Merwa markets in . Innovations in the design of buildings was limited especially markets and the assessment reveals that there will be low utilization since it was not tailored to serve farmers. For example most of the markets had more lock-ups than the open shades and the distribution across the district is extremely inefficient as they are located in remote and isolated places with limited accessibility. Surprisingly, most of the infrastructure especially markets are being constructed on private land and there are cases of disagreement between individuals and district or sub-counties e.g. the water tank in Yumbe is on mission land which the priest had objected to, Keri market in Koboko and Nyaravur market in Nebbi where Subcounty authorities were still in disagreement with the land owners etc. 1.159. According to the monitoring and evaluation reports of NWADP August 2008, around 75% of the resources spent so far on rehabilitation of roads and construction of bridges would be wasted if no thoughtful intervention is made to complete the works. Basing on the same report, it has been estimated that 94% of the funds earmarked for bridges has been already spent on incomplete bridges with high levels of technical inefficiency. The field findings also reveal that contractors hardly accept recommendations made by the supervisors on the defaults as well as the materials used in their works which lowered the quality of the works. Although, the Team has been passively informed that the situation has changed of recent, the fact remains that infrastructure provision is beyond the capacity of MAAIF to handle. Therefore, to promote development in rural communities, funds should not only be allocated for access roads and bridges but technical efficiency should be a pre-requisite for development. In future funds should be allocated to locations where improvements lead to the widest possible positive effects. 1.160. Economic theory predicts that construction firm’s ability to control and maximise value for money is dependent on its ability to obtain key resources and the same time effectively monitor. For this particular project, there is high level of uncertainty surrounding the release of funds for the works done and this partially is attributed to the bureaucracy and conflict of interest in MAAIF. This irregularity of

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Uganda Public Expenditure Review Phase 3 release of funds has made the work very difficult for the district engineers as well as the construction firms to develop long term relationships with the suppliers of materials. 1.161. Surprisingly, district engineers’ facilitation is embedded in the project contract sum which is claimed through the contractor. Although this policy as known by the coordinators addresses the short comings of the government’s failure to meet the operation and maintenance costs, it does not address efficiency issues. This is because engineers and site clerks are not facilitated in time to ensure value for money and technical efficiency and this has had a negative bearing on the works executed. In short, numerous concerns about the quality of contract management and monitoring level needs to be improved. The implicit fear is that poorly managed contracts have not delivered or will not deliver the promised value for money. 1.162. With high level of inefficiency in the provision of market facilities, the envisaged increase in the number of women involved in selling farm produce as well as engaging in other economic activities will not increase or be achieved. The trade increase will not be achieved and serve as commercial as well as a social convergence zones, where villagers meet and interact, bringing other indirect social benefits to the communities. v) Benefit incidence of expenditures

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1.163. Under this project several trainings were carried out and focussing more specifically on farmers in areas concerning marketing and business skills. These trainings focussed on enabling the farmers to sell their products in bulky. Similarly, data on market prices of the agricultural products was collected and disseminated to the farmers through radios, extension staff and displays in public places like trading centres, churches, and administrative units like sub-counties. However, its performance deteriorated as the funding reduced and there is no sustainability arrangement in place. The expenditures on trainings were appropriate and female participation was high accounting for 55% while 45% for male but with limited participation of the youth and people with disabilities. Most of beneficiaries indicated that they attained primary education and this implies that those with no education did not directly get involved in the activities. On the overall, trainings benefited individuals with landholding averaging between 2-5 acres where land is communally owned. However, efficiency has not been achieved in linking farmers to buyers as well as embracing the bulking as differences in individuals’ day to day needs was widely reported in all the north-western Nile districts. 1.164. Most of the roads that are being rehabilitated are heavily skewed in favour of the rich households as they are not directly linked to the markets. In most of the districts visited, the poor tend to live in far remote areas with limited roads and/ or means of transportation, which constrains their access to markets and trading centres, and limits their economic opportunities. For instance in Nebbi, Yumbe, Arua and Adjumani districts rural communities on average are located 28km from the main road, and this distance is higher at about 45km on average as you move towards the isolated areas. There has been a limited poverty focus in the road sector expenditure in the visited districts. More funds went on rehabilitation and construction of new roads representing 63.8% of the project budget on roads and bridges as compared to maintenance of community access roads averaging 31.8% of the district local budgets (see details in annex ii). It could have been appropriate if the maintenance of community access roads budget was scaled up by 13% to achieve adequate intervention in this sub-sector. 1.165. The findings from the respondents reveal that field assessment as well as consultation was not adequately done with the beneficiary local governments. Thus the bridges were not only poorly designed but some were not included in the scope of works e.g. Esia Bridge on Odu-Kwoma road in Adjumani district. Similar omissions included gabion boxes, under estimation of width of rivers and failure to identify rivers across the roads e.g. Omuriba-Kangoo, Kova- Odramacaka, Leju-itia, Odima-kololo, Menjo-Yoro in Arua district etc. Further technical inefficiency was exhibited by contractors who did not only fail to achieve the gravelling thickness but also the compacting was not done and this was explained by the heavy vegetation on most of the roads. For example Aberi- Zombo road in Nebbi district, Mongoya-Oya and Majale-Kilaji roads in Yumbe and Arivu-Jayia-Opia road in Arua are among the roads that explain high level of technical inefficiency and no value for money. vi) Cost effectiveness 1.166. In all these roads, the cost effectiveness was not achieved as the unit cost varied from Sh.30,893,236- 38,552,415 per km which is too high as compared to the unit cost at the district managed roads under different programmes as well as those under Area Agricultural Modernization Programme (AAMP) which varied between Sh.8,000,000- 20,000,000. In future, engineers should involve the beneficiary local governments in the field assessment to minimise the costs and make the appropriate expenditure

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Uganda Public Expenditure Review Phase 3 interventions. The national project engineer recommended the interventions that were not appropriate in that some roads where rehabilitation was being carried out required total opening and this has stalled works on some of the roads e.g. Aberi-Zombo road in Nebbi district. This was one of the factors explaining why contracts have been extended for over 4 times without termination and Table 19 shows the performance of different contracts. 1.167. From Table 19, the analysis indicates that only 2 contracts out of 25 under road rehabilitation and construction of bridges are nearing completion and this means that 92% of the contracts are at risk. Similarly, only 2 markets out of 15 are nearing completion and it is implied that 86% of the contracts are also facing the same risk. On the overall, this project has not achieved the technical efficiency as well as the cost effectiveness as Sh. 23,040,190,165 which represents 55.8% of the total budget earmarked for infrastructure development is likely to be put at waste if the project ends in December 2008 without completion of the remaining works (see details in annex ii). 1.168. The field findings reveal that the technical inefficiency has failed the project on value for money and determining the benefit incidence has been hard. Some of the contractors lack technical and financial capacity to handle projects of such magnitude and this explains the inefficiency in the procurement unit. A clear case in point is the contractor of Dzaip market in Adjumani district who did not only lack technical and financial capacity but also abandoned the site. A similar case was cited at Lodonga market in Yumbe district where the foreman lacked knowledge on the duration of the project and also expressed ignorance as to having not seen any document to guide him on the site. Similarly, the unit costs for the infrastructures are quite high and yet the structures that are being constructed are simple e.g. some bridges and markets.

Table 19: Status of the project performance under different contracts Nature of project activity Contracts in Commencement Contracts % of % of number date nearing contracts contracts completion at risk risk free Road rehabilitation and 25 14th November 2 92 8 construction of bridges 2006 Construction of markets 15 12th June 2007 2 86 14 (Adjumani district) Construction of water 6 1st February 1 83 17 supply systems 2006 Rehabilitation of DFIs 2 30th July 2007 1 100 50 Construction of DFIs 2 5th December 0 100 0 2006 Source: Monitoring and Evaluation Reports, Project Office,2008

vi) Efficiency and micro-credit services

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1.169. While cognizant of Government efforts to increase availability of funds to the farmers through the micro credit institutions, there are major challenges that still bedevil improvement of utilization of these financial institutions. Broadly, insufficiency and inefficiency are cited as the two major problems that adversely impact the poor agriculture output. There is inefficiency that is associated with poor enterprise selection by low skilled loan officers under the micro credit component. Using findings from the field, we elaborate below inefficiencies that were identified in the micro credit component in the districts of Nebbi, Koboko, and Moyo. 1.170. Micro credit component is one of the components that were integrated in the project with the aim of availing loans to the farmers through the micro credit institutions known as SACCOs. While the number of farmers who have obtained loans has increased over time, technical efficiency has not been achieved as most of the funds are spent on non agricultural related activities. Notwithstanding, the amount provided is quite insufficient to enable the farmers purchase all the necessary agricultural inputs e.g. a farmer is allowed to borrow a minimum of 50,000-700,000 shillings basing on the loan security. This is too insufficient to enable a farmer to meet the cost of preparing land, purchase the inputs and planting. 1.171. However, the major concern about the component is the unrealistic conditions set for the loan applicants. According to the micro credit institutions in the districts, farmers are given a grace period of two months to begin paying the principle where as the interest which averages between 3-4% per month which transforms into 36-48% annually is paid immediately as the loan is given to the applicant. This is a major constraint to farmers particularly those who chose crop as an enterprise because the minimum gestation period for a simple crop like maize is 6 months. Surprisingly, whereas farmers are subjected to high interest rates, SACCOs pay an interest of 9% for an agriculture enterprise and 13% for commercial enterprise per annum to Micro Credit Support Centre (MCSC) which is just a third the interest paid by farmers. These institutions further, exert pressure on the few farmers who obtain the loans which forces them to sell their products at a price which is 20% lower than the actual price so as to protect their assets. On the gender aspect, women who do not own assets like land depend on their husbands to service the loans as they wait for the crops to mature and this has curtailed the level of participation of the non-married ones. 1.172. Among the other interesting findings of this study worth mentioning is the equity in the access to the micro credit services by location, income groups, gender and household land holding. According to the records at micro credit institutions, in several districts and sub-counties, there is a considerable difference in allocation of loans among individuals and this raises serious issues of equity among socio-economic and demographic groups. These variations seemed to be driven mainly by various factors ranging from enterprise selection to asset ownership. This study found out that loan provision had regressive characteristics that led to greater rich individuals receive more than the poor ones e.g. asset ownership and ability to pay. 1.173. This arrangement further has not benefited people with disabilities, unemployed and even very low income earners with small landholding of less than 2 acres because even loans obtained are not economically productive. Evidence from Nyaravur village bank in Nebbi and Koboko United Savings and Credit Society Limited reveals that on average a poor farmer is able to obtain a loan that ranges from Shs.20, 000-50,000 which is inadequate for one to invest in a viable enterprise. Inequity in this

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Uganda Public Expenditure Review Phase 3 sub-component of providing loans is therefore one of the challenges. This is so in a situation of high economic inequality and where individuals are required to provide security in order to access the loans. While relatively richer individuals obtain substantial amount of money, poor individuals hardly receive any and it is inadequate if provided. 1.174. Lastly, limited/ no involvement of subject matter specialists in assessing loan applicants explain the technical inefficiency. The findings from the districts of Nebbi, Koboko, Adjumani and Moyo, indicate that micro finance institutions are delinked from other components and this has affected its performance. The financial institutions have discouraged individuals from utilising loans into farming as they claim to be risky. Even the few who have attempted to engage in the direct agricultural production have not been advised on the suitable enterprises to engage in and this means the component has not been fully integrated within other sub components in the project. Besides, SAACOs suffer from lack of qualified and experienced staff e.g. loan appraisers, poor logistics, and weak support systems and this has resulted into low levels of loan recovery averaging between 55-59 percent. vii) Impact of the expenditures 1.175. Under the major component of the infrastructure development, there has less impact on the population as the main infrastructures have not been completed in all the districts. However, the production enhancement through promotion of improved seeds, animal traction and routine maintenance of access roads has had an impact on the population including the women. This has been noticed in the project activities that are directly controlled by the district authorities which have supported by the community access roads. In this case, it has been demonstrated that it cannot be taken for granted that allocating more budgetary resources to the sector will necessarily deliver better outcomes. However, this conclusion does not hold once efficiency is taken into account and the reverse is actually true. The recent increases in the maize, beans, cassava, and sweet potatoes production and utilization of the animal traction are partly due to these activities. The district technical staffs are currently focussing on improving production of grain legumes and other neglected cereals like to beef up the food security levels. However, these efforts continue to be impaired by low levels of funding. 1.176. On the use of micro credit component, the benefits are heavily skewed towards the non-poor and the male in particular. The loans provided exclusively benefit the households who have stable income flows and who are engaged in non-agriculture activities. viii) Major problems with implementation of the project • Turning to the problems, some observations do emerge under this project. According to the respondents, poor project coordination has delayed the implementation of the project because the decision makers are based in Entebbe; • The field assessment of the planned interventions was not adequately carried out and this has attracted variation and cost overruns in some projects; • The facilitation of the district technical staffs is irregular but also not directly released to the district. For example, the funds for district engineer’s supervision and monitoring are incorporated in the total cost of the contract which is paid to him by the contractor. This has impacted greatly on the

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quality of work as site clerks sometimes fail to meet day to day costs i.e. transport, feeding etc; • There is delay in approving payments for the contractors and most of them receive payments for the works done after two months; • Some sub-components like micro credit were not adequately integrated and this has failed the implementers to maximise the benefits. Other challenges were reflected in the taxation matters as who to pay was not clear e.g. withholding tax was at the centre of contravancy as to whether it was imposed on ADB or the supplier; and • According to the respondents, staffs in the production department are not only few but are poorly facilitated as most of them are not fully involved in the project work. The field findings show that official provisions on staffing are met in some cases but the huge staffing gaps exist.

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Concluding remarks

1.177. Having examined the expenditure trends, the progress of works more especially that was contracted at MAAIF, the sector needs to make headway towards improving financial planning, management and procurement at the sector level. With the projects attracting cost overruns all over and failure to complete within the specified time, there is need to strengthen coordination, monitoring and supervision to achieve the desired service delivery. Similarly, the ministry needs to allocate resources to priority areas that are well targeted e.g. financing additional labour and operational costs at the district level and have some direct impact to production. 1.178. The value for money study has highlighted issues of lack of capacity in some implementation units, non-adherence to standard procurement and financial management regulations, outright weak capacity of the private sector to which some contracts are awarded. The top-down approach to management in the sector also should be addressed to improve the impact of the sector at the lowest levels. 1.179. On the overall, this project has contributed to the promotion of crop production technologies, value addition in terms of using improved seeds, marketing, and farm development. However, there are still challenges in achieving mechanisation, sustainable use of natural resources, enforcements of regulations and standards on plant health and seed quality. 1.180. The ministry should review its position as to whether the management of project funds for activities at the local government level should be managed at the headquarters. In addition, the ministry should not accept loans that are donor driven or have components that demand massive donor implementation procedures as this has been one of the factors for the low utilisation of funds as well as procurement of items with a short duration its usefulness. 1.181. Lastly, the Ministry should adopt programme management modalities of Local Government Development Programme (LGDP) that has been implemented in local government since 2000. Similarly, impressive results have been achieved under School Facility Grant (SFG) programme under the Ministry of Education. In other areas, MAAIF should strengthen the links with other ministries in order to overcome the challenges.

National Livestock Productivity Improvement Project (NLPIP) Introduction

1.182. The NLPIP is one of the projects under Animal resources; with vote function objectives of increasing incomes, quality of poor subsistence farmers, household security improvement, employment and sustainable use and management of natural resources. It is a five year project funded by the African Development Bank (AfDB). It focuses more specifically on improving livestock productivity and marketing in the traditional cattle corridor. By the end of the 70s, due to the political instability and the resulting civil unrest, Uganda’s livestock industry experienced a decline of about 30% of the live stock levels of the pre 70s. The government of Uganda therefore sought assistance from donors to improve the live stock industry in particular the dairy component. The above project is 58 Economic Policy Research Centre (EPRC)

Uganda Public Expenditure Review Phase 3 as a result of the request by the government of Uganda and the recommendations made in the Meat Master Plan study. 1.183. This section focuses on expenditures as per the project components. Apart from a brief mention of the objectives and implementation arrangement, the section focuses mainly on efficiency and effectiveness more specifically on value for money, benefit incidence and cost effectiveness. It also makes comparison with the implementation arrangements under different programmes. The last section points out key issues that MAAIF should consider pertinent to improve on service delivery. 1.184. The sector goal of MAAIF is to achieve economic growth and poverty reduction. The project objective therefore is to increase house hold incomes of participating livestock farmers in the cattle corridor through increased livestock productivity and marketing. The project started in 2003 with 29 benefiting district in the cattle corridor but the benefiting districts have increased to 42 due to subdivision of the districts as shown below.

Table 20: Distribution of beneficiary districts by regions under NLPIP Regions Districts South-West Mbarara, Bushenyi, Ntungamo, Kiruhura Isingiro, Lyantonde, Ibanda, Central Kayunga, Mpigi, Luwero, Kiboga, Mityana, Mubende, Nakasongola, Nakaseke, Sembabule Northern Lira, Kitgum, Abim, Dokolo, Apac, Pader, Oyam, Amolatar, Eastern Kamuli, Pallisa, Sironko, Budaka, Kaliro, Kumi, Soroti, Bukedea North East Katakwi, Nakapiripirit, Kaberamaido Amuria Western Masindi, Kibaale, Buliisa, Kamwenge Kyenjojo Source: National Livestock Project

Implementation arrangement 1.185. MAAIF is the executing agency of this project. Project co-ordination unit (PCU) uses largely existing staffs that are established in the Directorate of the Animal Resources (DAR). Implementation of the project activities at local government level is through a designated officer who is a staff in the production department especially the district veterinary officers and is supported by the district project committee chaired by CAO. Other members on the committee include engineer, water officer, and environment officer among others. Under this study the use of districts and local governments in the analysis has been used interchangeably. 1.186. Similarly, the Breeding Stock is managed by National Genetic Breeding Centre and Makerere University Boer- goat breeding farm. The management, operation and maintenance of new/rehabilitated valley tanks and dams are a responsibility of the Community Water Users Association, while the maintenance of rehabilitated communal dips is in the hands of Communal Dip Association. 1.187. Lastly, Uganda Seed Limited implements the pasture seeds grown under contracts by private out growers and rangeland improvement on demonstration basis on

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Uganda Public Expenditure Review Phase 3 private farms. Livestock and range inventories are implemented by National bureau of Statistics and the forestry department respectively. Live stock markets and slaughter and their improvements were opened and are being maintained by private lessees. 1.188. On overall, MAAIF controls the biggest budget as it is responsible for procurement of goods, works and consulting services which are governed by provisions of GoU’s Public Finance Regulation, PPDA and consulting services financed by the Bank are in accordance to the Bank rules and procedures. Monitoring and evaluation is under taken by MAAIF on regular basis while quarterly visits to the project areas is the responsibility of MAAIF and all other participating agencies of the project and the district coordinators must visit the sites at least every 2 weeks and report to MAAIF. Project Components

1.189. This project is widely implemented in several districts comprises of five components namely: • Animal health; • Water supply and forage resources development; • Livestock restocking and genetic improvement; • Livestock markets infrastructure and information systems; and • The Project coordination unit

1.190. Broadly, the above components for example, animal health entails addressing the major vector-borne and epidemic animal diseases not covered by other projects through enhanced service delivery and support veterinary and regulatory services. There is sensitization of district and sub county leaders, farmers and veterinary staff about livestock diseases. Vaccinations are done against diseases like foot and mouth disease, lumpy skin disease, Brucellosis. There is also establishment of animal check points along cattle routes to check the status of animals, their welfare, animal movement permits, and licenses. Quarantines are put in case of disease outbreak however, due to poor facilitation for the policemen, veterinary officers and the local leaders, some of the check points are abandoned which leads to the spread of diseases country wide.

1.191. Under water supply and forage resources development there is; Pasture production and demonstration plots for legumes and grasses. Farmers are trained on pasture development and group development. There was distribution of inputs for pasture seed production in Kyangenyi and Kigarama sub counties in Bushenyi. Others were in Kakika, Biharwe, Nyakayojo and Rubaya in Mbarara.

1.192. There is also water development which is focussing on the construction of valley tanks and valley dams for semi-arid areas. The requirement under this component is the provision of land titles as such infrastructures should be provided on public land as required by the regulations of the Government. Four sites in Mbarara and two in Bushenyi were earmarked for valley tanks and dams; these were identified because they are semi-arid areas but with a lot of potential in cattle rearing and the sites include: • Biharwe, Rubaya, Kashari in Mbarara • Kigarama and Kagango in Bushenyi

1.193. Lastly, livestock genetic resources development involves restocking cattle and goats but it is mainly goats that are restocked. While Marketing, Infrastructure and

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Information Systems aims at improving the quality of livestock, meat and dairy products. There is construction and rehabilitation of slaughter sheds and livestock markets, provision of improved livestock market information, training in hides and skins to flayers, setting up of livestock and meat standards and setting up of data base management systems.

1.194. Broadly, the project intends to put in place the following infrastructures at various sites in different districts: slaughter shed in Nyakabirizi in Bushenyi; Kirambi Livestock market in Bushenyi; slaughter shed in Kakoba in Mbarara; Kyenshama livestock market rehabilitation in Mbarara; Fencing of Ruhengyere farm in Kiruhura; Fencing of Kazo livestock market in Kiruhura; Rehabilitation of Ruhengyere ranches in Kiruhura; Construction of Sanga slaughter shed in Kiruhura; Construction of Ikiki market in Budaka; Construction of a slaughter shade in Pallisa and Construction of a livestock market in Soroti Main findings 1.195. Here the study sheds light on the performance of the main component of the project, and then we therefore assess the flow of funds, allocative and technical efficiency of delivering of goods and services to beneficiaries, and make conclusion whether the project (i) allocates funds to the right priorities; (ii) does as planned with the allocated funds (technical efficiency), (iii) determine value for money (iv) cost effectiveness. i) Tracking of funds and inputs 1.196. 1.197. Table 21 reveals that there is leakage of funds transferred to districts. For example the records at project office indicate that Shs.30,230,000 was transferred to in the FY 2007/08 but records at the coordination office indicates that only Shs.28,980,000 was realised reflecting a shortfall of 4.1%. However, over the FY 2006/07, the figures at the project office tally with those receipted by Soroti district. Although the leakage is only 4.1%, districts claim to have received funds during FY 2005/06 and yet the project records indicate that no funds were released. Surprisingly, there are districts who are reflected as to have received funds from the project and yet in real terms not e.g. Bushenyi district is taken as to have received Shs.22,830,300 during FY2006/07 but records reveal that no funds were transferred. Similarly, Pallisa is also taken to have received Shs.23,990,000 over the period 2007/08 but only Shs.7,440,000 was receipted reflecting a leakage of 69% of the total funds. According to the coordinator, he attributed it to the cancellation of the release to the district and the process had to be restarted which only allowed that amount to be transferred. Generally, this project has recorded the highest leakage of funds and the expenditures are made without proper record keeping as the project office has not been keeping track of its expenditures. Further explanations provided to some of the concerns on leakages were still unsatisfactory and therefore financial records should be streamlined to avoid queries of this nature in the subsequent studies and follow-ups.

Table 21: Flow of funds and agricultural inputs under NLPIP 2005/06 2006/07 2007/08 Cumulative PMU ENTEBBE Procurement of Goats Mbarara 755 Bushenyi 400 Kiruhura 300 400 700

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Procurement of Heifers/Zebu Soroti 0 450 1,145 1,595 Pallisa 0 275 1,148 1,423 Financial Transfers to Districts, Ushs Mbarara 22,532,700 136,291,500 13,985,000 Bushenyi 9,634,000 22,830,300 10,800,000 Kiruhura 14,550,000 Soroti 16,086,500 48,530,600 30,230,000 Pallisa 16,086,500 50,212,900 23,990,000 Received at district level Mbarara Goats 755 Transfers (Funds) 10,034,200 114,350,734 Bushenyi Goats 400 Transfers (Funds) 9,535,000 Nil 9,535,000 Kiruhura 13,000,000 38,000,000 1,300,000 Goats 700 Soroti Heifers/Zebu 1,560 Transfers (Funds) 16,086,500 48,530,600 28,980,000 93,597,100 Pallisa Heifers/Zebu 1,353 Transfers (Funds) 16,086,500 50,212,900 7,440,000 Source: Project Unit and Districts

1.198. 1.199. Table 21 further shows that a total of 1,423 heifers were allocated to Pallisa district but only 1,353 heifers were received by the coordination office which reflects a leakage of 4.9% of the total heifers allocated. Similarly, under the same project 1,595 heifers were released to Soroti district but only 1,560 heifers were received indicating 2.2% leakage. 1.200. It evident that the government contribution under this project has been below average as it has ranged between 34%-47% over the three years (Table 22). For instance, the government contribution towards its obligation was 46% in 2005/06, 47% in 2006/07 and 34% in 2007/08. It should be noted that in 2006/07, the government contribution increased by only 1% and reduced drastically by 13% in FY 2007/08 which was only 1% if compared to 2005/06 (source: Revenue and Expenditure Estimates FY 2008/09). This inappropriate contribution from the government has partially been associated with the failures in the project implementation arrangement.

Table 22: Government contribution to the total estimated budget under NLPIP National livestock production improvement project 2005/06 2006/07 2007/08 mill. Budgeted in Project Appraisal Document 9.8331 7.8068 6.1697 ADF US$ (projected at effectiveness) Approved for release by MinFin Funds actually released to MAAIF 14.298 Funds utilized, including 2005/06 2006/07 2007/08 62 Economic Policy Research Centre (EPRC)

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GoU mill. Shs Approve for release by MinFin 1,809 1,694 1,474 Funds actually released to MAAIF 838 800 500 Funds utilized 502 421 407 Rate of actual to approved release, % 46% 47% 34% Rate of utilization to actual release, % 60% 53% 81% Rate of utilization to approved release, % 28% 25% 28% Source: Project Office Monitoring and Evaluation Reports ii) Technical efficiency and value for money 1.201. Several districts have already witnessed the presence of the project in delivering on the above mentioned components. For instance, table 4.4 below shows the distribution of goats where Mbarara District received 455, Bushenyi received 400 and Kiruhura received 700. On this particular distribution of goats records at the beneficiary districts indicate that the numbers delivered tallies with that at MAAIF.

Table 4.4 shows the distribution of goats in the selected districts in Uganda District No. received District No. received 1. Ibanda(formerly part of Mbarara) 400 10. Luweero 320 2. Isingiro(formerly part of Mbarara) 400 11. Lyantonde (formerly part of Rakai) 400 3. Kamuli 198 12. Masindi 400 4. Kamwenge 805 13. Mbarara 455 5. Kayunga 259 14. Mpigi 1523 6. Kibaale 400 15. Mubende 719 7. Kiboga 622 16. Nakasongola 296 8. Kiruhura (formerly part of Mbarara) 700 17. Ntungamo 690 9. Kyenjojo 569 18. Sembabule 1062 10. Nakaseke 617 19. Mityana 725 11. Bushenyi 400 22.Rakai 875 TOTAL 12835 Source: National Livestock Project Progress Report January-March 2008

1.202. However, the quality of the goats supplied all in the beneficiary districts was very poor e.g. in Nyakayojo sub-county in Mbarara, out of the 16 goats given out to the farmers 6 goats died accounting for 37.5% of the total goats supplied in the parish as indicated in the Table 23. Attributions to poor quality of goats is the main of focus of this analysis, Kiruhura district which received 700 goats under the same project attracted resistance from the beneficiaries as the quality was very low compared to the local breeds in the community. This situation applies to the cattle supplied to beneficiary districts for example in Soroti the animals were of poor quality, quite smaller and most of them were reported to have had CBBP which killed more than half of the total number supplied. This situation was made worse when the animals were supplied during the dry season with no facilitation to keep them at the holding ground as per the guidelines and this has been attributed to lack of involvement of the district staff. In Pallisa, the cattle were bought from the local markets within the district and the quality was very poor unlike those which were supplied under the prime minister’s office some years back which were easily accepted by the beneficiaries.

Table 23: Rukindo parish restocking (goats) under NLPIP in Nyakayojo sub-county, Mbarara district Farmer group Received Alive Dead Nyakakoni Tukwatanise 4 2 2 Kagando small animals 4 3 1 Nyakakoni Zebra 4 2 2

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Bwenkoma matooke growers 4 3 1 Total 16 10 6 Source: Nyakayojo Sub-County Monitoring Report, 2007/08

1.203. Similarly, it is highly uneconomic to supply animals without proper control of diseases because this may lead to wastage of resources. The table 4.6 below indicates that 7.01% of the animals supplied died while the abortion cases accounted for 1.65% and this is attributed to the failure of providing the necessary support to the veterinary department. Similarly, under the same project, MAAIF experienced the expiry of vaccines to a total of 392,000 doses for brucellosis as an indication of poor coordination.

1.204. Furthermore, field findings reveal discrepancies in the number of cattle distributed among the beneficiary districts. For example the quarterly records at the project office indicated that 15,049 animals were procured and distributed to the districts but further scrutiny of the statistics provided reveals that only 14,239 animals were distributed indicating a wide discrepancy of 810 animals accounting for 5.4% of the total number presumed to have been distributed. This situation explains cases of inconsistency and poor documentation in the records management at the ministry project management units (source: cumulative report 2007/08). Table 24: Performance of cattle so far distributed under NLPIP Characteristic Number percentage Deaths of adult animals 998 7.01 Births 6,079 42.69 Abortions 235 1.65 Male calves 3,127 21.96 Female calves 2,912 20.45 Pass on 888 6.24 Total number of animals distributed 14,239 100.00 Reported number of animals distributed 15,049 Source: MAAIF, National Livestock Project

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1.205. Similarly, there is no coordination between the districts and MAAIF and there is lack of ownership of the project. Most of the items procured by MAAIF are delivered without any programme or plan to how and when the materials should be utilised. A case in point is the delivery of barbed wires, U-nails, and some poles that were distributed to the districts in the cattle corridor like Kiruhura, Soroti and Pallisa without information on the quantity expected from the project. Similar incidences of inefficiency were reported in the coordination and management of project activities for example the district project committee has been made inactive as it does not get information for them to plan and prepare for the subsequent activities. Although facilitation costs are reflected in budget at MAAIF, funds are irregularly provided to the districts and this has crowded out activities that require district local funding as funds are now utilised on the unpredicted NLPIP activities. For example, Kiruhura, Soroti received some funds although with no clear release mechanism while other districts like Pallisa and Bushenyi have failed to access the funding. 1.206. At the district level, there is a need for better poverty targeting. Results vary from district to district, but the situation is worse in eastern were the politicians are identifying the beneficiaries and this practice has featured in Soroti district. As a result of such situations, animals distributed under the restocking component are largely not reaching those who could have been the rightful beneficiaries. This situation is also attributed to lack of proper coordination as well as limited support from the project management unit as the implementation of activities under this project has been heavily criticised by the beneficiary districts. iii) Benefit incidence 1.207. The interesting findings to note are the allocation of resources and services by income group. In several districts, there is variability of distribution of animals across the various farmer groups. From the community score card results in Mbarara, Kiruhura and Bushenyi, about 68% of the farmers indicated that they were benefiting from NLPIP activities and either NAADS or any other programme. It is important to note that NLPIP activities have overlaps in the rural areas. This leaves out the poor ones who might have attained the knowledge on the management of enterprises but have not been supported to due to lack of the necessary requirements in place to host the enterprise. For example in Bushenyi and Kiruhura districts, the project has benefited already those that have been supported under NAADS as the facilitation is not provided to adequately identify and prepare the beneficiary farmers. 1.208. The distribution of the animals across the district is extremely inefficient and focuses on already the successful farmers. Farmers who benefit from NAADS also end up benefiting from NLPIP which implies that there is limited focus on individuals who are very poor. This has not only reduced the incentive for the communities to respond to the project activities but a sign of duplication of programmes. iv) Cost effectiveness

1.209. Surprisingly, the cost effectiveness has not been achieved under NLPIP as most of the items supplied under this project are highly priced more specifically the livestock. The findings from the quarterly reports at the project office indicate that unit cost of procuring a Boer goat by MAAIF was Shs. 892,000 which was much higher compared to Shs. 250,000 at the district level procurement (source: quarterly report 2005). Although the Boer goats are imported from outside countries, their quality is not

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Uganda Public Expenditure Review Phase 3 significantly different from those ones kept at stock farms as well as those reared by some farmers in Western Uganda. Similarly, a local goat was centrally procured at Shs. 70,000 as compared to Shs. 50,000 at the local government level. The unit costs even when compared to other programmes like NAADS, PMA, LGDP and NUSAF in the northern region which provide similar interventions in the sector is quite high. According to the quarterly report for April-June 2007/08, a total of Shs.916,090,000 was centrally spent on the procurement of 13,087 local goats which is much higher by Shs.261,740,000 if it was procured at the district level. This is a clear indication that procurement at the ministry for the items that can be obtained in the beneficiary areas or domestically is not cost effective as Shs.4,830,000,000 is to be spent on the procurement of only 69,000 local goats as compared to 96,600 local if procured at the local level. It was also noted that suppliers domestically procure these items from the beneficiary districts at lower prices and invoice the ministry with very high prices and this has shown inefficiencies in the procurement process. 1.210. Furthermore, several types of vaccines were provided to the beneficiary districts both on a cost recovery arrangement and free as well e.g. Newcastle vaccine was cost free while brucellosis and lumpy skin vaccine was on a cost recovery. The prices of the vaccines on cost recovery are higher than the market prices e.g. lumpy skin dose was supplied at shs1300 yet the market price is shs1200 while brucellosis was Sh.1000 and market price is Shs 800. As a result, the response towards the vaccination programme more especially the cost recovery was very low if at all any. In this financing modality, it was repressive and therefore it skewed in favour of the rich because the poor farmers felt the prices could have been much lower and this resulted into high expiry of the vaccines. For example in Kiruhura, Mbarara and Bushenyi, the brucellosis vaccine estimated at 320,000 doses that was meant to be supplied on cost recovery was almost not demanded and as it was nearing expiration, the authorities at MAAIF decided to vaccinate animals for free. v) Impact of the project

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1.211. The impact of the project has not been great as most of the infrastructures have not yet been completed or provided in the districts visited. The less impact is also attributed to lack of ownership as district staff are not fully involved in the planning and management of the project activities. The inadequate and irregular release of funds to districts has also been cited as one of the major setbacks under this project and activities are only implemented as funds are provided but with no or limited supervision and monitoring. Similarly, other components like restocking have also not created any impact as most beneficiaries attribute this outcome to low quality of the animals and cases of overlaps are common. On the overall, the main hindrance to the achievement of impressive results is greatly attributed to the weak coordination and information asymmetry especially among the technical staff. Concluding remarks

1.212. One of the major issues affecting the performance of the project is lack of proper coordination between MAAIF and the technical officers at the districts. Examples have been cited e.g. Kiruhura district the contractor delivered goats without the knowledge of the district officers and district authorities were notified in time as they were called when the supplier was in Lyantonde. This arrangement does not provide time enough to prepare the beneficiaries as well as the goat shelters. 1.213. Secondly, procurement is done centrally without the involvement of local governments or the beneficiaries and this has result in poor quality of goods and services supplied especially the livestock component. The situation has been made worse when the goats supplied at inflated prices were reported to be of low quality hence no value for money. This was reported in the sampled districts of Kiruhura, Mbarara, Pallisa as well as Soroti which received cattle. 1.214. Lastly, there is also limited facilitation in most districts. The local governments’ facilitation is quite insufficient and irregular and this has lowered the ownership of the project. This practice has crowded out vital activities for the local governments and should be addressed urgently as most of the funds being spent may be put at waste. 1.215. On overall, this project has contributed to the controlling and managing animal epidemic diseases and pests affecting animal production although weak, improved incomes through provision of goats, cattle, and standards have improved through provision of slaughter sheds. There have attempts to proper use and management of natural resources through promotion of land management systems. There has also been a contribution to the training and capacity building in the fields of vector and vermin control. However, coordination and supervision has remained a challenge. Similarly, policies, plans, legislations, standards and programmes need to be strengthened. This project should have achieved much if there was proper coordination with local governments therefore more guidance should be provided through the Sector Working Group.

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Pan African Control of Epizootics (PACE) Introduction

1.216. The PACE was a European Union (EU) funded project that handled mainly disease surveillance, diagnosis and disease control. It operated mainly in the cattle corridor especially south-west Uganda in the districts of Kiruhura and Bushenyi but was not in the West Nile area. PACE did not also operate in the sub counties that bordered the national parks e.g. Ryeru Sub County. Over the years, surveillance has been carried especially in rinder pest to ascertain whether rinder pest still exists or not. Main findings

1.217. Under this project, vaccines provided to districts in the cattle corridor were tracked but with limited focus on funds as there was no major financial transfers. The analysis also focussed on the efficiency and cost effectiveness as some vaccines were provided to farmers on a cost recovery arrangement. The impact was not assessed as this project focussed on surveillance and thus only outbreaks of major cattle diseases were reported and therefore an intervention sought. i) Cost effectiveness 1.218. The project was not carrying out disease control and its recurrent budget was not large enough. This was mainly used for the purchase of vaccines. These included: foot and mouth, CBPP, rabies and rinder pest. PACE was expanded to include the administration of vaccines. During the last 3 years the project purchased a lot of vaccines mainly foot and mouth. However, due to inadequate refrigeration facilities the usage of the vaccines was low. Some of the vaccines were free while others were on cost recovery. The ones that were free include: FMD, rabies and Newcastle. The ones on cost recovery include lumpy skin disease, brucellosis and CBPP. The lumpy skin was charged at Ushs 1,300 per dose, brucellosis at Ushs 1,000 per dose while CBPP was charged at Ushs 300 per dose. This was too costly to some farmers as the price charged was higher than the local market price but corresponding to the prices under NLPIP. ii) Efficiency 1.219. Like as earlier mentioned on the capacity and support to animal health department, its capacity to detect diseases is quite limited and it can only detect 1/6 of the OIE diseases. This is because of not only being under staffed but there is low capacity of the laboratory at Entebbe. The Ministry carries out its sample tests in outside countries and it takes an average of 3-4 months to receive the results which is a long time if the disease is very dangerous. The Civil Aviation Authority (CAA) is even threatening to take the land around this laboratory. There is need to construct an up-to-date disease diagnostic and a chemical laboratory which has been estimated at $10 million. iii) Releases of vaccines to districts 1.220. The vaccine releases under both PACE and NLPIP over the financial years 2005/06- 2007/08 to the districts of Bushenyi, Soroti, Mbarara, Budaka and Soroti. From table 4.1 below, it is clear that leakage of resources occurred and information inconsistency makes the analysis quite complicated. However, over the period the ministry indicates to have released for instance 43,000 doses of FMD vaccines to Bushenyi district, but only 32,900 doses were recorded. Likewise, 103,000 doses of NDC

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Uganda Public Expenditure Review Phase 3 were released to the same district but only received 53,000 doses were reported to have been received. This scenario also applies to other vaccines like Brucellosis, lumpy skin and CBPP in all the recipient of the deliverables. It is important to note that high leakages were recorded in the areas with high density of cattle like Kiruhura district were 130,000 doses of CBPP is reported to have been supplied to the district but no entries made in the stores of the recipient local government. Surprisingly, while the department is receiving less funding compared to others, it is one of those departments/units recording the highest resource leakage in MAAIF.

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Table 5.1 shows the release of vaccines to districts in the cattle corridor under PACE

Type of vaccine Quantity of vaccine issued (doses)

Bushenyi Kiruhura Mbarara Budaka Soroti Ministry District Ministry District Ministry District Ministry District Ministry District

Rabies 7,500 11,500 20,500 11,000 1,000 Foot and Mouth 43,100 32,900 321,000 9,500 Disease (FMD) New Castle Disease 103,000 53,000 55,000 5,000 0 (NDC) 50,000 50,000 20,000 28,821 Lumpy Skin Disease 9,100 11,000 24,000 25,000 700 (LSD) 3,931 CBPP 100 130,000 1,510 5,000 Brucella S 19 60,600 30,500 43,500 20,000 25,000 1,420 4,000 1,598 Total 223,400 138,900 594,000 50,000 25,000 24,130 50,000 56,000 24,000 34,350

Source: MAAIF and Districts Office

1.221. In general, farmers do not like to vaccinate their animals unless there is a major outbreak of a disease. They are more reluctant since they have to pay for the cost of administration of the vaccines which is a higher cost compared to the market price of the vaccines. This according to the respondents in Kiruhura and Bushenyi led to low utilization of lumpy skin vaccine. Similarly, there still exist poor communication between the district and the Ministry and this has led to the failure to utilise fridges and cold chains as most of them are non-functional. 1.222. The district veterinary officers put animal check points along known routes to deter illegal movement of animals. Those who move the animals should have movement permits and trading licences. The use of check points provides better control of diseases even more than vaccination but in most cases this has been failed by other partners in the control of animal movements. A case in point is the recent outbreak of foot and mouth disease in Sembabule which was a result of the law enforcement officers to work against the advice of the technical officers at the ministry. 1.223. During outbreak of diseases the district veterinary officers are forced to declare quarantines but in most cases this has been let down by other neighbouring districts which opt not to enforce. This in most instances has led to outbreaks in other districts. According to the local government staff who are directly involved in the management of these out breaks proposed that this service should be centralized to enable all affected areas comply with the measures put in place. Concluding remarks

1.224. The provision of veterinary diagnostic services has been provided in the various districts but should be strengthened since it has a strong ‘public good’ justification and should be centrally financed. Even when the private sector plays a role in the provision of routine diagnostic, government should still supervise private diagnostic of notifiable diseases as listed in the control and diseases of Animal Act should solely be funded and done by the government. Government should also fund demand driven research in animal production and health and this should also consider the research institutions that already exist. On the overall, weak coordination among the districts and limited financing under vote function of animal resources has crippled the good intentions of controlling and managing animal epidemic diseases and pests that have affected animal 70 Economic Policy Research Centre (EPRC)

Uganda Public Expenditure Review Phase 3 production. The enforcement of policies and regulations is still weak and this has been coupled by infrequent supervision and guidance.

Farming in Tsetse Controlled Areas (FITCA) Introduction

1.225. This project falls under Animal Resources with the vote function mandated to contribute to improved incomes and quality of life, food security, employment and agro- processing. These activities of this project are in line with mandate of other projects like NLPIP but with different interventions. This is European Union and Government of Uganda (EU/GoU) funded project which operated in the districts of Mukono, Kamuli, Jinja, Iganga, Mayuge, Kayunga, Busia, Soroti, Bugiri, Budaka, Tororo and Manafa. It was a community development project which aimed at improving the community welfare by using an integrated approach of opening up land and rare the zero grazing animals in tsetse fly infested areas. The interventions also involved spraying animals, animal traction (use of oxen) and pasture development. Thus the major objective of the project was to encourage community control tsetse fly in the infested areas through the numerous interventions. Under this section, the analysis therefore focuses on tracking of funds with the aim of determining value for money, benefit incidence, efficiency and effectiveness. This section also concludes with the extent to which the project has delivered on the objectives of MAAIF and its mandate.

Project implementation arrangement

1.226. This project is coordinated at the ministry with a designated project coordinator supported by an accountant and other support staff. At the district level, heads of veterinary departments were designated as coordinators with the support of the local political leadership. Most of the inputs and items under this project are centrally procured and they include: Tsetse traps, Veterinary drugs, Drugs for treatment of sleeping sickness, Oxen, and Traction equipment. There is some procurement at the district level, particularly the purchase of traction animals and zero grazing, and tsetse fly nets. In each district, two people were tasked with the responsibility of executing the zero grazing work. Similarly, NGOs were contracted to participate in the implementation because of their extensive experience in the management of community work. Main findings

i) Tracking of funds and inputs 1.227. This project transferred funds to beneficiary districts and indications show that there was leakage of funds over three years under the study. The field findings reveal that in the year 2006 Shs.81,260,241 was released to but records at the coordination office only show Shs. 2,940,000 as to have been receipted . Similarly, Shs.55,813,091 is assumed to have been released to Pallisa district in the same year but information obtained indicates that Shs.2,777,000 was receipted. These variations in the funds receipted at the beneficiary districts were also noticed in the subsequent years of the project implementation (Table 25). Further discussions with project officials confirmed

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the findings but indicated that no direct release was made to the districts over the period in reference. The funds were expended on behalf of the districts in the provision of goods and services which was irregular and does not build capacity at the local levels and kills the principle of participatory approach to management of projects. The funds released to the districts only facilitated the officers in control of the project and this meant that the guiding principles of implementation were not followed.

Table 25: Financial releases of funds and inputs to selected districts in Eastern region FARMING IN TSETSE CONTROLLED AREAS (FITCA) PMU ENTEBBE Funds transferred Inputs

Heif.er M/ Computer 2006 2007 2008 2009 TOTAL s 4WD cycles s. Insect Traps S/Mac

Tororo 81,260,241 33,400,000 16,740,000 131,400,241 31 4 4 1 15 5,000 3

Soroti 57,917,341 31,028,000 18,043,180 106,988,521 1 4 1 15 5,000 3 Pallisa 55,813,091 38,993,000 17,843,000 112,649,091 31 4 1 15 2,500 3 District Inputs Tororo 2,940,000 2,016,000 571,000 5,527,000 36 1 4 1 Soroti 1 2 NIL 3 Pallisa 2,777,000 4,752,000 1,111,000 7,529,000 31 1 1 1,500 3 Source: Project office and districts 1.228. Table 25 further shows that the inputs released to districts in some instances differ in number for example Pallisa district is believed to have received four motorcycles but only one was officially received and acknowledged. Similarly, two motorcycles were received in Soroti against four motorcycles as per the allocation and release while one computer is believed to have been released but was not received. However, the coordinator indicated that inputs were duly acknowledged and more especially they were procured in the first phase but no evidence was provided. 1.229. The tracking of government contribution was also undertaken and over three years as shown in the Table 26, it ranged between 84%-93%. For example the government contribution was 90% in FY 2005/06, 84% in 2006/07 and 93% in 2007/08. This contribution was less than the estimated budget although the performance under much better compared to other projects.

Table 26: Government contributed to the total estimated budget 2005/06 2006/07 2007/08 EU, million Shs

Budgeted in PAD 1,620 1,443 779

Funds actually released to MAAIF 1,944 1,688 732

Funds utilized 1,328 1,532 713 GoU, million Shs

Funds approved 1,700 160 550

Funds actually released to MAAIF 1,533 134 512

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Funds utilized 1,239 134 464 Rate of actual to approved release, % 90% 84% 93%

Exchange rate, Shs/Euro 2,250.0 2,219.9 2,359.9 Source: Project Office

ii) Efficiency 1.230. There is evidence that several activities were carried out in Pallisa, Budaka and Tororo districts as selected areas where the team visited. The field findings reveal that 31 heifers were supplied to Pallisa district while Tororo received 36 more than officially recorded and under this zero grazing sub-component, a host farmer was supposed to pass on a calf to other group members. However, some farmers failed to provide supplementary feeding and maintenance and this caused death of animals. For example in Pallisa out of the 31 heifers supplied, 6 died in the first month, while in Budaka where the original mother stock was 35 heifers, 10 died and this was attributed also to limited involvement of the beneficiary districts, negligence by the farmers and lack of adequate facilitation in terms of fuel, operation and maintenance costs. It is worth to note that operation and maintenance costs were not balanced as limited funds were released to districts. 1.231. There was also inefficiency in the provision of artificial insemination services (AIS) and in most areas the reports indicated that the services were poor and inadequate. Similarly, the services were also costly which forced some of the beneficiaries to sell the animals. This inefficiency in the provision of AIS contributed to resource wastage as most of the animals were sold at prices much lower than the original cost price. This situation was reported to be high among those farmers who hardly had any milk to sell and yet the drugs were quite expensive. Although the breeding bulls were introduced in the project districts except Bugiri, this temporary measure did not improve the situation either. 1.232. The coordination and selection of the beneficiaries was inefficient in that some farmers did not have capacity to provide supplementary feeding to the heifers as required. Similarly, in most of the animals supplied Nagana was rampant and this imposed an early cost on the farmers. 1.233. The coverage area of the project in most of the districts was limited to 2-3 sub- counties in each. This was quite a small area to realize benefits from the public goods of that nature. Although the tsetse flies were suppressed at least to 80 percent at the initial stage, the number continued to increase over time and this was evidenced by the number of new cases registered at the health units more specifically the women. The monitoring reports in Tororo district for instance indicated that out of every 5 individuals affected, 3 were female and this was attributed to the fact that they spend most of the time clearing land where they could plant crops. This reduced the incentive of the farmers to manage such animals with almost no change in the intensity of the flies. iii) Value for money and benefit incidence

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1.234. Although the FITCA project strengthened the diagnostic centre in Pallisa district where people could go for medical check-ups, facilitation of the medical staff was inadequate and this affected their performance. Similarly, even the community workers who were trained in making the tsetse fly traps were not adequately facilitated and currently there is no work at all for them. It was established from the coordinators that sustainability was not adequately planned and thus the districts could not sustain the provision of the services as its nature requires a lot of funds. Similarly, there was no proper planning and coordination with ministry of health as it is alleged that it was meant to meet the facilitation of health workers. This reduced the morale among the health workers and this meant that the good intentions of the project were lost on the way as regards the provision of services from the centre. 1.235. Notwithstanding the challenges, 10 spray crushes were established in 7 sub- counties of Pallisa district for example. The spray drugs were provided at the initial stages where farmers were supposed to pay only Shs.200 per animal but this was received with mixed reactions as the willingness to pay was low. However, when drugs got finished, the programme ended because farmers could not afford to buy the drugs as well as the willingness to pay was now nonexistent. Like other inefficiencies in the project, the farmers decided to sell off the animals as they had become a burden and even the little money collected through the spraying activities were mismanaged. 1.236. However, Pallisa district procured 10 oxen and the unit cost was Shs 300,000 which is within open market prices. Similarly, the spray drugs were provided at only Shs.200 which was less than the privately provided services. The beneficiaries’ average land holding is 2.5 acres and their education level attainment was primary education with more participation of male than female farmers. A closer look at the field findings reveal that both literate and illiterate are actively participating in the project activities. This project did not attract the participation of youth and other disadvantaged groups like the disabled. The selection of the beneficiary sub-county was based on the poverty levels because for example Lyama sub-county in Pallisa district is the poorest in terms income levels, illiteracy and latrine coverage among others. v) Impact of the project

1.237. This project created a positive impact at the initial stages as farmers were able to manage animals in the tsetse fly infested areas and there was a reduction in the density of the flies. However, the inadequate facilitation under the second phase reduced the impact as field visits reduced drastically which affected the level of contact between the subject matter specialist and beneficiaries. Similarly, the less allocation of funds to the subsector from the local revenue failed the sustainable use of the sewing machines as the local communities trained could neither continuously receive materials to prepare the traps nor be facilitated. vi) Constraints on the project 1.238. The following constraints were observed during the implementation of the Project:

• The disbursement of funds was slow. There was always delay between audit and the actual disbursement.

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• There was slow adoption of technologies by the local population. Poverty among the local population contributed to slow adoption of new technologies. Concluding remarks

1.239. This project contributed to the control of vector, and capacity building in local governments. Similarly, support supervision has been provided in the areas of livestock and entomology. Nonetheless, there is ample evidence that service delivery in most parts of the project area faced challenges and efficiency in the expenditure was equally low. This was due to insufficient resource availability for expenditures on operations and maintenance. The selected beneficiary areas were quite small which could not effectively impact positively on the density of the tsetse flies. Lastly, no sufficient work was done to adequately identify the beneficiaries which created inefficiency in the implementation of the project.

Area based Agricultural Modernization Project (AAMP) Introduction

1.240. The AAMP was officially started in July 2002 and operates in the districts of the South West part of Uganda. These are the districts of the so-called greater Mbarara District (Mbarara, Isingiro, Kiruhura and Ibanda), Kanungu, Rukungiri, Ntungamo, Kabale, Kisoro, Kabarole, Kyenjojo, Sembabule, Bushenyi, Kasese and Bundibugyo.

Objectives

1.241. The overall objective of the project was to increase incomes of small holders in the Programme area through increased production and marketing of crops and livestock. More specifically, the project was designed to achieve the following objectives:

• Increase involvement of the Private Sector in support of the Commercialisation of Smallholder Agriculture; • Ensure sustainable development and improvement of rural infrastructure; • Improve capacity among economically active farmers to access Rural Financial Services; • Increase public sector capacity to perform its role in responding to production needs identified by interest groups and rural communities. Implementation Arrangements

1.242. The AAMP is coordinated by MoLG in line with other line ministries and it has a field office in Mbarara which coordinates field activities on daily basis. The coordination ministry communicates the indicative planning figures to the district which forms the basis for the formulation of work plans in the various four components of the project. Work plans are developed from the sub counties and forwarded to the districts where they are consolidated before being forwarded to the Ministry of local government. 75 Economic Policy Research Centre (EPRC)

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The International Fund for Agricultural Development (IFAD) releases 80% of the total budget and district and sub-counties each contribute 10% for the rural infrastructure component. Similarly, on the agricultural component district and sub-county each contributes 5% while 75% of the funds are provided as revolving fund and the district contributes 25%. The formulation of work plans is based on the indicative planning figures which are communicated by MoLG. Main findings

i) Financial releases and utilisation 1.243. This project focussed on four main components and activities that were coordinated in Mbarara and some funds were released to the districts. Under this project the tracking of funds was not done but the focus was more on benefit incidence, value for money, efficiency and cost effectiveness. Table 27 shows that the highest percentage of 36.9% was released for Agricultural Commercialisation fund, 17% for Community Mobilisation, 24.7% for Programme Facilitation and 21.4% for Rural Infrastructure. It can be noted from the above table that the allocation to infrastructure was inappropriate too low during the inception of the project and this situation creates limitations on sustainability arrangement. Similarly, the programme facilitation was inappropriately high accounting for 3.3% higher compared to rural infrastructure. One issue to note is that the value for money in some of infrastructures was not achieved e.g. Nyakashura market stalls. This market stalls were costed at Shs. 105 million and the quality of the works was quite low and substandard. Thus the cost effectiveness of the expenditure was not achieved.

Table 27: Allocations of funds across different sub-components under AAMP

FINANCIAL RELEASES - AAMP Component 2005/06 %ge 2006/07 %ge 2007/08 %ge Total %ge Agricultural 1 Commercialisation Fund 62,978,046 39.61 22,746,750 29.67 40,505,250 38.00 126,230,046 36.88 2 Community Mobilisation 44,273,000 27.84 13,835,500 18.05 0.00 58,108,500 16.98 3 Rural Infrastructure 9,749,000 6.13 29,587,500 38.59 34,033,500 31.93 73,370,000 21.44 4 Programme Facilitation 42,000,000 26.42 10,500,000 13.70 32,065,500 30.08 84,565,500 24.71 Total 159,000,046 100.00 76,669,750 100.00 106,604,250 100.00 342,274,046 100.00 Source: AAMP Office Mbarara

Source: Mbarara District, AAMP Documentation

ii) Benefit incidence and cost effectiveness 1.244. Besides the provision of rural infrastructure, households have also been supported by the project. For instance, a total number of 397 groups with membership of 2,439 males and 4,211 females belonging to 5,973 households have been trained in the management of different enterprises. The majority of the groups are rearing goats, pigs, and involved in growing Irish potatoes as well as keeping apiary3. However, the cost effectiveness was not achieved under some of the selected enterprises as the costs were much higher compared to other programmes in the same district and sub-counties. For

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Uganda Public Expenditure Review Phase 3 instance a local goat was supplied at Shs. 100,000 which higher than Shs.50, 000-70,000 under NAADS while a piglet was procured at Shs. 60,000. There is need to provide specific guidelines on the items to be procured as this will address the variation of prices in programmes that support agriculture. Although under this project there was provision of goats, piglets, apiary among others, goats and piglets died because of the tsetse flies in the Ryeru sub-county in Bushenyi district. This sub-county is close to the queen Elizabeth national park which is a breeding place for the tsetse flies. 1.245. Furthermore, agricultural commercialization was promoted and the main focus was on the opening of new SACCOS and their registration with Registrar of Cooperative Societies, provision of safes, counters and other furniture. It also included the training of SACCO members in the preparation of Business Plans and use of Logical Framework methodology. 1.246. The financial service as a component was integrated in the project in order to boost financial services of the farming community; most especially the more disadvantaged group as far as lending is concerned. The AAMP participating farmers were mobilized to become members of SACCOs and spear head the drive which is still ongoing. However, there are substantial inequities in the distribution of benefits from financial services. The financial services through SACCOs disproportionately benefited the non-poor households and specifically male than female. Furthermore, according to the project completion report 2008, around 40% of the household of the poor quintile did not obtain loans. Moreover, very few households actually complete servicing the loans largely because they do not have stable income. However, in all the districts of Mbarara, Isingiro, Kiruhura and Ibanda, loan recovery on average among female is 69.2% while 57% for male. Similarly, on average amount given out to each female was equivalent to Sh.118, 449 which is much small as compared to Sh.187, 565 given to male. 1.247. Access to roads was heavily skewed in favour of the rich households. The poor tend to live in remote areas with limited roads and/ or means of transportation, which constrains their access to markets and trading centres, and limits their economic opportunities. Rural communities on average are located 25km from the tarmac road, and this distance is higher at about 40km on average in the hilly areas. There has not been a poverty focus in the road sector expenditure. More funds went on rehabilitation and construction of new roads compared to maintenance of community access roads and yet the selection of roads was based on the South West Agricultural Rehabilitation Project which operated in the region between 1990 and1995. There was no new field assessment and this contributed to poor design of the bridges and gravelling thickness was not achieved particularly roads in Kiyanga and Buhwezu sub-counties. There are several infrastructures provided under AAMP in the greater Mbarara district and Bushenyi district (Table 28). 1.248. Table 28 further shows that the unit costs for the improvement of the roads under AAMP ranged from about Shs.8,000,000 to 20,000,000 per km which is within the estimated cost of rehabilitation of roads. However, the difference is due to the fact that some of the roads are in hilly terrains which attracted extra works on the roads. Surprsingly, these unit costs are much less than those under NWADP which ranges between Shs. 30,000,000- 38,000,000 and yet the terrain is not hilly.

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Table 28: Infrastructure provision under AAMP in selected dsitricts

LIST OF RURAL INFRASTRUCTURE IMPLEMENTED UNDER AAMP IN GREATER MBARARA(2005/06- 2007/08)

Contract Sum (VAT Infrastructure Activity District Excl.), Ushs Len(Km) Unit Cost Markets Construction of Koranorya Market Mbarara 33,463,100 Construction of Nyamitanga Market Mbarara 58,123,000 Construction of Nyamitanga Market (Phase II) Mbarara 11,419,200 Construction of Kyeibuza Market Kiruhura 41,950,120 Construction of Sanga Market (Phase II) Kiruhura 46,245,650 Improvement of Bunenero-Kaguhanzya Roads Mbarara 56,837,235 Access Road 7 8,119,605 Rubaya-Akasunsano Community Access Mbarara 82,098,450 Road 8 10,262,306 Improvement of Rwenkuba- Nyakabungo-Nyamarebe Community Access Road Ibanda 65,916,375 Improvement of Kabugwene-Kabingo- Rushango Community Access Road Ibanda 41,424,075

Bihaarwe-Kikatsi-Keshunga Mbarara 32 12,623,253 Rutokye-Kiyanga-Bitereko Bushenyi 20 Kashenyi-Karembe-Bihanga Bushenyi 1,078,801,190 16 19,794,519 Itendero-Kanyeganyegye Bushenyi 18.5 Biharwe-Bwizibwera Mbarara 25 Not started, contractor Ndeija-Nyindo-Nyaihanga Mbarara 7 mobilising to start

Bihairwe-Kikatsi-Nyakashara Mbarara 19 Rwakitura-Kijuma-rwemikoma Kiruhura 27 Construction of Produce Store at Other Infrast. Ishongoro Construction of Low Head Drip Irrigation Facilities at Biharwe, Kakigani and Ndeija Mbarara 40,037,060 Construction of Diffused Light Stores in Kabuyanda Sub County Isingiro 14,000,000 Construction of Maize Cribsin Nyakitunda sub County Isingiro 12,000,000 Source: AAMP Field Office Mbarara

iii) Allocative efficiency 1.249. This project allocated funds to four main components and they were integrated with an objective of enabling farmers minimise cost and maximise benefits. Basing on Figure 2, the analysis reveals that trend in allocation of funds across the components was inappropriately too high at the inception of the project. Total expenditure to the rural infrastructure increased steadily from 6.13% in 2005/06 to 31.93 % in 2007/08 although much lower than expenditure in programme facilitation and this reduced the economic benefits of public expenditure (also see details in annex v).

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Figure 2: AAMP expenditure by main components over the years (2002-2008)

1.250. Whereas allocation to rural infrastructure increased as evidenced in the expenditure trends, the share devoted to community access roads was lower than for rehabilitation and this limit the rural poor to access the markets. This situation is attributed to independent assessment of the appropriate infrastructure required by the local communities with limited consideration of other facilities like markets. Furthermore, funds spent on rural infrastructure have been inadequate to meet the maintenance needs of the network, and to clear the sizeable backlog of maintenance. The allocation of funds to community mobilisation is inappropriately very high. Although attempts were made to allocate funds to the rural infrastructure, a considerable number of local contractors exhibited poor performance and this needs improvement, through capacity building, training and access to financial resources for equipment purchase or hire. iii) Impact of the project

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1.251. There are indications that the project created an impact in the western region as accessibility to rural areas was to a certain extent eased and use of improved varieties like seeds and animals was widely spread. The roads contributed to the increased number of farmers being reached and this has led to improved incomes through the selling of matooke and animal products. However, the biggest challenge is on the maintenance of roads and other market facilities which seems has not yet received adequate attention. Concluding remarks

1.252. This project was structured under four main components and the results generally are good but there is need to provide adequate guidelines on some items to be procured. There is also need to balance the expenditures in order to achieve allocative efficiency.

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Farm Income Enhancement and Forest Conservation Project (FIEFCOP) Introduction

1.253. This project falls under crop resources and is under 2 ministries: the MAAIF and the Ministry of Water and Environment (MoWE). Its components are spread into these two ministries. The Project comprises of 3 major components i.e. Forestry support, Agricultural Enterprise Development and the National Project Coordination Unit. This is an ADB/GoU project worth UA 51.15 million with the Agricultural Enterprise Development worth UA 22.014 million. This Project was expected to have started in January 2005 but it effectively started in February 2006. The Project has thus far received two (2) disbursements: 1st disbursement on 25th July 2006 and 2nd disbursement on 2nd July 2007. The last disbursement is expected on 31st December 2010 and the project is expected to end in December, 2010. Under the vote function of crop resources, this project is expected to contribute to the enhancement of agricultural production and productivity, in a sustainable and environmental safe manner, for improved food and nutrition security, employment, widened export base and improved incomes of the farmers. Project Objectives

1.254. The overall project objective is the reduction of poverty through the improvement of incomes, rural livelihoods and food security among households. It aims to achieve this through sustainable natural resources management and agricultural enterprise development. Sub-components of Agricultural Enterprise Development

1.255. The Agricultural Enterprise Development has the following sub-components: (i) Soil Fertility Management; (ii) Small-scale irrigation and Crop Development; (iii) Apiculture Support; (iv) Agricultural Marketing; and (v) Gender Mainstreaming as a cross cutting intervention. Project Areas

1.256. Originally the project was expected to cover 37 districts but because of the creation of new districts, the coverage extended to 55 districts. These included some of the districts that the team visited i.e. Mbarara, Bushenyi, Arua, Adjumani, Nebbi, Kiruhura, Maracha-Terego, Pallisa, Tororo, Mbale and Soroti. These districts were selected based on certain key criteria that included among others: high population densities and declining farm sizes; areas that have land overgrazing and bush burning; areas that are drought prone; districts that are traditional and potential apiculture areas; districts with ample natural water resources for small scale irrigation development and with woody biomass deficiencies. In each district only three sub-counties are considered and bottom up planning and budgeting has been adopted. Implementation arrangement

1.257. This project has a national coordinator based at the ministry headquarters and is supported by both the staff in the two ministries. MAAIF has 13 while Ministry of

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Water, Forestry and Environment has 7 staff of them attached to the project. The districts are required to designate on officer in the production department to coordinate the activities at the local government level although CAO is the overall accounting officer. Funds are released on a quarterly basis to the special accounts in the districts and there is an accounts assistant in charge of the management of funds. Most of the big items in the project are centrally procured because it was argued out that it is time saving as well as MAAIF can benefit from the funds at the Ministry of Finance to clear taxes which incentive may not easily be accessed by local governments. This may be true for the imported items but it is less meaningful to procure centrally for even the domestically produced items or goods. Project implementation status

The Project Office highlighted the following activities to have been done nationally and at the district level. • Conducting Training of Trainers workshops on Agricultural Marketing, • Conducting Training of Trainers workshops on beekeeping, • Conducting Training of Trainers workshops on maintenance and repair of treadle and motorized pumps, • Conducting Training of Trainers workshops on Soil Fertility Management and water conservation practices, • Procurement of furniture, motorcycles bicycles and vehicles, soil testing kits and survey equipment and some motor cycles have been distributed to the beneficiary districts. • Disbursement of funds to districts that have opened project accounts have received each twenty five million shillings The UShs.25 million that has been released to the districts by the project is for the following start-up activities: • Mobilization and awareness creation at district, Sub County levels, and selection of sites where interventions will take place, • Identification of farmer groups that will participate in project activities, Selection of enterprises that will be undertaken, • Establishment of demonstration sites at parish levels on: small scale irrigation, apiary management, conservation agriculture, farm planning, soil fertility management, horticultural nurseries and fruit tree mother gardens, • Purchase of inputs: seeds, fertilizers, pesticides, spades, hoes, pangas, wheelbarrows, treadle pumps etc, • Establishment of soil conservation structures in some farmer’s fields to reduce soil degradation. Main Findings

1.258. In this section we discuss the Flow of funds and the extent to which public resources are being efficiently utilized as regards financing activities especially with

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Uganda Public Expenditure Review Phase 3 reference to this project. Thereafter, we present and discuss some of the emerging efficiency issues based on the field findings. i) Tracking of funds 1.259. This project released Shs.848m to 34 districts in different regions and official records indicated that Shs.25m was disbursed to each district for start up activities. The tracking of these funds in the selected districts of Arua, Mbarara, Pallisa, Tororo and Nebbi reveals that there is no leakage of funds so far released (Table 29).

Table 29: Funds released to selected districts under FIEFCO project, 2007/08 Amount District (Shs) Notes PMU Financial Transfers to Districts, Ushs Arua 25,000,000 The funds were released for start up Mbarara 25,000,000 activities that included: training, Bushenyi 25,000,000 identification of project sites and group formation. Pallisa 25,000,000 Tororo 25,000,000 Nebbi 25,000,000 Received at the district Arua 25,000,000 Mbarara 25,000,000 Bushenyi 25,000,000 Pallisa 25,000,000 Tororo 25,000,000 Nebbi 25,000,000 Source: Project and district coordination offices

1.260. This project has a government contribution component and over the two financial years, its contribution was more than 100%. For instance, during 2006/07, the government contributed 152% while in 2007/08 it was 154% which is 2% more than the previous year. This is so far the only project that has received over 100% government contribution but this is also a result of budgeting for only Shs.142m which is a much less amount compared to other projects.

Table 30: Government contribution to the FIEFCO estimated budget 1. ADF million US$ 2006/07 2007/08 PROCUREMENT Budgeted (PAD) 3.297 5.65 Vehicles US$ 238,941 Released to MAAIF 1.823 Motorcycles JPY 27,437,748 Utilized by MAAIF 458 573 Office UgShs.25,434,900 Furniture (Include Transfer to Districts) Nil 848 Bicycles Ug. Shs.38,88,032 2. GOU Million Shs Budgeted (PAD) 142 142 Released to MAAIF 216 219 Utilized by MAAIF 216 200 (Reduce Transfers to Districts) Nil Nil Rate of actual to approved 152% 154%

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release, % 4. Exchange Rate Shs/US$ 1,700 Source: Project office reports ii) Efficiency in project management 1.261. One of the emerging issues is the failure to designate signatories of account more specifically in line with LGA 1997. Three people were required to be signatories on the special account which included CAO, District Agricultural Officer, and District Forestry Officer without the Chief Finance Officer (CFO). This arrangement was not acceptable to the district arrangement since CFO is the advisor on financial matters. This led to delays in opening district project accounts and it has greatly affected the implementation of project activities. 1.262. Secondly, the Project has two components: one that is based in MAAIF and the other in the Ministry of Water, Forestry and Environment Protection and each ministry has got its project coordinator. This has made coordination of activities between the ministries and local governments quite hard.

iii) Efficiency in training expenditures

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1.263. Although FIEFCO was seen as a new project that has not done much, its activities are in preliminary stages but more specifically in the training of the stakeholders about the project implementation arrangement and its benefits. In the districts visited, it was found that the disbursement of funds was not timely and in most cases this was done at the closure of financial year. Thus the activities could not be implemented in time as the release of funds was untimely and yet most of the training activities required the participation of almost similar people who are controllers of other programmes. Concluding remarks

1.264. The programme is participatory in nature with specific activities and investments being determined through the community process as have been evidenced by the inception project activities. In this case a sense of ownership of enterprises and facilities is promoted among local communities. However, it should be strengthened in those areas highlighted to effectively and efficiently deliver the benefits to the poorer communities. 1.265. Similarly, better coordination among key players in service delivery seems to be critical to the improvement of services extended to the farmers. More effective community participation calls for compelling communities/ farmers to play the roles they are required to, particularly, in financing the maintenance of the enterprise. This could be achieved through local government enforcement of principles for supporting the famers. 1.266. On the overall, famers and technical staff have been sensitized and trained in many aspects of the project which is one way of developing capacity at the local level. However, follow up on the use of funds is weak and overlaps should be minimized to realize so as to cover as many poor farmers as possible.

National Agricultural Advisory Services (NAADS) Introduction

1.267. The NAADS is a programme under MAAIF which aims at attaining effectiveness and efficiency in agricultural extension services. It is one of the pillars of the Plan for Modernization of Agriculture. The NAADS programme was set up by the law through an Act of Parliament of 2001. The programme was launched in 2001/02 and is to be implemented in phases although it was reviewed by cabinet with the aim of increasing its impact on the rural poor as well as addressing farmers who are engaged in large scale farming. 1.268. The Mission of NAADS is to increase farmer access to information, knowledge and technology through effective, efficient, sustainable and extension coverage with increasing private sector involvement for profitable agriculture production.

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1.269. NAADS started operating in 6 districts namely: Arua, Kabale, Kibaale, Mukono, Soroti and Tororo. To date, the programme has been extended to all districts and sub counties in Uganda. Objectives

• Promote food security, nutrition and household incomes, through increased productivity and market oriented farming • Empower all farmers to access and utilize contracted agricultural advisory services • Promote farmer groups to develop capacity to manage farming enterprises • Create options for financing and delivery of agricultural advice for different types of farmers, but with emphasis on subsistence farmers, particularly women, youth and people with disabilities • Gradually shift from public delivery to private delivery of agricultural advice • Develop private sector agricultural advisory delivery capacity and systems and assure quality of advice • Catalyse the participation of the private sector to fund agricultural advisory services. The design of NAADS is composed of seven components which are implemented at the local government level and they are as follows: • Orientation and Education, • Farmer Institutional Development, • Advisory Services, • Technology Development and Promotion, • Monitoring and Evaluation • Agro Business and Market Linkages • Semi-annual and Annual reviews.

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Implementation arrangement

1.270. The implementation of the programme is coordinated by the secretariat at the national level. District coordinators are appointed to coordinate the activities at the local government with support from the sub-county coordinators. At each sub-county, there is farmer group which supports the sub-county authorities in the day to day implementation. The funds are channelled through the Ministry of Finance, Planning and Economic Development and funds allocation is in such a way that the NAADS secretariat and district level receive not more than 12% each and the sub-counties get a share of over 75%. 1.271. Implementation of NAADS is done at local government level and there is a NAADS coordinator at the district and in every sub-county. The sub-county coordinator works in conjunction with the farmers’ forum and the parish committees. Funds are received on a quarterly basis and further released are based on satisfactory submission of a quarterly progress report and quarterly budget request. 1.272. The funding arrangement of NAADS is as follows: co-operating partners (80%), government of Uganda (8%), local government (10%) and farmers (2%). However there is a challenge in that local governments and the farmer groups are frequently unable to meet their co-funding obligations.

Main findings

i) Tracking of funds 1.273. Like Local Government Development Programme (LGDP), NAADS has a clear flow of funds from the centre (Ministry of Finance, Planning and Economic Development) to local governments. It spells out the breakdown of funds per component and per each participating lower local government which is the same as LGDP. This approach should be adopted by MAAIF as it simplifies the planning, budgeting and implementation of project activities. It also promotes the principle of ownership of projects and strengthens decentralization principles at the local government levels. Table 31 shows that there is no leakage of funds over the FY 2005/06-2006/07 under NAADS as the records availed to the team only reflects a slightly higher figure at the district level than the PMU.

Table 31: Funds released to selected districts under NAADS program 2005/06 2006/07 TOTAL PMU Financial Transfers to Districts, Ushs Arua 1,246,000,000 1,092,000,000 2,338,000,000 Mbarara 427,000,000 622,000,000 1,049,000,000 Bushenyi 891,000,000 1,277,000,000 2,168,000,000 Pallisa 224,000,000 224,000,000 Received at district level Arua 1,307,831,688 1,092,256,250 2,400,087,938 Mbarara 667,598,000 621,499,999 1,289,097,999

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Bushenyi 823,598,980 1,283,789,999 2,107,388,979 Pallisa 224,100,000 224,100,000 Source: PMU and district NAADS office

ii) Efficiency and effectiveness 1.274. Farmers receive advisory services from service providers and they are free to select the enterprises of their interest. These vary from place to place and group to group and may include: Banana, maize, goat, apiary, coffee, tea, mangoes among others. After the selection of the enterprise, technology demonstration sites are developed where the host farmer is chosen by the group. All group members are expected to manage the enterprise and learn from it. However most host farmers want to personalize the enterprises which has slowed down the adoption rate of new technologies. 1.275. The allocative efficiency in NAADS is generally fair, except in certain instances where co-funding is not met by the sub counties and the farmers. In addition, the local governments and beneficiaries were expected to play a role in co-financing the programme. However, contributions by beneficiaries/ farmers and local governments have varied from 10 to 100%. This variation has been attributed to several factors particularly unpredictability of revenues from local sources due to interferences from political leaders and policy reviews. There is thus no penalty made to any sub county or farmer groups that do not meet their co-funding obligations. This has contributed to the failures of some of the planned activities. Moreover, the implementation of NAADS has other shortcomings in that the farmers make selection of their enterprises without proper guidance from the subject specialists. Similarly, the criteria used to identify the three priority enterprises for a sub-county is narrow and imposes enterprises of not their choice to farmers. This leads to failure in technical efficiency that ultimately fails the allocative efficiency. Similarly, the gender gap in acquiring knowledge on new technologies is closing but gender parity has not been attained in hosting some of the enterprises e.g. cattle, coffee etc. This is because women have limited rights on land ownership and lack assets.

1.276. Table 32 presents an example of Kyamuhunga sub-county budgets for FY2004/05 and FY2005/2006. In each of these years the sub-county has been receiving on average 95% of the total budget estimates and the most challenge is the failure by both the sub-county and farmers to meet their co-funding obligations. The main funding items of the recurrent budget expenditure include the following: allowances, committee expenses, printing and stationary, fuel and lubricants and professional fees. Supply of goods and services got the biggest share of 51.09% and 64.95% in 2004/05 and 2005/06 financial years respectively which looks healthy. Although operation and maintenance cost was maintained low at only 0.30%, in 2005/06, professional fees accounted for 25.68% which is inappropriately high and this reduces the economic benefits of public expenditure. Activities carried out involve educating people about NAADS and this is done at sub county level. Farmers are later encouraged to form groups as the programme focuses on well established groups with demonstration sites where all farmers can acquire knowledge.

1.277. Farmers receive advisory services from service providers and they are free to select the enterprises of their interest. These vary from place to place and group to group and may include: Banana, maize, goat, apiary, coffee, tea, mangoes among others. After

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Uganda Public Expenditure Review Phase 3 the selection of the enterprise, technology demonstration sites are developed where the host farmer is chosen by the group. All group members are expected to manage the enterprise and learn from it. However most host farmers want to personalize the enterprises which has slowed down the adoption rate of new technologies. 1.278. The allocative efficiency in NAADS is generally fair, except in certain instances where co-funding is not met by the sub counties and the farmers. In addition, the local governments and beneficiaries were expected to play a role in co-financing the programme. However, contributions by beneficiaries/ farmers and local governments have varied from 10 to 100%. This variation has been attributed to several factors particularly unpredictability of revenues from local sources due to interferences from political leaders and policy reviews. There is thus no penalty made to any sub county or farmer groups that do not meet their co-funding obligations. This has contributed to the failures of some of the planned activities. Moreover, the implementation of NAADS has other shortcomings in that the farmers make selection of their enterprises without proper guidance from the subject specialists. Similarly, the criteria used to identify the three priority enterprises for a sub-county is narrow and imposes enterprises of not their choice to farmers. This leads to failure in technical efficiency that ultimately fails the allocative efficiency. Similarly, the gender gap in acquiring knowledge on new technologies is closing but gender parity has not been attained in hosting some of the enterprises e.g. cattle, coffee etc. This is because women have limited rights on land ownership and lack assets.

Table 32: Kyamuhunga sub-county detailed budget estimates and expenditure 2004/05 2005/2006 Description Budget Actual %ge Budget Actual %ge Opening Balance S/C 978,802 10,802,438 RECEIPTS/ADVANCES Transfers from the District 42,110,000 41,432,000 95.13 85,109,000 85,107,000 94.85 Sub County Contribution 2,260,000 1,600,000 3.67 4,576,000 2,390,584 2.66 Farmers Contribution 910,000 520,000 1.19 1,830,000 2,233,500 2.49 Sub Total 45,280,000 43,552,000 100.00 91,515,000 89,731,084 100.00 Funds Available 46,258,802 44,530,802 102,317,438 100,533,522 EXPENDITURE Allowances 2,890,000 4,032,000 15.09 3,983,030 3,660,700 4.03 Committee Expenses 180,000 84,200 0.32 177,000 487,000 0.54 Computer Supplies 15,000 0.00 0.00 Printing, Stationery & Photocopying 750,000 681,600 2.55 737,000 700,250 0.77 Fuel, Lubricants and Oils 1,790,000 1,100,840 4.12 4,022,053 3,117,550 3.43 General Supply of Goods & Services 212,250,000 13,655,313 51.09 62,232,596 59,020,211 64.95 Professional Services 17,805,000 6,688,691 25.03 30,580,759 23,337,324 25.68 Insurance 95,000 9,000 0.03 0.00 Communication 3,000,000 284,600 1.06 300,000 278,000 0.31 Vehicle Maintenance & Operations 200,000 190,100 0.71 285,000 269,900 0.30 Maintenance (others) 0.00 0.00 Total Expenditure 238,975,000 26,726,344 100.00 102,317,438 90,870,935 100.00 Source: Kyamuhunga Sub County

1.279. Besides the poor enterprise selection with limited guidance from the extension staff, farmers do not receive extension services on the non funded activities carried out on their farms. Evidence from the field visit indicates that farmers only receive extension

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Uganda Public Expenditure Review Phase 3 services on the enterprises that are supported by NAADS and yet famers engage in numerous agricultural activities. This has affected the performance of those enterprises that are outside the NAADS support and it has reduced the motivation among the famers that have not benefitted from the programme. Besides, farmers also choose enterprises that lead to low production levels which have contributed to wastage of resources.

iv) Value for money 1.280. Under technology development and promotion seeds and breeds of improved variety are issued to farm groups. Other inputs supplied are pumps, goat shades, fertilizers and vaccines. However, most of the items procured are of low quality and has been partly attributed to the decisions made by the farmers’ forum as well as failure to utilize recognised suppliers through the contracts committee. Similarly, the management of enterprises is becoming a problem especially goats as farmers now do not allow the enterprise to be hosted by the selected farmer. This is attributed to the long time one has to wait until he/she benefits from the hosted enterprise. This has led not only to high death rates but also they have been eaten and this was one serious issue in Kyamuhunga sub-county in Igara County in Bushenyi district. 1.281. The NAADS system wastes a large amount of resources which could be used to finance acceptable locally selected enterprises. For example high expenditure on technology promotion recorded over time across districts has not necessarily been translated into high adoption rates. The combination of unfavourable enterprise selection criteria, lack of ownership and low education levels explains the low adoption rates. In particular, while the number of technology promotion sites have increased and within access of the farmers, adoption rates are still very low which has been attributed to stringent guidelines. 1.282. Table 33 shows how the expenditure is distributed in the sub county of Nyakayojo, Mbarara District. As can be seen the highest expenditure is in Technology Promotion (19.43% in 2006/07 and 46.29% in 2007/08) i.e. goats, bananas, dairy cows followed by advisory services (48.70% in 2006/2007 and 25.51% in 2007/08) that involves training which indicates high efficiency in the allocation. 1.283. The programme has been successful in the area of introducing improved varieties of seeds and animal breeds in some areas like Mbarara and Bushenyi unlike in other areas like Moyo and Adjumani where there is low adoption of new technologies. The results from the use of community score card indicate that low adoption rates are due to a combination of the high input costs for agriculture (62%) and prohibitive conditions to access loans (72%). Low adoption rate is also due to the low perceived benefits from agriculture since there is lack of sufficient markets and poor accessibility to the few existing ones. In addition, there is a challenge, in that there is a high monetary expectation by farmers.

Table 33: Nyakayojo sub-county budget estimates and expenditure 2006/2007 2007/2008 Component Budget Actual %ge Budget Actual %ge 1 Group Mobilisation & Development 2,790,000 2,846,000 7.31 2,976,000 1,993,000 5.44 2 Subcounty Operating Costs 5,430,752 3,413,000 8.76 5,053,525 2,491,000 6.80 3 Technology Promotion, ISFG 10,440,000 7,566,000 19.43 63,424,000 16,953,000 46.29

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4 Community Based Facilitation 1,860,000 1,896,000 4.87 1,860,000 1,246,000 3.40 5 Sub county Advisory Services 23,270,000 18,966,000 48.70 18,667,000 9,344,000 25.51 6 Agribusiness & marketing linkages 2,063,726 1,798,000 4.62 3,906,000 2,617,000 7.15 7 Monitoring and Evaluation 1,860,000 1,610,000 4.13 2,139,000 1,433,000 3.91 8 Semi and Annual Reviews 1,682,441 848,000 2.18 1,953,000 547,000 1.49 Total 49,396,919 38,943,000 100.00 99,978,525 36,624,000 100.00 Source: Nyakayojo Sub County v). Benefit incidence 1.284. There is a high participation by women in farmer group activities e.g. farmer group training, on average 60% participate. However, there is low participation by the youth coming to a level of 10%. The youth do not have much interest in agricultural activities preferring trade that has quick returns. The number of youth joining NAADS could increase when agro-processing activities are started. The women on the other hand are encumbered by the fact that they do not own land and this is reflected in the choice of the enterprise. While the youth have chances of benefiting from the programme, there are limited chances for the disabled and the poorer individuals to actively participate in the NAADS activities. According to the monitoring reports, the impact of NAADS is great on the subsistence farmers who own on average between 2-5 acres of land than commercial agriculture framers. The Table 34 shows that female participation is high compared to male individuals and goat as an enterprise is highly selected compared to coffee which is a crop undertaken by the male. Using the community score card and enterprise ownership registers, indicate that choice of an enterprise is partially determined by the asset ownership e.g. land etc which is highly owned by the male individuals.

Table 34: NAADS support to farmers in Kazo sub-county in Kiruhura district Name of farmer group Enterprise Composition of the group by Total gender. Male Female Kyantumo Tukore group Coffee 23 3 26 Kyantumo Tumanyane group Goat rearing & 9 5 14 management Byeshembe farmers group Rearing of cows 10 5 15 Tweyambe group Goat keeping 4 32 36 Ibaare bakyara Tutors Goat keeping 10 15 25 Tukundane group Goat keeping 8 7 15 Source: Kazo Sub-County 1.285. Furthermore, the community score card results indicate that farmers have been assisted through NAADS services (87%) and more people feel the services have contributed to their food security. Generally, smallholder farmers have been exposed to training sessions on new technologies (90%); and the food security status in their homes has improved. This is adequate justification to maintain and increase funding levels to NAADS. 1.286. It is worth mentioning the question of equity in the allocation of resources and services, by location or between income groups and land holding. In several districts, variability of NAADS spending across and within districts was observed. The considerable difference in resource allocation noted in several districts raises serious issues of equity among socio-economic and demographic groups. This study found out that NAADS funding had progressive characteristics that led to greater benefits for the poorer and rural based than the Peri-Urban. These findings, namely those poor farmers

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Uganda Public Expenditure Review Phase 3 receive more services but were regressive towards the people with disabilities, the youth and high income earners. In short, NAADS could be described as having breadth but lacking depth. Despite the apparent acceleration in coverage, field findings indicate that the quality of some enterprises does not measure up and resource allocation is not efficiently targeted. There is a need for better analytical work by the subject matter specialists to inform the subsequent choices of enterprises by the beneficiaries and ensure that resources are targeted where they will generate the most value. 1.287. Although cattle are said to be the most important type of livestock in districts of Mbarara, Bushenyi, and Kiruhura, goats have been widely kept with 40% of rural households keeping an average of 5-9 goats. Farmers’ reports indicate the use of animal manure in about 35% of the cropped area. Indigenous chickens are now kept by about 60% of households; most keep less than 25 birds. The ultimate objective of the farmers is to pay school fees and purchase of basic home items. 1.288. Most of the coordinators of NAADS revealed that the achievements so far registered are much less than the total funds expended at districts and sub-counties. And this has been attributed to inefficiencies in the programme more particularly in the guidelines of enterprise selection, weak farmers’ groups, management of enterprises by the beneficiaries and failure to involve community development officers in the implementation. Similar emerging expenditure picture, which is worth noting is the disparity between increased resource allocation to NAADS activities and output and outcomes (Table 35). The input-output disparity has been attributed to the programme’s tendency to allocate a large proportion of additional resources to advisory services activities more than technology promotion at the sub-county level, which has not necessarily translated into increased adoption level of technologies. The analysis of the figures in the table below reveals that during financial year 2005/06, the expenditures on technology promotion was 18.24% more than advisory services, 4.43% in 2006/07 but 2007/08 advisory services was placed in a priority position with an expenditure allocation of 1.84% more than technology promotion. This scenario of change in the allocations has not impressed the farmers as they claim that capacity has already been built at the local level. 1.289. Furthermore, the weak capacity and lack of knowledge in the subject matter by the previous private sector providers of advisory services was a recurring theme across most districts. In many instances, the private sector providers engaged to train farmers were technically incompetent and failed to comply with the guidelines, specifications resulting in substandard outputs. Most of the providers were primary seven graduates but with formal organizations registered to carry out capacity building in different areas. 1.290. The other challenge to NAADS has been not only low levels of formation and functionality of SACCOs but also prohibitive conditions attached to the loans. This has hindered the starting of individual enterprises by farmers especially where they expect to obtain loans. Farmers also claim that SACCOs set conditions which fail them to access loans and this has affected the adoption rate of the new and improved technologies introduced to them.

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1.291. 1.292. 1.293.

1.294. Table 36 suggests that unit costs of the deliverables under NAADS in relation to other projects in the districts vary greatly. The field reports reveal that a local goat supplied in the same sub-county and district attracted varying prices for example under NLPIP a local goat costs Shs.70,000 while Shs.100,000 under NAADS. Similarly, prices for hoes, slashers, Mubende goat also varied under NAADS and NWADP. However, these unit costs are much lower than those offered by MAAIF and vary across projects. It is evident from the above comparative unit cost analysis that cost effectiveness is still elusive in some of the items that are procured in the various beneficiary local governments. There is need to assess and determine the comparative advantage in the supply of the various agriculture items in order to achieve the cost effectiveness.

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Table 35: Expenditure trends on ISFG and sub-county advisory services KYAMUHUNGA S/C 2005/06 2006/07 2007/08 Tr. Tr. Actual %ge Tr. %ge Actual %ge %ge Actual %ge %ge Sub-County Operating Costs 1,305,900 1.49 4,657,260 5.51 4,335,400 7.97 Technology Promotion, ISFG 45.03 42.99 48,259,030 55.22 38,090,716 23,383,201 Community Based Facilitation 572,000 0.65 3,002,080 3.55 2,268,000 4.17 Sub-county Advisory Services 21,888,865 25.05 36.98 26,255,838 31.04 40.60 14,474,000 26.61 44.83 Agro-Business & Market Linkages 0 0.00 0 0.00 3,131,200 5.76 Monitoring & Evaluation 3,834,250 4.39 5,000,012 5.91 1,608,600 2.96 Semi & Annual Reviews 1,675,100 1.92 2,500,000 2.96 678,200 1.25 Farmer Institutional Development 9,858,040 11.28 5,081,550 6.01 4,510,000 8.29 Total 87,393,185 100.00 84,587,456 100.00 54,388,601 100.00 Source: Kyamuhunga sub-county final accounts

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Table 36: Comparative unit costs across the projects/programs (Ushs)

PROJECT PROGRAM NLPIP NAADS NSADP AAMP FITCA VODP ITEM L G B C M H Piglet 40,000 75,000 50,000 Adult Pig 250,000 Groundnuts/kg 5,000 4,500 Rice Seeds/kg 2,500 1,600 Maize 1,200 1,500 Sunflower Seeds/kg 1,000 Cassava cuttings/sack 12,000 20,000 Beehives 60,000 50,000 Road Rehabilitation/Km 38,000,000 12,000,000 Road Maintenance/Km 60,000 Hoe 4,000 Slasher 5,500 2,500 Source: Respective Project Offices

vi) Impact of the program 1.295. The programme has created an impact on the rural communities especially where the enterprises have been fully owned. The participatory approach to planning, management has proved to be successful and it should be strengthened in order to overcome short comings like low adoption of technologies etc. However, it is important to note that the programme has had high female participation and goat as enterprise has been highly selected /chosen. The production enhancement component has been more successful especially in the introduction of improved varieties.

Concluding remarks 1.296. The programme is participatory and iterative local approach in its design, beneficiary demand driven in its need assessment, promote pluralism in its delivery, decentralized and result/ incentive in its implementation and finally in coherence with the Government policy. The programme which is demand driven, participatory in nature with specific activities and investments being determined through the community process has brought about a sense of ownership of enterprises and facilities. This is a programme where MAAIF has moved to the achievement of its mandate and similar programmes should emulate the practice and the weaknesses can be addressed subsequently. However, it should be strengthened in those areas highlighted to effectively and efficiently deliver the benefits to the poorer communities.

1.297. Similarly, increased funding, efficiency in delivery of agricultural services, better coordination among key players, and more community participation in service delivery seem to be critical to the improvement of services extended to the farmers. More 95 Economic Policy Research Centre (EPRC)

Uganda Public Expenditure Review Phase 3 effective community participation calls for compelling communities/ farmers to play the roles they are required to, particularly, in financing the maintenance of the enterprise. This could be achieved through local government enforcement of principles for supporting the famers.

1.298. The Central Government will also need to compel NGOs and other development partners to align their interventions with government programmes and involve subject matter specialists with a view to maximising synergies arising from the numerous interventions. The government should further improve on the incentives for private participation in the delivery of agricultural inputs and also strengthen the network of the service providers to minimise the crowd out effects. From fieldwork, we established that inefficiency also arises partly from understaffing, lack of facilitation, low pay etc. In addition to these, abuse of office such as corruption which is initiated by contractors explains inefficiency and in some instances low value for money.

1.299. On the overall, NAADS has contributed greatly to the achievement of the output as indicated in the DSIP and these include: demand driven technologies, knowledge and information are now demanded, farmers are now applying improved husbandry and management practices, decentralized, farmer-driven, private sector – serviced agricultural advisory services are provided to farmers and value addition .

Agricultural and Marketing Support Project Introduction

1.300. The Agriculture and Marketing Support Project is supported by World Food Programme (WFP). World Food Programme provides food assistance for relief and recovery for displaced people and vulnerable groups. The participating districts include Bundibugyo, Gulu, Kitgum, Pader, Arua, Yumbe, Adjumani and Moyo. These districts were chosen due to the fact that they were affected by insurgency. The overall objective is to improve the incomes and food security status of smallholder famers. Project Components

1.301. There are basically two major components under this project namely market support and food for assets. Broadly, under the market support, the component aims at helping the small scale farmers to market their produce. It achieves this through the following interventions:

• Provision of market information. This involves the collection and dissemination of market information to small scale farmers. • Promotion and formation of farmers groups. • Upgrading marketing infrastructure and rehabilitation or opening of community feeder roads. • The construction of community stores using food for assets.

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• Training in post harvest management. This is done using food for assets. The small scale farmers are trained in agronomical skills and bulking techniques so as to ensure quality moisture content. • WFP provides maize hurlers. • Local procurement of farmer’s produce. WFP procures 10 percent of its total procurement from small scale farmers. Performance bonds are eased during the procurement process. Farmers are encouraged to bulk their produce up to 50 metric tonnes. • WFP works with other organizations in the provision of market support. The organizations include NAADS, IDEA and Sasakawa Global 2002.

1.302. The second component which is Food for Assets component uses food incentives as a means to facilitate the creation or rehabilitation of community social, economic and human assets so as to promote food security and self reliance among the poor and the food insecure. Food is exchanged for work on specified community projects or food is exchanged for training among the poor. The FFA is targeted in the development of projects in agro forestry, apiary, training and creation/rehabilitation of community stores.

Implementation arrangements

The implementation arrangements are based on the following: • The country programme is based on an MOU between the GoU and WFP. • WFP signs an MOU with the respective sector ministries, in this case the Ministry of Agriculture, Animal Industry and Fisheries. • WFP signs MOUs with participating districts with the technical staff at the districts acting as subject specialists e.g. Fisheries officers, District Engineers etc Main findings

1.303. Under this project it was difficult to track the total funds utilized because no funds were released to MAAIF. However, the team was able to track the government contribution to the total budget and it varied from 22%-38% which was quite less than a half of the total estimated budget (Table 37). The failure for the government to meet its obligation has affected the implementation of the planned activities and also affected the allocation to the department.

Table 37: Government contribution to the project approved budget Agricultural Marketing Support WFP 2004/05 2005/06 2006/07 2007/08 WFP, US$ mill Budget planned 1.826 2.739 Budget released 2.000 0.9634 GoU, Shs mill Budget approved 131.5 245 199.6 200

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Budget released 28.8 92.9 198.6 175

Rate of actual to approved release, % 22% 38% 99.5 87.5 Source: MAAIF coordination office 1.304. It is evident that during financial year 2004/05, only 22% was received as the government contribution which was very low and this affected negatively the implementation plans. Similarly, in 2005/06, only 38% was receipted from the government and this was only 16% more than the previous financial year but less than was estimated. However, the government willingness to meet its obligation increases as less funding is received from other partners and this is evidenced in the subsequent financial years (Table 37). 1.305. Evidence from the selected local governments indicates that WFP has exhibited low efficiency in the implementation of this project. In areas where NGOs and other International Organizations operate, they seem to have complemented efforts by the government and community/ farmers in delivery of services. However, the interventions by the development partners are invariably not well coordinated with government interventions which work against maximization of synergies of government and interventions. Poor coordination of activities between NGOs and government has meant duplication of efforts and concentration of activities in similar locations within the same beneficiaries, thus rendering the interventions less focused on geographical areas with the highest need. 1.306. Also the poor agricultural outcomes under WFP and other NGOs have been largely associated to inefficiency in the use of financial resources. There is limited involvement of subject matter specialist at the district and consultation among the key players has been elusive. This situation was recorded in Arua, Adjumani and other districts with similar NGOs where a lot of resources have been invested in many enterprises that have not been well evaluated. 1.307. There is not enough quantity of maize available among the farmers. Much of it is being sold to Kenya from the Kapchorwa area. Due to the high demand for maize in the region farmers prefer to sell it to neighbouring countries than to WFP avoiding the stringent quality control requirements of WFP. This enables them to get quick money to meet day to day needs. 1.308. Similarly, according to monitoring reports in Arua as one of the beneficiary districts, post harvest management is poor under this project and this has led to an average of 20% lose of the produce for the farmers. Since WFP gets money through pledges it sometimes fails to meet its procurement targets due to the non fulfilment of pledges. Government of Uganda is supposed to provide funds for the MAAIF staff to participate in monitoring and evaluation activities and sometimes these funds are not available. However, it was established from the ministry that WFP pledges large sums of funds and this has led to the displacement of other funds from the budget.

Concluding remarks

1.309. The map of the programme is not clear as most of the activities are executed with minimal participation from the district subject matter specialists. Duplication of resource allocation as some sub-programmes appears in more than one programme, yet

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Uganda Public Expenditure Review Phase 3 the functions are the same for the sub-programmes. These duplications imply that resources are being spread too thinly to the same activities there by removing any cost effectiveness since activities and implementing personnel are the same. However, the government should try to meet its obligations as this practice curtails the technical officers from achieving the intended objectives. The programmes with off-budget operations like WFP should be limited as this weakens the coordination at MAAIF and resources are utilized in the production of crops in a sustainable manner so as to ensure improved quality and quantity. This will enable MAAIF achieve its mandate on strengthening production of products for domestic consumption, food security and export

Non-sectoral Conditional Grant Introduction

1.310. The Non-Sectoral Conditional Grant (NSCG) is a programme implemented in Uganda. It is based on the Plan for Modernization Agriculture Framework (PMA). In recognition of the multi-sectoral nature of the factors impeding the attainment of this transformation, Government formulated a comprehensive Plan for Modernisation of Agriculture (PMA) that is aligned with the PEAP goal. The PMA specifically addresses the factors that undermine agricultural productivity, namely: poor access to credit; poor transport, communication and marketing; insecure land tenure and user rights. The NAADS, a key, component of the PMA, has been designed to focus on increasing farmers ‘access to improved knowledge, technologies and information. Therefore PMA was designed to achieve the following specific objectives. Project Objectives

1.311. The overall objectives of PMA are to increase incomes and improve the quality of life of poor subsistence farmers, improve household food security, provide gainful employment and promote the sustainable use and management of natural resources. Broadly, this programme focuses on poverty eradication with interventions in the following seven priority areas:

• Agricultural research and technology development; • Agricultural advisory services; • Rural Financial Services; • Agricultural Education; • Agricultural marketing and agro-processing; • Sustainable natural resources management; and • Supportive physical infrastructure.

1.312. The first two pillars fall directly under MAAIF with the first being operationalized by National Agricultural Research System (NARS) and the second being implemented by the National Agricultural Advisory Services (NAADS).

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Districts of Operation

1.313. The NSCG is implemented in various districts and among them include: Apac, Arua, Kitgum, Kotido, Moroto, Nakapiripirit, Nebbi, Pader, Yumbe, Kaabong, Abim, Maracha-Terego, and Oyam. However, we focus on our selected districts of Bushenyi, Arua, Nebbi, Yumbe and Maracha-Terego. Main activities implemented at the district level 1.314. The NSCG funds are used to provide inputs for the farmers in the following areas: Technology demonstrations and seed multiplication e.g. seeds of cereals, legumes, cassava planting materials; Apiary: beehives and honey harvesting gears; Aquaculture: excavation of fish ponds and stocking; Inputs for goats and poultry; Disease control inputs; Rural Infrastructure: culverts, opening community roads, protection of wells, construction of cattle crushes, improvement of landing sites, construction of community stores for bulking produce; Training of farmers: formation of SACCOS, marketing knowledge and skills; Enforcement of regulations. 1.315. The NSCG focuses on interventions through multi-sectional interventions to improve the livelihoods in a sustainable manner. The main target beneficiaries of the NSCG interventions are the subsistence farmers who constitute the majority of the poor in rural areas. Implementation Arrangement

1.316. In the context of decentralization process, implementation of NSCG activities falls under the overall responsibility of the district councils. The line ministries established the necessary coordination and linkages with the districts that in turn coordinate and link with the sub-counties, NGOs/CBOs and farmers. Sub-county local councils implement NSCG activities amongst the communities and their activities are coordinated by the districts. At sub-county level, farmers and farmer groups/organisations, CBOs, NGOs, and the private sector are integrated in all planning and implementation arrangements. At district level there is a person under the production department designated as NSCG coordinator. The funds are released from Ministry of Finance and Economic Planning to the district where 35% is retained at district level and 65% is transferred to sub-counties as in accordance to the Finance and Accounting Regulations. NSCG mainly focuses on the subsistence farmers in a bid to achieve its goal of poverty eradication. Major Findings

i) Tracking of funds 1.317. The NSCG funds are released from the MOFPED to various district accounts and the utilization is multi-sectoral basing on the specific priority needs of an area. Table 38 shows that there is no leakage of funds in Tororo as the higher figures at the district level could be a result of balances brought forward or poor records keeping. However, leakage of funds could have occurred in the Bushenyi district as the figures receipted over the years are much lower than those provided to the team from the secretariat. For instance in FY 2005/06, Shs.183,784,000 was claimed to have been released to Bushenyi district but only Shs.79,000,000 was receipted. In 2006/07, Shs.199,909,000 was released but only Shs.66,000,000 was receipted while in 2007/08 Shs.512,522,997 was released

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Uganda Public Expenditure Review Phase 3 and only Shs.252,000,000 was receipted and the team’s opinion on the variations was that leakage of funds occurred.

Table 38: Funds released to selected districts under NSCG, 2005/06-2007/08

2005/06 2006/07 2007/08 TOTAL PMU Financial Transfers to Districts, Ushs Arua 221,293,000 134,059,000 127,771,451 483,123,451 Bushenyi 183,784,000 199,909,000 128,829,997 512,522,997 Pallisa 84,904,441 84,904,441 Tororo 144,054,000 138,664,670 107,583,155 390,301,825 RECEIVED AT DISTRICT LEVEL Arua Bushenyi 79,000,000 66,000,000 107,000,000 252,000,000 Pallisa Tororo 144,053,959 141,985,388 115,150,269 401,189,616 Source: Project Office and Districts

1.318. Table 38 further shows that transfers to Tororo district during FY2005/06 was Shs.144, 054,000 which is slightly higher by only Shs.41 compared to the amount receipted at the district level. Similarly, a transfer to the same district over the FY 2006/07 was Shs.138, 664,670 which is slightly less than what was receipted at the district level. 1.319. On the utilization of funds for example in Bushenyi, which is one of the beneficiary district for instance, on receipt of the NSCG funds, the district committee sits and distributes the funds accordingly to different departments. The benefiting departments are; production, works, health, planning and finance, community based services, education and natural resources. 1.320. It is important to note that some of the activities carried out under NSCG are supplements on the other activities that are undertaken by the various programmes and thus the focus of NSCG’s intervention is in the following areas:

• Procuring inputs for farmers like seeds, goats, poultry, vaccines, excavation of fish ponds, stocking and harvesting of fish • Rural infrastructure like construction of markets, access roads, simple culverts along rivers, protection of wells and drinking water etc • Training farmers through extension workers in different enterprises like apiary, goat, pig and vanilla management • Monitoring of the projects and programmes that are being implemented under production sector. • Mobilization of farmers to form SACCOS

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1.321. In Bushenyi 80% of the total NSCG funds is channelled into investments, 10% goes to monitoring and 10% is for investment service cost. However, there is a challenge of inadequate funding and yet the interventions under this programme are multi-sectoral. This means that several sectors receive a proportion of the funds to implement activities at the sub-county level and they include procurement seedlings, culverts for bridges, training of farmers, vaccines etc. 1.322. Under NSCG, Table 39 shows that public resources are spread too thinly and expenditures more broadly are weak. This programme which is multi sectoral to service delivery requires a lot of resources and invariably the public resources are thin under this programme. The insufficiency of resources has led to a number of inefficiencies including a very high cost of service delivery. For example, each sub-county in the districts of Arua, Bushenyi and Mbarara on average receives Shs 3-8 million under NSCG while NAADS funds released is Shs. 42-97 million annually which is an indication that NAADS receives an allocation of 92.9% more than NSCG. This calls for rethinking about this programme especially in terms of funding to achieve effectiveness.

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Table 39: Financial allocations and performance in selected sub-counties in Arua and Bushenyi district Programme 2005/06 2006/07 2007/08 Ullepi s/c- Arua est. actual % est. actual % est. actual % PMA 2,909,000 3,261,576 112.12 1,727,814 2,032,772 117.65 LGDP 6,193,980 5,094,882 82.26 5,826,045 5,826,045 100.00 NAADS 97,690,000 90,014,400 92.14 80,420,500 66,737,000 82.99 Cofounding

Bitereko s/c- Bushenyi PMA 4,907,700 5,453,000 111.11 5,500,000 LGDP 2,000,000 1,555,000 77.75 NAADS 48,713,000 48,713,000 100.00 59,097,000 36,097,000 61.08 Cofounding NAADS 2,647,000 2,647,000 100.00 2,970,120 2,970,120 100.00 Kyamuhunga s/c PMA 7,500,723 8,334,137 111.11 LGDP 62,924,780 46,791,183 0.00 76,452,000 0.00 NAADS 42,110,000 41,432,000 98.39 76,307,000 76,307,000 100.00 60,124,000 39,622,000 65.90 Cofounding NAADS 2,260,000 1,600,000 70.80 3,713,000 3,713,000 100.00 3,225,000 2,223,500 68.95 LGDP 6,292,478 0.00 4,679,118 0.00 7,645,200 Source: Sub-county budgets and reports

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1.323. Overall progress is being made towards achieving objectives in the PMA framework, but it is difficult to attribute benefits to specific investments. Besides, there is evidence that where technology is appropriate and adopted positive results are being achieved, and that in some districts some poor farmers are being targeted. Meanwhile, services provided through the traditional extension services (in non-NAADS sub- counties) provide a more diverse range of technologies and is more responsive to the needs of poor farmers. 1.324. This calls for increased funding for NSCG and need to amalgamate all the small funding programmes targeting poverty eradication in one big funding component in order to effectively and efficiently attain the desired target of poverty eradication. In some districts for example Ryeru sub-county in Bushenyi district, land shortage is a challenge. The average land holding is 1 acre and as a result agriculture is mainly on subsistence level posing a challenge to commercialization of agriculture. Concluding remarks

1.325. It is to note that funding modalities of NSCG need to be strengthened to effectively spur up the impressive results so far registered under NAADS. One of the key findings is that NSCG receives quite inadequate resources and yet it provides infrastructure which is a public good at the lower local government level as well as private goods. This financing arrangement is not supportive enough at that level as funds are fragmentally distributed to various departments. This notwithstanding, some significant progress has been achieved under this programme by using the meagre resources in managing extension services. 1.326. Surprisingly, despite the abundant analyses of the policy reform issues, little attempt, if any, has been made to realign the relationship between NSCG and NAADS. The funding under NSCG should be strengthened as more goods will be achieved at the lower levels.

Agricultural Extension Conditional Grant Introduction

1.327. The traditional Agricultural Extension is part of the Poverty Action Fund (PAF). These funds support the operations of the department of Agriculture. These include salaries and wages and non wage operational funds. The non-wage operational funds include: training of farmers; supervision and follow up of programs; planning of workshops plus other administrative activities. The Agricultural Extension Conditional Grant is implemented country wide in the various districts.

Main findings

1.328. A look at the overall budgets of selected districts reveals that production department receives the least percentage of funds as compared to other departments. The

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Agricultural Extension Conditional grant which is one of the sources of funds for the department is also quite inadequate. 1.329. There is inadequate extension staff that is not adequately facilitated. The motor cycles that were provided to the extension staff are too old and maintenance costs have tremendously increased. Similarly, the assistant agricultural officers lack transport to enable them conduct field visits. The few who manage to visit farmers use bicycles which limit their mobility in areas under their jurisdictions. 1.330. A look at Mbarara district illustrates the way funds are utilized at the district level. Table 40 shows the budgeting of funds in 2007/2008 at Mbarara District. It can be seen that close to 75% is budgeted for salaries, 12.93% for inland travel, 3.65% for fuel, leaving very little for doing actual work. This illustrates that there are insufficient funds under the agriculture extension service sub-component to facilitate the staff efficiently so as to meet the demands of the local communities. The high allocations to inland travel is explained by the increasing number of extension staff in the district from the various subject matter e.g. veterinary, fisheries, agriculture, vermin and entomology.

Table 40: Fund allocations to expenditure items for Mbarara district, 2007/08 Amount Description (Ushs) %ge 1 General Staff Salaries 113,525,000 74.50 2 Travel Inland 19,700,000 12.93 3 Stationery 2,000,000 1.31 4 Fuel 5,563,000 3.65 5 Workshops and meetings 3,837,000 2.52 6 Allowances 3,100,000 2.03 7 Telecommunications 300,000 0.20 8 Adverts and Public Relations 400,000 0.26 9 Vehicle Maintenance 3,000,000 1.97 10 Other Expenditure 966,000 0.63 Total 152,391,000 100.00 Source: Mbarara District Budgets.

1.331. In spite of the allocations that are made not much money is released to the programme. The findings from the field reports indicate for example, in the FY 2007/2008, Shs 69 million was allocated for the Agricultural Extension in Nebbi district but only Shs 42 million was released accounting for only 60% of the total budget. Similarly, in Bushenyi district the situation is not quite different from that of Nebbi, Mbarara and Tororo. Innovations made by the central government by introducing the 10% flexibility allocation to the major unfunded priorities has been failed by various line ministries which try to protect their budgets through constant reminders to local governments about their pressure to meet certain targets. On the overall, however, allocation of funds to agricultural extension particularly to the districts is quite low and inadequate and this is evidenced in the Figure 3.

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Figure 3: Comparison in allocation of funds in Tororo and Mbarara

Source: District Budgets (Tororo and Mbarara) NAADS and agriculture extension financing differ greatly in terms of amount of funds allocated to each (Figure 3). A critical analysis reveals that Tororo and Mbarara in 2005/06 received on average Shs.575m under NAADS while an estimated Shs 20,000,000 was allocated to Tororo and Shs.250, 000,000 to greater Mbarara, which included Kiruhura, Lyantonde, and , under Agricultural Extension. Despite the importance of the agriculture extension services at the lower levels, the flow of funds is highly uneven and decreasing in some districts and this has affected the facilitation of the extension staff. This situation is exemplified by the flow of funds to both Tororo and Mbarara in the subsequent FY of 2006/07 and 2007/08 (Figure 3). Concluding remarks

1.332. It is clear that there are several programmes and projects under MAAIF but the financing mechanism is not comprehensive as meager funds are released to the districts which fail the staff to achieve efficiency and effectiveness in the service delivery. The work plans formulated reflect funds that are scattered under many sub-components and this kind intervention does not create an impact. There is need to review and develop a comprehensive programme that can amalgamate the small and scattered funding levels into a big one.

Dairy Development Authority Introduction

1.333. Dairy Development Authority (DDA) is a statutory body, under the Ministry of Agriculture, Animal Industry and Fisheries (MAAIF), established by the Dairy Industry Act, 1998 with a mandate to develop and regulate the dairy sector. The Vision of DDA is to achieve a dynamic, regulated, profitable and sustainable dairy industry in Uganda. The Mission of DDA is to provide development and regulatory services that will

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Uganda Public Expenditure Review Phase 3 ensure increased production and consumption of milk, a sustainable and profitable dairy industry that will contribute to economic development and improved nutritional standards in Uganda. Objectives

1.334. DDA’s overall objective is to provide proper coordination and efficient implementation of all policies designed to achieve and maintain self sufficiency in the production of milk in Uganda by promoting production and competition in the dairy industry and monitoring the market for milk and dairy products. Specifically, DDA facilitates the dairy industry to:

• Raise the incomes and standard of living of small-scale farmers through increased and continuous returns in dairy farming. • Achieve and maintain self sufficiency in milk and dairy products and to export any surplus. • Promote increased dairy productivity with the use of available cost-effective technologies and to foster its sustainability with due regard to a cordial environment equilibrium. For the attainment of its objectives, DDA offers the following services:

• Register and license milk processors and traders. • Support dairy farmers’ marketing organizations. • Register dairy farmers’ groups. • Advise government on milk standards and co-ordinate the enforcement of those standards in liaison with the Uganda National Bureau of Standards. • Control and regulate dairy and dairy related import and export activities in conformity with the External Trade Act, but without violating the Animal Disease Act. • Implement Government policies designed to promote development of the dairy sector. • Support various dairy development activities such as dairy extension, dairy breeding, dairy research, dairy training, dairy products development and general market promotion including promotion of dairy exports. • Act as arbitrator in any conflict between dairy companies, farmers and other stakeholders. • Co-ordinate all dairy processing and marketing promotional activities. • Pool dairy processing and marketing data. • Advise Government on research priorities of the dairy sector, and anything connected with or necessary for the performance of the foregoing activities.

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Main Findings

i) Tracking of funds

1.335. As an autonomous organisation, DDA works closely with the Private Sector (i.e. milk processors, milk bulking centres, collection centres and individual farmers). It does not disburse its funds to the private sector, but only provides some essential services as described above. Its resources are for its own operations and therefore not traceable beyond DDA. However, the consultant analysed the utilisation of these resources in relation to accomplishing of its core functions. We use the Income and Expenditure Statement shown Table 41.

Table 41: DDA Income and expenditure Statement

Table … DDA- INCOME AND EXPENDITURE STATEMENT Income Statement for the year ended 31 Avg. December: 2004 %ge 2005 %ge 2006 %ge %ge Revenue UgShs Ugshs Ugshs

GoU Releases 607,630,338 54.06 700,021,291 62.40 580,958,950 71.63

ASPSII-DANIDA Grants 215,486,000 19.17 255,807,000 22.80 137,054,551 16.90 School Milk conference funds 0.00 52,314,310 4.66 - Internally generated revenue 58,525,000 5.21 113,312,273 10.10 93,005,902 11.47

Bank interest Received 0.00 454,724 0.04 -

Land O Lakes Support 2,683,600 0.24 0.00 -

Land Disposal 59,710,000 5.31 0.00 -

Sale of landed property 180,000,000 16.01 0.00 -

Total Income 1,124,034,938 100.00 1,121,909,598 100.00 811,019,403 100.00 Expenditure

Salaries and wages 454,525,549 53.46 446,624,005 39.88 430,784,083 48.75 47.36

Gratuity 57,459,548 6.76 80,711,500 7.21 30,723,750 3.48 5.81

Travel expenses 52,639,019 6.19 92,767,136 8.28 38,705,895 4.38 6.29

Training 16,326,000 1.92 117,815,250 10.52 15,956,300 1.81 4.75 Motor Vehicle Operations 52,802,729 6.21 95,727,428 8.55 69,761,181 7.89 7.55

Communication 15,224,168 1.79 21,971,866 1.96 25,777,869 2.92 2.22

Utilities 3,082,461 0.36 8,308,881 0.74 18,372,852 2.08 1.06 Board and Committee costs 18,118,720 2.13 17,624,500 1.57 23,443,600 2.65 2.12

Maintenance and Repairs 14,861,690 1.75 52,143,939 4.66 107,869,338 12.21 6.20

General Office expenses 113,508,170 13.35 129,356,429 11.55 83,952,581 9.50 11.47 Professional fees and commissions 6,264,000 0.74 33,492,144 2.99 12,457,701 1.41 1.71 Adverts, Promotions & Public relations 20,347,141 2.39 12,890,491 1.15 18,256,937 2.07 1.87 Subscriptions & Contributions 150,000 0.02 3,611,000 0.32 1,627,500 0.18 0.17 Laboratory testing & Analysis 4,820,000 0.57 1,300,000 0.12 2,771,000 0.31 0.33

Financial Charges 3,196,887 0.38 5,503,927 0.49 3,178,695 0.36 0.41 108 Economic Policy Research Centre (EPRC)

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Stamp Duty & Other taxes 8,684,230 1.02 0.00 - 0.34

Compensation & Refunds 8,200,000 0.96 0.00 - 0.32 Total Operating Expenses 850,210,312 100.00 1,119,848,496 100.00 883,639,282 100.00 Surplus from operations 273,824,626 2,061,102 (72,619,879)

Depreciation for the year 69,819,000 110,768,000 76,068,000 Net Surplus for the year 204,005,626 (108,706,898) (148,687,879) Source: Final Accounts of DDA ii) Funds and their utilisation The key observations include: • Over the 3 financial years 2004/05, 2005/06 and 2006/07 the financing of DDA activities has been reducing both from central government and DANIDA grants as in 2006 the reduction in funds was 17%. However, the analysis of the figures in the table 13.1 above reveals that on average the highest expenditure was on Salaries and Wages accounting for 53.2% including Gratuity, followed by General Office Expenses at 11.5% and Travel Expenses also accounting for 6.3%. It is important for DDA to control expenditures on general office as they seem to be inappropriately high e.g. it ranges from 11.47% to 13.35%. Similarly, maintenance and repairs expenditures seem to be unreasonably increasing e.g. in 2005 it was 4.66% from 1.75% that was earlier expended in 2004 and tremendously rose up to 12.21% in 2006. • The average expenditure on laboratory testing and analysis came only to be 0.33% which is quite low as this item needs to be highly financed to meet the international requirements. • The average expenditure on training accounted for 4.75% which is also quite low and yet it plays a big role in attainment of quality and compliance as required by international standards. This could even be funds that were spent on the training of DDA office staff. • The average expenditure on professional fees and commissions came to 1.71%. It can be seen that on the average only 6.79% was spent on the activities that focussed on the attainment of DDA’s objectives which is an inadequate expenditure and inefficient allocation of funds. It was also noted that: • DDA has a staffing and financial position that limits its effectiveness in achieving its core objectives throughout the cattle corridor in the country. • Field work results show that it has low collaboration with the districts in carrying out its mandate apart from areas of milk hygiene and milk handling during transportation. • Total national milk production has experienced a steady growth from an estimated 365 million litres in 1991 to 1.4bn litres in 2006 and this trend still continues in an upward direction.

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• Dairy processing, which is private-led, has also expanded with 13 medium-and large- scale operational Dairy Processing Plants in 2007 with a total installed capacity of 284,000 litres per day for single shift operations. • A number of products are manufactured by the different processing companies. These include: pasteurized milk, UHT milk (long life milk), cheese, yoghurt, cultured milk, butter, ghee, creams and ice-cream among others. • The milk consumption in Uganda still remains low. The current (2007) per capita consumption of about 50 litres is too low compared to the World Health Organisation recommendation of 200 litres per person per year. These opportunities need to be exploited while bearing in mind a number of unmet needs in the dairy sub-sector which are; • There is lack of resources to ensure adequate training in handling of milk, transportation and hygiene, inspection and monitoring of milk handling premises and equipment. • There is need to support DDA to procure modern laboratory equipment so as to meet the required standards, and be able to complete accreditation processes and modern milk tests kits for anti-biotic, pesticides and veterinary drug residues and other chemicals in milk so as to ensure safety of milk and milk products. • Building capacity of self-regulatory groups should be placed among the priority areas like Uganda National Dairy and Traders’ Association (UNDATA), made up of processors and farmers’ unions, by training and equipping them with test kits and study tours, including establishing regional bases for regulatory activities. • There should be well thoughtful strategy to create and develop capacity among farmer groups for purposes of value addition, processing and promotion. Similarly, DDA should strengthen its link with private sector service providers as well as local governments so that its interventions are greatly felt at the lower levels. Concluding remarks

1.336. From the above analysis there are two sides of looking at public spending in the dairy sub-sector. The role of the private sector in the sub-sector, for example in Kiruhura District, is evidently strong with some farmers able to handle disease, quality control and marketing. This is not the case with the majority of small holder farmers, and therefore the need for public spending. 1.337. To effectively and efficiently spend public funds in the sub-sector, it might be more suitable to strengthen the links with NGOs and other private sector stakeholders who have reputation and relevant experience. For example, Land O’ Lakes is very active in milk consumption promotion co-funded by USAID. The increasing importance of local governments in service delivery should be emphasised in the strategies that will steer the sub-sector to higher levels. 1.338. On the overall, the sub-sector should receive increased funding as its role is important in improving farmers’ incomes. The Authority has contributed to improved incomes in the cattle keeping areas. Although there are challenges of overcoming

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Uganda Coffee Development Authority Introduction

1.339. The Uganda Coffee Development Authority (UCDA) is a statutory organisation established by an Act of Parliament of 1991 after the dissolution of Coffee Marketing Board (CMB). It was established to promote and oversee the coffee industry as a whole by developing research, controlling the quality, improving the marketing and to provide for other matters connected with coffee. The GOU identified coffee as one of the major sectors for strategic intervention in its attempt to eradicate poverty. The reason for this intervention is that it provides livelihoods to well over 3.5 million people, and is currently the leading agricultural export commodity, accounting for over 30% of total foreign export earnings, has great potential to attract high value if exported as a finished product targeting specific niches. Objectives

• To promote, improve and monitor marketing of coffee with a view to optimizing foreign exchange earnings and payments to the farmers; • To control the quality of coffee in order to ensure that all coffee exported meets the standards stipulated by the contract between the seller and the buyer; • To guarantee and monitor the price of coffee in order to ensure that no contract for the sale of coffee is concluded at a price below the minimum price; • To develop and promote the coffee and other related industries through research and extension arrangements; • To promote the marketing of coffee as a final product; • To promote domestic consumption of coffee. 1.340. However, the coffee industry is faced with the problems of the coffee wilt disease, old aged trees, reduced soil fertility and lack of value addition. The cumulative infection level of Coffee Wilt Disease (CWD) since 1993 was about 44.5%, equivalent to 134 million robusta trees. Of the 300 million coffee trees, 166 million of them were too old for good quality coffee production as they surpassed the economic production age of 40 years.

Current initiatives to revamp the coffee sub-sector

There are a number of initiatives to revamp the sector, namely:- • A major government intervention to deal with the coffee wilt disease and to replace the over-aged trees through supply of coffee seedlings and plantlets (Table 7.11). This was done through UCDA and under the Strategic Crop initiative.

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• Introduction of coffee wilt resistant varieties through CORI. • Enforcing regulatory mechanisms for quality assurance of exportable coffee. • Training stakeholders-i.e. cafes and hotels in roasting and making specialised coffee. • Inclusion of coffee in the Warehousing System to address the financial constraints faced by the farmers. • Support the initiative by the private exporters to introduce branded Uganda coffee to final consumers in China, Egypt and UK.

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Main findings

1.341. Basing on the policy governing UCDA, the authority is mandated to deals with processors, traders etc especially on matters of quality control, seedling distribution, some aspects of production, post harvest handling and marketing. This kind of arrangement does not allow the authority to deal with famers and this has affected its performance. It is important therefore for UCDA to act on the pre-farming activities (i.e. before farming) which are also important in the achievement of quality of the output. 1.342. Furthermore, UCDA is allowed to plough back 1% of the cess resources and other licensing fees into some of these activities like quality control, coffee promotion overheads, seedlings distribution and disease control. However, these funds are quite inadequate and fluctuate over time which constrains the organization from achieving some of its objectives. It is therefore important to re-orient the public spending in the coffee sub-sector to focus more on quality enhancement, production, value addition and promotional activities as its functions have also been shifting over time from the core ones. 1.343. Surprisingly the statute of 1991/92 and amended one 1994, does not adequately address the role of local governments and yet they can play vital roles in the enforcement of quality. It is important to put in place a policy that protects the coffee trees from being cut down as it is the practice today. Thus it is important to rejuvenate the efforts of the organization so that it can adequately promote planting of coffee nurseries, research etc. 1.344. A look at the Income and Expenditure Statement of UCDA,

1.345. 1.346. 1.347.

1.348. Table 42A over the years 2002/03 to 2006/07 shows on that the expenditure, is as follows: employment costs has varied from 30% to 42%, international obligations has reduced from 17% to only 6% other office expenses has varied from 8.4% to 14.7%, travel costs has been maintained between 1%-2.6%, research and development has ranged

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Uganda Public Expenditure Review Phase 3 from 3.3% to 11%, quality and regulation has ranged from 2%-2.2%, while coffee promotion has of recent attracted attention and has varied between 22%-28% etc. However, it was noted that resources used to be spent on unproductive activities but it has in recent years been reversed. It is therefore important that inflows should be used based on the justifiable programme from the authority.

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Table 42: UCDA Revenue and Expenditure by items ANNEXT 1: TABLE 42A

%age of expenditure item against total revenue 4 years 5 years average average 2002/2003 2003/2004 2004/2005 %age 2005/6 %age %age 2006/7 %age %age Revenue UCDA Revenue & Share of Joint Venture 2,480,292,088 2,721,576,902 3,451,451,427 4,802,879,312 5,719,093,283 Less: Share of Joint Ventures 99,263,309 172,240,520 153,990,008 180,164,212 115,328,749

Total Operating Revenue 2 ,381,028,779 2 ,549,336,382 3 ,297,461,419 4,622,715,100 5,603,764,534

Operating Expenses Employment costs 927,966,147 38.97% 1,434,356,213 56.26% 1,374,177,519 41.67% 1,474,406,833 31.89% 42.20% 1,684,051,711 30% 39.77% maintenance & Consumables 116,707,377 4.90% 176,718,912 6.93% 139,880,802 4.24% 191,350,325 4.14% 5.05% 210,026,912 4% 4.79% Other Office Expenses 350,398,965 14.72% 214,109,169 8.40% 462,104,366 14.01% 378,860,809 8.20% 11.33% 507,722,936 9% 10.88% Travel costs 63,327,559 2.66% 36,642,410 1.44% 25,445,026 0.77% 85,873,479 1.86% 1.68% 53,913,207 1% 1.54% Research & Development Costs 255,751,009 10.74% 84,084,268 3.30% 161,150,340 4.89% 164,458,500 3.56% 5.62% 637,197,369 11% 6.77% Information systems 39,046,591 1.64% 41,282,576 1.62% 47,062,961 1.43% 41,671,724 0.90% 1.40% 56,736,635 1% 1.32% Quality & Regulatory 56,048,229 2.35% 51,769,093 2.03% 78,745,234 2.39% 94,285,894 2.04% 2.20% 86,701,586 2% 2.07% Support to coffee organisations 28,748,000 1.21% 32,942,000 1.29% 35,450,000 1.08% 44,760,000 0.97% 1.14% 48,050,000 1% 1.08% Coffee Promotion & Mkt Devt 0.00% 0.00% - 0.00% 1,326,058,241 28.69% 7.17% 1,311,492,213 23% 10.42% International Obligations 412,698,547 17.33% 351,444,379 13.79% 366,763,600 11.12% 381,557,758 8.25% 12.62% 353,100,000 6% 11.36% Common Technical Services - 0.00% - 0.00% - 0.00% 63,936,668 1.38% 0.35% 118,846,136 2% 0.70% Depreciation & Provisions 332,207,275 13.95% 542,637,467 21.29% 313,362,505 9.50% 256,164,770 5.54% 12.57% 337,269,976 6% 11.26% 2,582,899,699 2,965,986,487 3,004,142,353 4,503,385,001 5,405,108,681

TABLE 42B

%age of expenditure item against total revenue inclusive of Govt SIP 4 years 5 years average average 2002/2003 2003/2004 2004/2005 %age 2005/6 %age %age 2006/7 %age %age Revenue UCDA Revenue & Share of Joint Venture 2,480,292,088 2,721,576,902 3,451,451,427 4,802,879,312 5,106,331,249 Government Support 4,060,195,970 3,820,000,000 2,817,514,000 612,762,034 Less: Share of Joint Ventures 99,263,309 172,240,520 153,990,008 180,164,212 115,328,749

Total Operating Revenue 2,381,028,779 6,609,532,352 7,117,461,419 7,440,229,100 5,603,764,534

Operating Expenses Employment costs 927,966,147 38.97% 1,434,356,213 21.70% 1,374,177,519 19.31% 1,474,406,833 19.82% 24.95% 1,684,051,711 30% 25.97% maintenance & Consumables 116,707,377 4.90% 176,718,912 2.67% 139,880,802 1.97% 191,350,325 2.57% 3.03% 210,026,912 4% 3.17% Other Office Expenses 350,398,965 14.72% 214,109,169 3.24% 462,104,366 6.49% 378,860,809 5.09% 7.39% 507,722,936 9% 7.72% Travel costs 63,327,559 2.66% 36,642,410 0.55% 25,445,026 0.36% 85,873,479 1.15% 1.18% 53,913,207 1% 1.14% Research & Development Costs 255,751,009 10.74% 1,940,618,036 29.36% 3,021,150,340 42.45% 2,981,972,500 40.08% 30.66% 637,197,369 11% 26.80% Information systems 39,046,591 1.64% 41,282,576 0.62% 47,062,961 0.66% 41,671,724 0.56% 0.87% 56,736,635 1% 0.90% Quality & Regulatory 56,048,229 2.35% 84,211,973 1.27% 147,745,234 2.08% 94,285,894 1.27% 1.74% 86,701,586 2% 1.70% Support to coffee organisations 28,748,000 1.21% 32,942,000 0.50% 35,450,000 0.50% 44,760,000 0.60% 0.70% 48,050,000 1% 0.73% Coffee Promotion & Mkt Devt 0.00% 2,171,219,322 32.85% 890,000,000 12.50% 1,326,058,241 17.82% 15.79% 1,311,492,213 23% 17.32% International Obligations 412,698,547 17.33% 351,444,379 5.32% 366,763,600 5.15% 381,557,758 5.13% 8.23% 353,100,000 6% 7.85% Common Technical Services - 0.00% - 0.00% - 0.00% 63,936,668 0.86% 0.21% 118,846,136 2% 0.60% Depreciation & Provisions 332,207,275 13.95% 542,637,467 8.21% 313,362,505 4.40% 256,164,770 3.44% 7.50% 337,269,976 6% 7.21% 2,582,899,699 7,026,182,457 6,823,142,353 7,320,899,001 5,405,108,681 Source: Uganda Coffee Development Authority

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1.349. A reveals that amount of funds spent on research and development and quality and regulation is moderate thus limiting UCDA from achieving higher targets. For example, research and development on average accounted for only 5.16% while office expenses accounted for 10.88% which is 5.7% more than the expenditure on research. Surprisingly, training which one of the main sub-components is required to enforce quality compliance and understanding of the major international requirements has no budget line which may partially explain the low standards in the coffee subsector. 1.350. Further scrutiny of the income and expenditure statement reveals that there are losses incurred in all their joint ventures in China, Egypt and Denmark. It may now require re-evaluating these ventures in light of the initial objectives for which they were set up so as to reverse this trend. The team is of the view that these ventures are terminated and funds dedicated to the ventures and the additional resources are mobilised and used to brand Uganda coffee. This is the direction followed by successful countries. Also, the use of cess received from private sector exporters be reviewed so that it is effectively ploughed back to improve quality from farmer level, dealers and exporters. Concluding remarks

1.351. On the overall, coffee is a highly competitive crop in the international market. To be successful, there should be specific areas for public investment. On the one hand, we need to invest in sustained increased production through supply of inputs like supply of plantlets pesticides, training in disease control and even reforming the sub-sector; on the other hand there is need to invest in promotion and marketing. In Uganda’s case, this area seems to have been left out to the private sector to develop, which does not have the capacity to bring Uganda coffee to such a level that would enable the country to confidently compete favourably on the world market. In countries where there has been marketing success (i.e. Colombia) there has been sustainable public-private sector partnership in marketing and promotion.

National Agricultural Research Organisation Introduction

1.352. The PER is not only covering the National Agricultural Research Organization (NARO) period but also the transition of NARO to National Agricultural Research Station (NARS) when the organisation underwent a restructuring exercise incorporating important elements of PMA4. Consequently, there has been a shift in both policy and institutional environment which governs the entire research activity in Uganda. This is reflected in the NARS Research Act of 2005.

4 A policy framework under PEAP that provides for the transformation of predominantly subsistence agriculture into a market-oriented sector of the national economy.

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Vision

“A centre of excellence spearheading the generation and transfer of improved and appropriate technologies in collaboration with partners and clients for sustainable development”. Mission

“Contribute to the improvement of the welfare of the people of Uganda and the conservation of the natural resource base by increasing productivity and utilization of crops, livestock, fisheries and forestry resources through the enhancement of scientific knowledge, and the generation, adoption and dissemination of improved technologies, methods and policy advice”. Objective

To increase the quantity, quality, and availability of technologies, methods and policy advice for the efficiency and profitability of agriculture while improving food security, equity, and natural resources sustainability. Functions of NARS

• Provide strategic direction for publicly funded agricultural research. • Coordinate and oversee the development, consolidation and implementation of all aspects of agricultural research. • Set national priorities and harmonise agricultural research activities. • Advise and coordinate formulation of policy legislative proposals; research standards; codes of ethics; conduct, practice and guidelines for delivery of agricultural research. • Monitoring and evaluation of national agricultural research. • Mobilize funds for agricultural research. • Provide grants for research. • Provide leadership advocacy and promotion of agricultural research.

Research Agenda

New research themes have been developed and agreed upon namely: • Understanding people, livelihood systems, demands and impacts of innovations. • Enhancing innovation processes and partnerships. • Developing technological options, responding to demands and opportunities. • Enhancing integrated management of natural resources. • Linking producers, market opportunities and policies.

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• NGOs, NAADS, and other UPOs will constitute major uptake pathways for the new technologies. • NARO will need to collaborate closely with NAADS and other UPOs in its planning sessions/meetings. This is because the UPOs have gone far in preparing the ground for the new technology uptake. • The NARO/NAADS collaboration will also enrich the adoption rate of the new technologies by the farmer groups.

Research Outputs

1.353. While significant efforts have been made to produce research outputs, the effective use of public spending for NARS can be enhanced by ensuring that several uptake pathways are used such as NAADS, NGOs, CBOs, other UPOs, among others. Secondly, effectiveness can be enhanced by use of dissemination methods that not only raise the scientific image but more importantly, promote adoption of research outputs by the farming community. 1.354. Baseline Data and Information Study5 prior to NARS emphasised the need to enhance the M&E function of NARS at the Secretariat, at the institute level and other stakeholders such as NAADS, the local governments, NGOs, CBOs, etc. It is not enough to produce research outputs and simply leave it to the uptake pathways to disseminate them. Many of these pathways have their own limitations. For example, during the field visits to the sampled districts, sub-counties and farmer groups, the team noted the prevalence of farmers shifting from proven technologies (i.e. from boar goats to indigenous goats) following the death or unsatisfactory performance of some of these technologies. These incidents could be minimised and addressed at various levels if NARS is supported in developing effective M&E system. ii) Funding and utilisation 1.355. The services of NARO are public goods. NARS receives funding from a consortium of organisations through grants and loans and contribution from GoU. (Table 43). The utilisation of funds by NARO was examined by reviewing literature, visiting sampled districts and three national institutes and one ZARDI, to establish the flow and use of resources.

Table 43: Consolidate income and expenditure statement for NARS/NARO Table 15.1 - CONSOLIDATED INCOME AND EXPENDITURE STATEMENT FOR NARS/NARO 2006 %ge 2005 %ge 2004 %ge INCOME Other Income 716,182,334 536,339,030 372,679,039 EXPENDITURE IDA/ARTPII 6,528,755,894 25.05 8,377,670,281 28.61 4,275,045,108 15.17 GOU DEV ARTPII 7,376,434,980 28.31 4,336,637,398 14.81 3,522,020,699 12.50 GOU RECURRENT 1,655,082,717 6.35 1,998,592,813 6.82 2,979,007,875 10.57 ODPS 9,109,230,429 34.96 12,556,842,411 42.87 671,196,447 2.38 DIRECT EXPENDITURE 605,881,835 2.32 464,769,096 1.59 371,134,212 1.32

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DONOR-Other Donor Projects 0.00 0.00 15,041,190,785 53.36 DEPRECIATION 784,367,981 3.01 1,552,883,193 5.30 1,327,438,455 4.71 Total Expenditure 26,059,753,836 100.00 29,287,395,192 100.00 28,187,033,581 100.00 Excess of Expenditure over Income 25,343,571,502 28,751,056,162 27,814,354,542

iii) Tracking of funds

NARS has a structure through which it disburses funds to its component institutes, which in turn disburse to the ZARDIS, based on budgets and planned activities. The analysis of the utilisation of funds under NARO and by participating institutes and ZARDIS (Table 44).

Table 44: NARO Spending pattern and trends 2006/07 %GE 2005/06 %GE 2004/05 %GE HEADQUARTERS 18,116,365,758 53.31 14,773,528,704 56.69 16,353,135,397 55.84 INSTITUTES 11,385,969,379 33.51 9,095,899,317 34.90 10,016,560,717 34.20 ZARDIS 4,480,363,539 13.18 2,190,325,815 8.41 2,917,699,077 9.96 TOTAL 33,982,698,676 100.00 26,059,753,836 100.00 29,287,395,191 100.00

The Unfunded gaps/challenges are: • Equipment is not sufficient • Dissemination of technologies to clients/farmers. • Recruitment of and incentives to retain scientists. • Shifting from donor funding of research to funding through local resources. The challenges and the funding gap should be addressed in order to have technologies disseminated and the scientists pay should be reviewed so as to improve on the retention levels of the organization.

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National Forestry Authority (NFA) Introduction

1.356. The National Forestry Authority (NFA) was established under the National Forestry and Tree Planting Act 2003, after the divestiture of the Forestry Department, with specific responsibility to manage the 506 Central Forest Reserves (CFRs) with a total area of 1,265,742 ha. The Act was launched on 26th April 2004, marking the start of operations of NFA under the oversight of the Ministry of Lands, Water and Environment (MLW&E). It has a Board of Directors appointed by the Minister. The role of NFA is well defined in terms of vision, mission and core objectives. These have a strong influence on the preparation of annual work plans, allocation and utilisation of resources for NFA. Vision

To “contribute to a sufficiently forested, ecologically stable and economically prosperous Uganda”.

Mission

To “manage the Central Forest Reserves on a sustainable basis and to supply high quality forestry-related products and services to government, local communities and the private sector”.

Core Values

To guide its operations, the Authority believes in: • Integrity to uphold its Values and Mission to achieve the Vision. • Transparency in all processes and communications. • Excellence in the services rendered.

Objectives

The National Forestry Authority was set up to achieve specific objectives which include among others:

• Improvement of the management of the Central Forest Reserves – resulting in the sustainable yield of forest products and income through agreed forest management plans, new investment initiatives and professional forestry management. • Expanding partnership arrangements – so as to substantially increase the size of the Central Forest Reserve area being managed under collaborative arrangements with local governments, communities and private investors.

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• Supply good quality products and services - such as technical advice, seeds and forestry-related services to both public and private consumers on a contractual basis. • Attain financial sustainability by the fourth year of operations.

Main findings

i) Tracking of funds

1.357. The team was unable to track NFA funds to its final spending points, which are the 506 Central Forest Reserves, scattered throughout the country. Moreover NFA maintains a consolidated budget. However, NFA has accounting software that actually tracks the spending of its funds by services provided, agencies providing services and individual staff initiating and implementing various activities. The team recommends the accounting package for use by Project Units to simplify tracking of funds in future. 1.358. The funds are also spent on the basis of work-plants prepared and submitted by the Forest Supervisors who are responsible for a particular number of Central Forest Reserves. The Forest Supervisors are under the supervision of Sector Managers and these in turn are under the authority of Ranger/Plantation Managers. Spending of funds follows the same ladder of authority and based on the work-plans prepared by Forest Supervisors and consolidated by Sector Managers and Range/Plantation Managers.

1.359. The research team was availed accounts for two years (Table 45). It can be observed from the above table that the revenue is generated from the following sources: sale of forest products (over 38.63% of revenue), sale of seeds and seedlings (average 2.22% of revenue), ecotourism (average 0.42%), other products and services (0.97%), GoU (0.91%) and Grants (68.13%). The Grants and GoU contributions amount to close to 70% of the revenue. It means that NFA activity is still largely dependent on Grants and GoU support. 1.360. The expenditure on administrative costs is as high as 95.62%. It is made up as follows: payroll costs (39.06%), other personnel costs (7.57%), direct forest based costs (13.27%) and consultancy plus legal costs (13.27%). Thus expenditure on forest activities is still quite low in spite of the fact that NFA depends largely on Grants and GoU support. For long term sustainability it will necessitate a sustained drive for cost efficiency, leading to a reduction in administration and other operating costs. Revenue (from forest products and services) is steadily increasing as donor funds decrease. Grants from donors reduced from 98% of total spending in 2003/4 to 52% in 2005/6. 1.361. To cover part of the funding gap, NFA should encourage and promote private investment in the natural forests by creating a favourable environment. NFA activities should also be inclined to support District Forestry Services with their technical expertise. NFA caters for 30% of the forest resources of the country, while the districts cater for 70%. Forestry services in the districts are severely underfunded, with a high risk of being degraded.

Table 45: NFA Income and Expenditure

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2003/4 Av Item (9mths) %ge 2004/05 %ge 2005/06 %ge %ge Income of which: 1,032,618 12,263,447 13,914,372 - Sale of Forest Products 0.00 4,741,157 38.66 5,513,690 39.63 26.10 - Sale of Seeds and Seedlings 7,987 0.77 284,143 2.32 496,818 3.57 2.22 - Ecotourism revenue 0.00 64,742 0.53 100,724 0.72 0.42 - Other products & services 6,402 0.62 131,845 1.08 171,086 1.23 0.97 - Sundry revenue 10,377 1.00 198,190 1.62 156,593 1.13 1.25 - Government subvention 0.00 163,939 1.34 194,155 1.40 0.91 - Grants 1,007,851 97.60 6,679,431 54.47 7,281,306 52.33 68.13 TOTAL INCOME 1,032,617 100.00 12,263,447 100.00 13,914,372 100.00 Expenditure: Operating Expenses Payroll costs 435,222 42.25 4,306,576 40.14 4,599,420 34.80 39.06 Other personnel costs 78,861 7.66 809,123 7.54 992,895 7.51 7.57 Direct forest based costs 55,501 5.39 1,784,528 16.63 2,352,497 17.80 13.27 Printing and Stationery 26,985 2.62 160,806 1.50 216,071 1.63 1.92 Utilities 12,135 1.18 170,393 1.59 225,117 1.70 1.49 Vehicle Running Costs 64,806 6.29 1,105,153 10.30 1,470,163 11.12 9.24 Repairs & Maintenance 15,597 1.51 297,562 2.77 183,406 1.39 1.89 Advertising & Promotion 85,132 8.26 285,708 2.66 182,168 1.38 4.10 Consultancy & Legal fees 218,248 21.19 700,641 6.53 1,225,752 9.27 12.33 Other expenses 32,966 3.20 440,512 4.11 583,900 4.42 3.91 Board expenses 4,642 0.45 97,731 0.91 76,769 0.58 0.65 Audit fees & expenses 0.00 37,564 0.35 29,990 0.23 0.19 Administrative expenses 1,030,095 100.00 10,196,297 95.04 12,138,148 91.83 95.62 Depreciation 0.00 532,521 4.96 1,080,120 8.17 4.38 Total Operating Expenses 1,030,095 100.00 10,728,818 100 13,218,268 100.00 Operating Surplus 2,323 1,534,622 696,104 Finance Costs 2,323 29,956 30,139 Net Surplus for the period 1,504,666 665,965 Source: NFA Accounts

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Vegetable Oil Development Project (VODP) Introduction

1.362. This project is also under crop resources and the vote function objectives is to enhance agricultural production and productivity, in a sustainable and environmental safe manner, for improved food and nutrition security, employment, widened export base and improved incomes of the farmers. The overall objective of the project is contribute to poverty reduction among the poor communities. 1.363. Uganda is well suited for the production of a variety of oil seed crops. In spite of this, the country continues to import about 75% of its vegetable oil and fats that is worth over USD 62.5m as per 1996. Vegetable oil intake in Uganda is on average 2.3 kg per person per year as per 1996. This has risen to an average of 3kg per person per year which is still low by WHO standards of 7.5kg per person per year. Uganda also spends its meagre foreign exchange on the importation of essential oils which could be produced locally since the environment is favourable. It is on the basis of this background that the Government of Uganda started the VODP with the support from IFAD loan and Private Sector. The farmers are also expected to make a contribution to this project. It is an eight year project, which started in 1998. The project breakdown is as follows:

IFAD LOAN USD 19.90 M UGANDA GOVERNMENT USD 3.78 M PRIVATE SECTOR USD 120.00 M FARMERS USD 3.16 M

Project Objectives

1.364. The project aims, in general, to provide import substitution, diversify Uganda’s export commodities, improve rural incomes and improve the health of the population. The project therefore has specific objectives namely:

• Reduce poverty and increase farmer incomes by involving small holder growers in the oil crops production;

• Create an enabling environment to attract private sector investment in oil palm development with a view to reducing imports of vegetable oil and thus create savings on foreign exchange; • Promote private sector agro-industrial investment with the introduction of industrial oil processing mills that are environmentally friendly; • Improve the delivery mechanisms and availability of credit and improved seeds; • Develop the potential for sunflower and other arable oil seeds;

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• Provide the interested small holder farmers, particularly women, with appropriate technologies to extract oil from the arable oil seeds; • Stimulate and support the raw materials base and know-how for the subsequent development of commercial essential oils; and • Create an industry-financed consultative body that would advise government on its priorities.

Project Components

There are essentially 3 types of crops that the project is involved in. These are the following: • Oil palm; • Traditional oil seeds: Sunflower, Soyabean, Simsim, Groundnuts; • Essential Oils: Geranium, Citronella, Lemon grass, Mint, Vetiver, Eucalyptus, Basil, Lavender, Thyme. There are 24 districts that are involved in the growing of traditional oil seeds under the project, one (1) in the growing of essential oils and two (2) in oil palm development. The biggest is the Kalangala Oil Palm, where the farmers own 10% of the investment.

Implementation Arrangements

1.365. The Project has a National Project Coordinator who is supported the Accountant, M&E Officer, Technical Officer Oil Seed, Technical Officer Research and Essential Oils. Other support staffs under the project include the Administrative officers, Finance, Procurement and Stores.

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1.366. At the district level, the district agricultural officers are designated as the coordinators and it works through the existing district structures. The planning and budgeting is done through the participatory approach by involving the lower local governments. The project facilitates the staffs that are directly involved in the activities by provision of vehicles, fuel and computers. 1.367. In other implementation arrangements, the research component in sunflower and simsim is developed with the assistance of NASRI, Namulonge Research Centre and CORI. Similarly, the Uganda National Bureau Standards (UNBS) helps in ensuring that the international standards are fulfilled in the processing of the oils from the millers. 1.368. This section therefore analyses the funds that have been expended on the provision of goods and services and tracks those that have been released to local governments. It subsequently analyses value for money , benefit incidence, efficiency and effectiveness and conclusion is made on the extent to which the project is delivering on its mandate

Main findings

i) Tracking of funds and inputs 1.369. Table 46 reveals that there is leakage of inputs supplied to selected districts and specifically in Pallisa and Soroti. The aggregated figures show that 7,500kg of sunflower were released to Pallisa district but only 837kg were receipted reflecting 88.8% of leakage. Similarly, there is also leakage of funds in the same district for example in financial year 2005/06. The project financial records indicate that Shs. 37,174,700 was released to Soroti district but Shs. 33,716,200 was receipted by beneficiary district which indicates 9.7% of leakage.

Table 46: Transfer of funds and inputs to selected districts under VODP 2005/06 2006/07 2007/08 TOTAL PMU – DISTRICTS Procurement of Inputs (Sunflower Seeds) - Kgs Soroti 2,000 3,000 500 5,500 Pallisa 2,000 4,000 1,500 7,500 Financial Transfers to Districts, Ushs Soroti 37,174,700 37,174,700 Pallisa 54,136,220 21,643,500 75,779,720 RECEIVED AT DISTRICT LEVEL Soroti Soya Beans (Kgs) 425 425 Sunflower Seeds (Kgs) 500 36,715 Transfers (Ushs) 33,716,200 23,242,500 8,402,000 65,360,700 Pallisa Soya Beans (Kgs) 135 Sunflower Seeds (Kgs) 837 Transfers Received (Ushs) 71,787,300 39,591,100 20,768,000 132,146,400

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Source: Project Office and Districts

ii) Benefit incidence 1.370. Furthermore, the findings from annual reports provided by the designated coordinators at the districts in the financial years 2005/06 to 2007/08 for example Pallisa show a number of activities carried out as shown Table 47. They include mobilization meetings, group formation, farmer training, farmer visits and meetings, demonstrations, seed distribution and plantings. Like in other projects, training farmers in group formation specifically for savings and credit purposes was one of the main objectives of the project. With the use of community score card, it was established that over 65% of the beneficiary farmers were also those that participate in the NAADS programme. This approach of training farmers independently by each project is not cost effective and therefore there is need to design an integrated training programme that is comprehensive taking into account the various items that the sector intends to promote and support over the period.

Table 47: Training of farmers by gender and group membership

Mobilisation Meetings Group Membership Farmer Training

F/M F/M Financial Year Target Achieved %ge Male Female ratio Male Female ratio 2005/06 156 96 61.54 1,988 2,297 1.16 1,815 2,377 1.31 2006/07 2007/08 457 262 57.33 2,385 3,482 1.46 1,226 1,519 1.24 Source: Pallisa District, Vegetable Oil Project Reports

1.371. Mobilization meetings show a high level of achievement with achievement rising as far as 62% (Table 47). The group membership has a higher female membership than male in a ratio of 1.5 to 1. The attendance during training also shows higher response from female participants in the ratio of 1.2 to 1. The field findings further reveal that these farmers are literate and semi-literate and there is less participation from the youth. On average the beneficiary farmers utilize an acre for sunflower growing and land ownership is 2.5-3 acres and this was equally the same in the two districts of Pallisa and Soroti. ii) Efficiency and effectiveness 1.372. Furthermore, there is low adoption of sunflower growing in the two districts as the prices are very low. For example, the farmers who cannot add value to the produce are offered Shs.300 per kg of sunflower seeds which is quite very low while the processed one is Shs.2,000. Similarly, the processing equipments are quite expensive and those that are available are located in far trading centres. This means that sunflower which has been positively taken up by female famers faces stiff competition from other crops which are less laborious and offering a much higher price. 1.373. Furthermore, the project which commenced late like other related ones, encountered several challenges and these factors has hindered its performance. The insecurity in Northern and Eastern Uganda led to a delay in projection implementation in those areas. This is worsened by the following factors; poor and erratic weather

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Uganda Public Expenditure Review Phase 3 conditions have also led to poor yields; there are not many improved varieties that have been developed and the private sector participants are not forthcoming. 1.374. Besides, due to creation of districts the number has increased tremendously thus affecting budget, especially on transport costs. There is a high demand for sunflower that the small holder farmers are not able to meet. The land for oil palm development is scattered and fragmented making the development of oil palm inefficient and economically not viable. Further, the distribution of free seeds to the farmers attracted criticisms from the private suppliers who were affected by the arrangement as most of the suppliers had procured seeds in large quantities to sell to the farmers. iii) Impact of the project 1.375. On the overall, the impact of this project in the visited districts vary greatly as in Pallisa district the impact has been great only in Kakolo sub-county and more specifically in Mukalimaka women group while less impact has been created in Soroti. Concluding remarks

1.376. It is important to note that this project had initially crowded out the private sector as the provision of seedlings to the farmers affected the sellers who purchased the seedlings in bulk in order to capture the anticipated increasing market especially in Soroti. Furthermore, the project did not focus more on value addition as most of the farmers at the initial stages were subjected to very low prices. This project financing arrangement is not supportive enough as farmers travel very long distances to look for the milling machines which are located in trading centres. 1.377. On the overall, this project has contributed less to value addition in the products that are being produced which has kept the incomes of farmers low. This prevailing situation has affected negatively the adoption rates and this has made the project less attractive. However, the farmers and technical officers have benefited from various training programmes and if agro-processing is promoted, then it would attract the youth who are shying away from the various agriculture related activities.

The Fisheries Development Project Introduction

1.378. Support to Fisheries Development is a project under MAAIF that is aimed at contributing to the provision of infrastructure, like fishing landing sites as indicated in the DSIP. This project started in May 2003 and is covering a period of 5years. The project is being implemented in the areas around Lake Albert, Victoria, Kyoga, Edward and George. The specific objective of the project is to increase incomes from fishing through availability of infrastructure, training, higher quality fish products by strengthening Aquaculture Research and Development. 1.379. Prior to the formulation of the project, a Fisheries master plan study funded by ADB was carried out in 1997 which identified the need for investment in fisheries and improvement of infrastructure facilities of fish handling, fish quality assurance, aquaculture research and development. As a result, the Government of Uganda secured a loan from African Development Bank (ADB) to fund the identified project which became

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Uganda Public Expenditure Review Phase 3 effective from May 2003. The total cost of the project is Ushs 543.791bn where the Government of Uganda counterpart finances 30.5% of the total cost. 1.380. The project consists of 5 components namely;

• Improving of fish handling infrastructure development and quality assurance which involves upgrading of 30 landing sites, 21 fish market stalls and establishment of a fish quality assurance laboratory. • Aquaculture research and development which involves establishment of a modern hatchery at Kajjansi and 3 regional fish fry production and demonstration centres as well as equipping fish farmers with improved technology. • Fish Credit Fund that provides funds for fisheries production, trade and processing. • Capacity building which embeds technical assistance to staff and beneficiary training • Project co-ordination which ensures smooth implementation of the project.

Objectives

The Project has the following objectives: • To increase incomes from fishing through availability of higher quality fish products; • To increase aquaculture production through strengthening of aquaculture research and development.

Project Components

• Infrastructure Development and Fish Quality Assurance • Aquaculture Research • Capacity Building , • Fisheries Credit Fund, • Project Management

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1.381. Broadly, the purpose of this infrastructure and fish quality assurance component is to put in place infrastructure for proper handling of fish in production and the marketing chain. This is with special attention on the requirements of the international market. It also includes the extension of the laboratory at MAAIF to be used for monitoring the quality of fish. Similarly, fish quality assurance focuses on monitoring, surveillance and control at the water points by the provision of boats and motor cycles. Thus component aims at constructing 30 fish landing sites and 21 fish markets. 1.382. Secondly, the aquaculture aims at the development of fish farming, development of aquaculture infrastructure and fish research. The project also finances seed multiplication i.e. the production of young fish for farmers, hatcheries for seed multiplication which are to be located in Mbale, Gulu, Bushenyi and Kajjansi. The scope of works involved pond renovations and putting in place of relevant equipments. 1.383. Furthermore, other activities aimed at improving efficiency at demonstration sites like Kajjansi included: renovations of pond facilities for demonstrations; research in Tilapia seed production; improvement of laboratory facilities; setting up of library facilities and the building of a hostel to be used during training. 1.384. Thirdly, training of fisheries staff both at the ministry and the districts was to be undertaken. The training was supposed to be hands on training. It also included the sensitization of various stakeholders on fish handling methods and the issues of hygiene. The component, in addition, involved local and international consultancies on various issues concerning the fish industry. 1.385. Fourthly, credit services were incorporated as a component and this was to be provided by a banking institution which was to receive funds and pass them to fishermen, fish farmers and fish processors. The purpose was to set up a revolving fund. 1.386. Lastly, the project allocated funds to facilitate the staff at the project office to enable them implement, monitor and supervise project activities at the different project sites. This was to be executed by the project coordinator with the support of district designated officers in charge of the project.

Implementation Arrangements

1.387. The project is integrated into the main ministry activities which require the involvement of the field staff. This means that the ministry staffs are implementing the project activities within the departmental schedules. Since the fisheries department is understaffed and the officers have to carry out other activities this impacts negatively on the project implementation. 1.388. The District Fisheries officers are expected to supervise and monitor project activities at the selected sites. The District Engineers are expected to supervise the infrastructure activities at the district level to assess the quality and progress of the works. They are supposed to ensure that work is done according to specifications. The project is supposed to provide facilitation in terms of allowances and fuel among other items. However, the certification of the works is supposed to be carried out by a consultant who regularly visits the sites.

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Achievements as viewed by MAAIF headquarters

1.389. The Study Team reviewed the monitoring and evaluation report, dated September 2008, and various activities have been implemented over the period. The MAAIF headquarters identified the following as achievements that have occurred in the project: designs for the markets and landing sites were complete; superstructures of the 20 markets were completed and the defects that were identified in some of them are yet to be corrected. The laboratory was completed with a few snags and lack of fittings; landing sites have been contracted and 10 of them are at different stages of construction; four (4) other landing sites have been tendered out and patrol boats and motor cycles have been purchased and are were yet to be distributed to the districts. 1.390. Aquaculture research has been tendered out; farmers have been trained; 300 fish farmers have been supported with nets, feeds etc. The project has trained 1,000 fishermen, boat builders, extension workers, fish inspectors and service provider. The project has provided training for 12 staff at postgraduate level (10 at masters’ level and 2 at postgraduate diploma, 2 of them from the department and 10 from the districts) and two researchers have been trained at Kajjansi. The Study Team commends the Agricultural Planning Department for that elaborate report on the achievements registered under this project. However, in this report a focus is on the selected districts and analysis mainly is on value for money, benefit incidence and efficiency and effectiveness which were not adequately analysed by the monitoring team. This analysis will also determine the extent to which the project has delivered on the mandate of MAAIF. Main Findings

i) Tracking of funds 1.391. This project is centrally controlled and managed by a coordinator at MAAIF who is supposed to liaise with designated coordinators in the beneficiary districts. However, there has been very low involvement of the district staff and no funds have been transferred to lower levels. The team was informed that by the design of the project, the structure did not have that provision of transferring funds to the district level. Further discussions with the project staff on the transfer of funds to local governments confirmed that no funds are released and this is a challenge if MAAIF is to achieve effectiveness in sustainable service delivery. This also makes it hard to track funds as the private providers of goods and services are paid directly by ADB. ii) Technical efficiency 1.392. Although the funds were available by May 2003, delays in parliamentary approval and the delay in legal response by the Solicitor General delayed the disbursement of funds. This has delayed the provision of the vital infrastructures like markets and development of landing sites which was also emphasised in PER1&2 Report. The delays were attributed to time spent in proving land ownership at the sites since most of the land provided by communities had no land titles. Even when the ADB accepted to use land lease offers, these could not be obtained as the District land Boards were not in place and therefore land lease offers were obtained in 2005; 1.393. The procurement process also delayed the implementation of the activities as the PPDA Act came into force in 2003/04. Worse still, the procurement units were understaffed and poorly equipped and could not cope with procurement demands. The

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Uganda Public Expenditure Review Phase 3 ministry staffs were not familiar with procurement procedures being used and this affected the selection of the contractors. 1.394. The Government was not able to provide counterpart funds which were supposed to support operations. Likewise, the ministry of agriculture relied on ministry of works in the supervision of infrastructure and yet the capacity at the ministry of works was low and could not support MAAIF adequately. iii) Value for money 1.395. The utilization of funds under this project has been very low and inefficient in some of the visited projects. This is attributed to inefficiencies in procurement and lack of capacities among the contractors to implementation activities within the contract period. The project was poorly negotiated putting in place conditions that were difficult to meet and there was no engineer recruited that was based in the project office. It was established that in the first four years, only 18% of the funds released was utilized and worse still is that it has only risen to 35% during financial year 2007/08. 1.396. The failure to operationalize the credit fund by the Micro finance support centre has created inefficiencies in the provision of the planned deliverables. Most of the farmers have not been able to secure funds to fully support the activities e.g. extension of fish ponds etc. Although this component has not performed as expected in other projects, its functionality in this project set up could have had a contribution more specifically among the commercial farmers who have developed technical capacity but with limited financial accessibility. 1.397. The field findings reveal that the approach of standardizing costs for rehabilitation of ponds at Shs. 30 million has failed the implementation of the project activities particularly the rehabilitation of the ponds. Like in other MAAIF projects, the field assessment was not adequately done for the Nkoma fish fry centre and artificial hatchery in resulting into under programming and this resulted into cost overrun. Similarly, the use of a Canadian firm, contracted at the ministry headquarters like in other projects created a lot of inefficiencies as consultations with the relevant technical staff was not comprehensive. 1.398. Similarly, the Contractor who was originally contracted to execute the works at Nkoma lacked both technical and financial capacity as the site was abandoned without any work done. It was revealed that the Contractor who was received on the 25th May, 2005 at the site left after 2 weeks with no tangible work done causing a loss of 20% of the contract sum to the project.

iv) Benefit incidence and cost effectiveness 1.399. The Project is also to support small scale and commercial fish farmers. Selected farmers from the beneficiary districts were trained for a period of 1 week at Entebbe fisheries institute. The small scale fish farmers were supposed to get 3 million shillings in terms of inputs but information provided to the team by the beneficiaries reveals that they received only Shs 700,000 each in the districts of Busia and Tororo which creates doubt on the balance as there is no clear schedule for the release of funds.

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Similarly, even then the district technical staff believes the support of Shs 3 million is too small for them to execute meaningful work. 1.400. Besides, field findings from the districts of Arua, Busia and Tororo reveal that there is information asymmetry as support to commercial farmers is unknown since they deal directly with headquarters staff and the official suppliers. The assessment of their needs is also done at the centre and supplies to the farmers are directly coordinated by MAAIF and this has caused a break down in the monitoring, supervision, provision of technical guidance and total lack of ownership of the project. Similarly, commercial farmers who are supposed to receive inputs worth 7 to14 million shillings each has not involved the respective departments at the district level and this has made it difficult to verify the inputs obtained by the commercial farmers. The beneficiaries also claim that the official suppliers lack capacity and force them to select the inputs that are not their immediate needs and this signifies some of the unproductive expenditures under this project. The participatory principles that are enshrined in the bottom-up approach to planning and management of projects have not been embraced and this has a negative effect on the future support of the centrally controlled activities. 1.401. The Project provided a motor cycle to the district fisheries department but there is no support given for operational and maintenance costs in the districts visited. The districts therefore use their own resources to mobilize the farmers. But still worse is all the sites visited did not have site clerks as arranged and copies of the contracts which spell out the scope of works to be executed were not provided to the relevant departments and this has led to poor quality work particularly the fish markets at Tororo central market and Busia. This is because of the inefficiencies in the project management which has not involved the technical staff at the district level and yet the implementation arrangement spells it out clearly. 1.402. Furthermore, the field findings reveal that there is a top-down approach to planning and management of the project activities with lack of coordination between district, sub counties and project coordination unit instead of a preferred bottom-up approach that would involve communities in quality assurance. This lack of a bottom-up approach to the project planning and management in the beneficiary districts like Tororo, Busia and Mbale in eastern region for example is looked at as a constraint to poverty reduction because the poor in this case has little or no power to influence provision of improved services. In addition, a top-down approach compounded with information asymmetry prevents the achievement of a demand- responsive approach and associated gains. Therefore a shift in the approach will put the needs of the intended beneficiaries at the centre and ensure local ownership of the project and its sustainability. 1.403. The landing site at Majanji was visited and is still under construction. The major infrastructures to be constructed include fish drying store, changing rooms/toilet, VIP toilet, rubbish skip, fish handling bay, ice making shed, box wash, drying slabs, pump house, security office, administration block and jetty. The construction commenced in January, 2008 and was supposed to last one year and two months but has since been extended. The progress of the works is quite slow and the manpower at the site is limited. Concluding remarks

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1.404. It is evident that with the top-down approach of project management, ownership of the project tends to be elusive as has been exemplified above. Therefore the challenge is to design projects that have can also strengthen integrated planning and budgeting both at the centre and local government. This approach also reduces on the duplication of activities and creates fiscal space among different expenditures. It is also important to note that the above implementation arrangement as seen above does not help in the building of sustainable national capacities and does not promote ownership of project at the lower levels. On the overall, this project was designed with strategic objectives that would enable it contribute to the mandate of MAAIF. However, weaknesses in coordination and lack of facilitation at local government level have weakened its delivery on the infrastructure provision, inputs provision and no mechanisms for sustainable use or ownership.

Support to Irrigation Introduction

1.405. Support to Agriculture is one of priority areas in which support is required to modernise Agriculture and this falls within the portfolio of MAAIF. Under the irrigation sub-component, the overriding objective was to build capacity for irrigation and water harvesting. Basing on the DSIP, the government has been financing some of the irrigation activities and this section of the report focuses on how the utilization of the funds has delivered on the mandate of MAAIF. It also tracks the funds against the budget and analyses the value for money, benefit incidence, efficiency and effectiveness 1.406. Agricultural Production in Uganda is basically rain fed. Uganda is well endowed with water resources and these include lakes, rivers, swamps, streams and wetlands that can be tapped for production. But this kind of production is seasonal as it is interrupted by dry spells. This prevents sustained production thus making the country to be unable to meet domestic, regional and international demands. The dry weather spells have also an adverse effect on livestock production leading to the spread of animal diseases, strife and stress of animals. 1.407. Uganda has a surface of 241,039 sq km of which 15% is open water, 3% permanent wetlands and 9.4% seasonal wetlands. Of the estimated 6,000,000 hectares of cropped land in Uganda, only 54,000 hectares are currently being irrigated. Of these, 2,500 ha are under formally designed irrigation schemes. The formal irrigated area represents only 0.04% of the cropped land. 1.408. The Project activities are aimed at the rehabilitation of Mubuku, Doho and Olweny irrigation schemes in the districts of Kasese, Butaleja and Lira respectively. These schemes are currently managed by farmers with a Skelton of MAAIF staff to offer extension services. The Project which is government funded is valued at U$ 1,829 million and started in 1987 and completion date was supposed to be 2006.

Project Objectives

The Project has the following objectives:

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• To increase food production and in particular achieve self sufficiency in food by minimizing its importation; • To increase rural employment and income.

Rehabilitation of Irrigation Schemes

1.409. The expenditures at the scheme are aimed at the rehabilitation of infrastructure, machinery services and associated buildings and roads. It also intends to improve on enterprise earnings from these investments and increase the number of beneficiaries. Implementation arrangement

1.410. Doho Rice Scheme falls under the department of Farm Development. After the Chinese handed over Doho Rice Scheme to GoU in 1989 the MAAIF continued to manage the scheme from the headquarters in Entebbe. Thereafter an association was formed in 1994, the Doho Rice Scheme Farmers Association (DORSFA) that helped in the management of the scheme. It has an executive body of 11 members. The rice scheme is also divided into blocks and each of the blocks has its own council. There are 4,385 registered farmers in the association. The farmers did set up by laws that help in the management of the association. 1.411. The total acreage of the scheme is 2,500 acres and 2,380 acres is under crop. This makes it almost fully utilized. Since the ministry of agriculture is not facilitating the work at the scheme the farmers agreed to charge Ushs 20,000 per acre per year so as to raise funds to help manage the activities at the scheme. These funds are, however, inadequate to manage the Rice Scheme. This is further complicated by the fact that most farmers default payment.

Main findings

i) Tracking of funds 1.412. The financing of this project is purely government and originally Shs.2.4bn was budgeted for the rehabilitaion of each irrigation scheme (Table 48). However, the release of funds has not been impressive as only 35% of Shs.1,348,000,000 was released during FY 2005/06 while only 20% was released in 2006/07 which was 15% less than what was utilised in the previous year. The tracking under this project focussed on funds approved and released and it is clear that funds were too insufficient to finance the planned activities which shows low budget efficiency.

Table 48: Government release of funds against the approved estimates Support for Irrigation, Shs million 2005/06 2006/07 Total average costs of rehabilitation of three irrigation schemes (Shs 2.4b each) 7,200 Approved budget 1,348 1,100

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Budget released to the Project 476 220 Rate of actual to approved release, % 35% 20% Domestic debts for 2007/08, Shs million 243.6 Source: MAAIF Project Office 1.413. The Project conception, initiation and procurement are all done at MAAIF headquarters with no site engineer to oversee the works. The District Engineer who supposedly to have been in charge was not in the know of the scope of work and was not only able to provide any documentation concerning Doho Rice Scheme but no information on the cost of the project was available. There is no coordination between MAAIF and Administration and this has not promoted a sense of ownership which could have eased the work at the site.

ii) Technical efficiency and benefit incidence 1.414. The project design did not include the local people in the implementation of the project. Thus the community does not know their roles and responsibilities as regards the project. Currently, there local communities do not know whether the scheme belongs to the government or the communities. This has created inefficiency more specifically its utilization and the management. The field findings indicate that the production levels have reduced from 90 to 50% over the past years. At the same time the weak management of the farmers association exhibited by the leaders has suffocated the maintenance activities through failing to collect Shs.20, 000 per acre for 2,380 acres from the users which annually amounts to Shs.47, 600,000. Furthermore, there is ample evidence that even the little amount of funds collected is mismanaged by the leaders as mechanisms to make them accountable are nonexistent.

1.415. However, the scheme benefits a total number of 4,385 local farmers who are residents of Butaleja district. These are famers who on average manage 2 acres of the swampy land which is utilized for rice growing. The growing of rice is the main economic activity and it acts as the main cash crop as well as food crop but with supplements from maize and potatoes. The scheme is of great benefit to the local communities as they can afford the basic necessities for home use as well as scholastic materials for the children.

1.416. There was no work at the site and the contractor has not appeared for the whole of 2008. There is no designated engineer by MAAIF at the site to oversee the work neither did MAAIF designate the District Engineer to oversee the works. Likewise, staff of MAAIF who are mandated to carry out extension work in the area like other extension staff, are not facilitated at all. Whereas there is need to sensitize the communities of the importance of the scheme and adoption of new farming methods, there is high negativity towards change.

1.417. MAAIF has 5 staff members at the rice scheme that it supports by paying salaries. It also provided a motor cycle for the officer in charge. But it does not facilitate the staff to enable them carry out activities at the scheme while the imprest that used be released to meet costs of emerging needs was stopped in 1993. This led bills accumulating and in fact electricity has also been partially disconnected due to

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Uganda Public Expenditure Review Phase 3 nonpayment of electricity bills. The above scenario makes the staff morale to be low and the security of the assets at the site cannot be guaranteed.

1.418. The Contractor does not relate with the district in any way making it difficult for the district to supervise his activities. The staff at the scheme believes that the management of the scheme should be decentralized to the district for effective management. Furthermore, the field findings indicate that farmers have limited knowledge, skill and motivation to manage the scheme themselves as the willingness to pay is quite very low under the current arrangement where a farmer is supposed to pay Shs.20, 000 for an acre of land utilized.

1.419. Table 49 shows the status of activities, as executed by the contractor, at the rice scheme. The contractor has, however, abandoned the site and there are no activities taking place at the moment. The gates that control the flow of water are not functioning and yet this is one of the major causes of floods in this area.

Table 49: Status of implementation of activities at the scheme Activity Status a. Repair of plant and equipment of scheme Excavator repaired but down again b. Repair of flood embankments Partially repaired c. Rehabilitation of blocked spillway and bridging Partially done of farm roads d. Diversion of River Manafa by digging 1.5 km Incomplete of canal e. Raise and compact a farm road 4.5km from Not done Masulula to Block 1 f. Repair of water control gates Not done Source: MAAIF Project Office

1.420. From the above works so far done, the team established that the second planned activities are not compatible with the first ones. This is because the contractor had not completed most of the initial activities and even the few which were executed where substandard because of inadequate release of funds and failure to designate an engineer to over the activities. Table 50: Funds released and its utilization

Support to Irrigation Project

Contract Sum S/N Procurement Ref. Number Description of Procurement Supplier Ushs.(MAAIF) User %ge

1 PR:0115/GDS/SID/05-06 4 WD Double Cabin Pickups Go-Nissan 243,959,607 SIP 28.70

Procurement and Logistics 2 PR:0157/GDS/SIP/05-06 Supply of Assorted Office Equipment Limited 64,381,036 SIP 7.57 Revision of Scope of Works-phase 1, 3 PR:0168/WRKS/SIP/05-06 Rehabilitation of Doho Irrigation Uganda Kwegala Construction Ltd 442,368,296 SIP 52.04

4 PR:0158/GDS/SIP/05-06 Supply of Motor Vehicle for project activities Victoria Motors Limited 76,868,640 SIP 9.04

5 PR:0078/SRVCS/OSRIP/05-06 Guarding Services Blue Fox 3,000,000 SIP 0.35

6 PR:0079/SRVCS/OSRIP/05-06 Extension of Contracts for Cleaning Oyuku Mikele 3,000,000 SIP 0.35 136 Economic Policy Research Centre (EPRC)

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7 PR:0156/GDS/SIP/05-06 Supply of Office furniture Multi Options Limited 16,396,000 SIP 1.93

Total 849,973,579 100.00 Source: MAAIF Procurement Database

iv) Allocative efficiency 1.421. It can be observed from Table 50 that almost half of the funds released for the rehabilitation of the project were expended at the ministry thus making it difficult for the contractor to execute meaningful works. The analysis further reveals that only 52.04% was allocated to the actual implementation of work at the scheme while 47.96% was spent on goods and services at the headquarters which included supply of office furniture, supply of assorted office equipments, and 28.7% was spend on procurement of vehicles. Such expenditures seem to be inappropriate taking into consideration that the release of funds was irregular. Allocative and technical efficiency were not achieved from the released funds so far to finance the activities at Doho rice scheme. Concluding remarks

1.422. Despite the fact that there has been under programming under this project, the expenditures also are inappropriate among the various items. The funds that were released to finance activities turned out to be inadequate and the MAAIF staff placed at the scheme are not facilitated to execute the extension work. The farmers at the scheme therefore do not use any scientific knowledge of growing rice as they rely on the accumulated experience which is inadequate to enable them attain high productivity levels. Lastly, the weak management and limited coordination between MAAIF and farmers association has created an impression that the scheme belongs to the local community. This situation has resulted into inefficient management and adoption of poor farming methods as the production levels have tended to reduce with time. On the overall, this project has not adequately delivered on the mandate of MAAIF as funds released are inadequate and interventions made were appropriate but limited in scope.

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Northern Uganda Social Action Fund Introduction

1.423. The Northern Uganda Social Action Plan (NUSAF) is a project that started in 2004, that was designed to address all sectors in northern Uganda. The aim was to rehabilitate the broken down sectors that resulted due to the war that had been on going in that area. The project is implemented by the Prime Minister’s Office (OPM). Most of the funds were on construction activities in the education sector. NUSAF also allocated a sizable amount of funds in the agricultural sector. Expenditure allocations across sectors in selected districts

1.424. The table below shows the allocation of resources by NUSAF to the districts of Arua, Koboko and Maracha-Terego. The table shows a demarcation of resources between agricultural activities and non-agricultural activities.

Table 51: Resource allocation between non-agriculture and agriculture activities District Project NUSAF (100%) Received Arua Agric 1,625,090,023 1,627,862,359 Non-Agric 841,252,229 896,543,484 %ge Agric 65.89 64.48 Koboko Agric 442,607,191 442,599,692 Non-Agric 183,993,554 190,997,554 %ge Agric 70.64 69.86 Maracha-Terego Agric 723,895,087 716,155,744 Non-Agric 261,310,048 255,274,223.00 %ge Agric 73.48 73.72 Source: Arua District, NUSAF Office

i) Allocative effeciency 1.425. It can be seen from Table 51 that NUSAF allocated about 64.5%, 69.9% and 73.7% in agriculturally related activities in the districts of Arua, Koboko and Maracha- Terego respectively. Despite the above huge allocation of resources to agriculture, most of the funds previously were put at waste as there was no established monitoring system. Furthermore, there was no involvement of the subject matter specialists and this led to investments in enterprises with low production levels. However, it was not possible to track funds released and utilized by each district and therefore expenditure analysis and benefit incidence became the main focus of the study. 1.426. Currently, NUSAF support to the local communities has been reinforced with the involvement of local government subject matter specialist in enterprise selection. The agricultural enterprises in the visited districts for instance included aforestation, apiary, cattle rearing, crop production, dairy farming, fish farming, goat rearing, piggery and poultry keeping. ii) Benefit incidence 1.427. The criteria for determining the beneficiary is inclusive enough as all categories are seen to benefit from the programme. Table 52 shows the distribution of the

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Uganda Public Expenditure Review Phase 3 beneficiaries in each of the enterprises. All the three districts in Western Nile for instance show higher participation by men than women. Overall 56.5% of men participated in agricultural activities as opposed to 43.5% of women and goat as an enterprise is dominant among the male while poultry is highly managed by female in Arua district. However, in Koboko district, cattle are the dominant enterprise among all the local communities while aforestation is the least. It should be noted that under this programme crop production is among the disliked enterprises as well as piggery in Koboko. This is explained by the low participation level of the youth in crop production because of its long gestation period.

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Table 52: Participation levels by gender in selected districts Cattle Dairy Goat District Afforest. Apiary Rearing Crop Prod. Farm. Fish Farm. Rearing Piggery Poultry Total %GE

M F M F M F M F M F M F M F M F M F M F M F

Arua 87 83 74 64 405 295 49 21 10 6 33 42 550 212 119 93 257 286 1,584 1,102 58.97 41.03

Koboko 5 15 22 21 125 136 0 0 58 29 27 40 45 37 0 0 96 57 378 335 53.02 46.98

Mar/Ter. 71 80 62 54 33 24 49 44 22 16 36 40 64 57 84 59 97 97 518 471 52.38 47.62

Total 163 178 158 139 563 455 98 65 90 51 96 122 659 306 203 152 450 440 2,480 1,908 56.52 43.48 Source: Arua District NUSAF Office

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1.428. Like in other beneficiary districts, Pallisa allocated NUSAF funds among various poverty focussed activities/projects which included community development initiative (CDI), vulnerable group support (VGS), conflict resolution and conflict management (CRCM), and youth opportunity project (YOP). Basing on field findings, the table below shows how funds were distributed by NUSAF to the various components of the project in Pallisa district. As can be seen the highest expenditure was on CDI (73.22%), followed by VGS (22.47%), then YOP (2.47%) and CRCM (1.85%) which looks to be an efficient allocation as most of the funds are spent on the activities identified by the communities.

Table 53: Allocation of funds under NUSAF, Pallisa district Number Total Project Type Funded NUSAF 100% Total Received Accounted % of Total % Accounted CDI 283 8,985,319,290 9,334,128,945 8,896,166,792 73.22 95.3 VGS 421 3,000,179,428 2,996,222,857 2,730,053,732 22.47 91.1 CRCM 65 224,513,500 224,513,500 224,425,200 1.85 100.0 YOP 34 299,979,840 299,979,840 299,979,840 2.47 100.0 TOTAL 803 12,509,992,058 12,854,845,142 12,150,625,564 100.00 94.5 Source: Pallisa District, NUSAF Office

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Concluding remarks

1.429. It is evident that with the new approach of involving subject matter specialists in the activities has greatly contributed to improved adoption of technology and management of the enterprises. However, the challenge is to strengthen the principles of integrated planning and budgeting so that duplication of activities and projects is kept at minimum. This will not only create fiscal space among the contributors to the agriculture sector but also efficient use of the resources will be achieved. It is also important to note that creation of parallel implementation units are generally not helping build sustainable national capacities and do not promote ownership of some of the project activities.

Cotton Development Organisation Introduction

1.430. The Cotton Development Organization (CDO) was established in 1994 by an Act of Parliament. It has the responsibility of monitoring the production, processing and marketing of cotton so as to enhance the quality of exported and locally sold lint; to promote the distribution of high quality cotton seed, and to generally facilitate the development of the cotton industry. Past Performance and Intervention in the Cotton Sub-sector

1.431. During the 1960s, Uganda was Sub-Sahara Africa’s largest cotton producer. However, political instability and poor policy choices of the 1970s led the sector to its demise. Attempts to revive the sector with lending operations during the 1980s failed. There is a sense that the sector lags behind its full potential. Various reports have identified constraints that impede further growth of the sector which include, but are not limited to, low quality of cotton, lack of domestic textile industry, and low use of purchase inputs due to lack of rural credit. The fundamental problem of Uganda’s cotton sector is its low profitability, which reflects the displacement of cotton by food crops6. There has been substantial investment in the sub-sector through various government and donor funded projects in the excess of USD 50 million. In addition, the sub-sector has been reformed (i.e. by assisting ginners to develop their capacity, researchers to develop better varieties of seeds, etc). Current Initiatives

1.432. The cotton sub-sector is one of the key strategic intervention crops by government aimed at emphasising private sector participation. Accordingly, the six components of intervention by CDO are:-

• Procurement of seed for planting

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• Procurement of three seed de-linting and grading machines, • Research and seed breeding, • Facilitation of Field Extension Workers, • Mobilization and sensitization of farmers and other stakeholders, • Research study on relevant irrigation systems for cotton production. 1.433. Over the years, these components have been implemented with varying degrees of success. Performance has solely depended on public funds. Due to limitations in budgetary releases, some components have been suspended, while activities of the remaining ones have been greatly scaled down. During 2005/06, emphasis was put on three major components: provision of planting seed; mobilization and sensitization of farmers and other stakeholders. These efforts have not yielded good results in increasing cotton production especially after the peak of 2004/5 of 254 Metric Tons. It is estimated that cotton production is now less than 100 Metric Tons. Main Findings

i) Tracking of funds

1.434. CDO deals directly with the private sector (ginners and farmers). It receives cess and licensing fees. The team was unable to ascertain the benefits of the cess but there is potential for these funds to procure high value cotton seeds badly required in the sub- sector, given the 40% germination rate of existing cotton seed. A look at the Income and Expenditure Statement in the Table 54 the following observations can be made:

• Financial position of the organization is poor with a staggering net deficit of close to Shs. 1bn as of 2005/06. • CDO is not cost-effective in the handling of cotton seed to reduce on huge expenses incurred at different levels of the seed distribution chain. • Funds provided to CDO are geared towards the promotion of cotton production but specifically for de-linting and dressing cotton seed for planting. • In 2004/05, it gave farm gate price support to the farmers of Ug Shs 50/= per kilo of seed cotton sold during that season. The crop eligible for this price support was 121,834,797 kgs of seed cotton that gave a total value of Ug. Shs. 6.1bn. Peak production of 240 Metric was realized.

Table 54: CDO Income and expenditure

Table - INCOME AND EXPENDITURES FOR CDO Av. 2002/03 %ge 2004 %ge 2005 %ge 2006 %ge %ge

INCOME & EXPENDITURE

Statutory Incomes 858,027,366 20.51 1,641,269,350 22.66 1,984,579,012 16.81 1,130,142,981 25.48 21.37

IDA/IFAD Funds 0.00 0.00 0.00 0.00 0.00

Govt Contribution 3,237,850,000 77.40 5,468,328,042 75.51 3,730,561,071 31.60 3,305,580,400 74.52 64.76

Other Incomes 87,212,657 2.08 132,220,205 1.83 0.00 0.00 0.98

Cotton Price Support Subsidy 0.00 0.00 6,091,739,850 51.59 0.00 12.90

Total Income 4,183,090,023 100.00 7,241,817,597 100.00 11,806,879,933 100.00 4,435,723,381 100.00

Total Operating Expenses

Staff costs 475,807,638 42.49 527,111,004 8.12 652,709,463 23.35 759,600,282 14.76 22.18 143 Economic Policy Research Centre (EPRC)

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Administration expenses 419,598,759 37.47 709,354,650 10.93 869,368,781 31.10 894,892,320 17.39 24.22

Other expenses 224,531,073 20.05 5,587,877,546 86.11 773,225,573 27.66 3,600,391,187 69.97 50.95

Depreciation 0.00 80,287,531 1.24 144,997,804 5.19 150,813,465 2.93 2.34

Surplus from operations (/Deficit) 0.00 337,186,866 5.20 -969,973,893 -34.70 366,578,312 7.12 -5.60

Loss on disposal of assets 0.00 0.00 0 0.00 -11,694,463 -0.23 -0.06

Net Profit(/Loss) for operations 0.00 337,186,866 5.20 969,973,893 34.70 354,883,849 6.90 11.70

Surplus/Deficit from previous period 0.00 0.00 0.00 0.00 0.00 Net Surplus/Deficit from previous period 0.00 -713,645,068 -11.00 376,458,202 13.47 21,574,353 0.42 0.72

Net Surplus/Deficit carried forward 0.00 -376,458,202 -5.80 -21,574,353 -0.77 -991,548,246 -19.27 -6.46

Total Operating Expenses 1,119,937,470 100.00 6,488,901,193 100.00 2,795,185,470 100.00 5,145,491,059 100.00 Source: Final Accounts of CDO

1.435. Despite the favourable incentives and environment provided by Government to the sub-sector, cotton production continues to decline, calling for urgent need to assess the causes of decline and develop strategies to reverse the decline. The support given by Government is mainly used to support Staff Costs (average 22.18%), administrative expenses (average 24.22%) and other expenses (50.95%). There is great potential for significant participation of the private sector in this sub-sector. Critical inputs in the sub- sector are: cotton seed, pesticides and extension services. The sub-sector exhibited poor performance during FY2007/08 and production plummeted to a mere 65,000 bales down from 134,000 bales in 2006/07. This miserable output was attributed to internal dynamics of the sub-sector, including late or no delivery of pesticides, bad weather and competing crops. Currently, the Uganda farmer gets Shs. 240,000 per hectare of cotton. 1.436. The view of private dealers in the sub-sector is that the Uganda farmer needs to get in excess of 1million shillings per hectare to go back to cotton and perceive it as worthwhile enterprise. There is need to develop or import cotton seed variety that enables the farmer to earn reasonable revenue per hectare of land (i.e. the necessary quality in terms of the length of the fibre) as this land being competed for by other crops and alternative uses.

General perspectives on PETS in MAAIF

1.437. In light of the commendable progress made in the implementation of activities under different projects and programmes, the following report highlights that MAAIF is now at a critical juncture, facing important choices in tracking public expenditures to beneficiary projects in the districts. The high benefit incidence more specifically under the production enhancement component under different projects is generating much needed results that can now absorb more priority expenditures while the rural infrastructure component has not yet performed. It was observed that implementation of projects has not been consistent with specific government policies and strategies. This has created uncoordinated interventions and resulted in ineffective and inefficient use of resources. The centrally controlled activities faced many challenges while those that were directly managed by the districts registered impressive results and created a high sense of ownership. However, it was generally observed that lack of reliable agricultural statistics to effect planning and adequate monitoring and evaluation was among the main constraint

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Uganda Public Expenditure Review Phase 3 of MAAIF. Thus, a summary of critical issues are briefly discussed from which key policy recommendations are later drawn.

i) Efficiency and effectiveness in agricultural expenditures

1.438. Efficiency in agricultural expenditures is generally low under the rural infrastructure provision, and allocations within the sector have not been rationalized. The current trends indicate that MAAIF cannot provide for various infrastructures like roads, bridges, water supply plants, markets and other facilities. The resources spent by MAAIF on project activities risk to be wasted as most of the project activities are in a semi– incomplete state or never kicked off. Allocations were fairly achieved across project activities even though the delivery mechanisms are still lacking but nevertheless, technical efficiency is still elusive and hence low value for money. The great variation in amount of funding available to different sub-components does not follow any apparent criteria. Ideally, the allocation of funds to various project activities should depend on predetermined criteria such as anticipated benefits that accrue to the farmers. 1.439. Generally the progress has been low under the rural infrastructure provision which were centrally procured compared to other subcomponents. Similarly, the expenditures on the trainings have been inappropriately high in each project and focussing on farmers which have fatigued them and therefore they would rather have those funds translated into the provision of inputs. The unit costs of items centrally procured are quite high compared with the district ones and this has been evident in the prices offered for local and Boer goats, Vaccines, rehabilitation and construction of roads, bridges and markets. Likewise the micro credit institutions in the districts, farmers are offered loans on unfavourable terms that included short grace period of two months to start paying the principle as well as interest rates which average between 3-4 percent per month and this transforms into 36-48 percent annually. The autonomous organizations performance on other hand is quite low as financing has been quite limited under unfavourable policies that call for urgent review. ii) Tracking of project funds and inputs 1.440. The tracking of funds and inputs was carried out and leakages were identified under some projects such as VODP, NLPIP, and Farming in Tsetse Controlled Areas (FITCA), NWSADP etc. The leakage of funds ranges from 4% -100% and inputs varied from project to project in various districts. In Pallisa district for instance, Sunflower inputs were tracked and it was evident that about 88.8% leakages at the district level occurred. Similarly, records in the NLPIP office revealed leakages more specifically in the distribution of heifers in Pallisa and Soroti Districts where 4.9% and 2.2 % leakages respectively where found to have occurred. The vaccines also portray a similar picture as tracking of Foot and Mouth Disease vaccines released to Bushenyi district revealed 23.5% leakage. Further discussions on the leakages indicate that some funds were expended by MAAIF on behalf of the districts by providing them with inputs and equipments which is irregular. While other funds were shared among the various local governments that were sub-divided but this response is not satisfactory. On the government contribution towards the project implementation, it was established that it has

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Uganda Public Expenditure Review Phase 3 on many occasions not been satisfactorily met as it ranges between 20%-96% but with many projects receiving less than 50%. iii) Benefit incidence 1.441. Despite the high amount of funds spent on several components, the benefit incidence is generally high among female farmers and especially arising from the production enhancement component. Overall the expenditures in agricultural activities have had mixed results varying from project to project as well as the respective sub- components. The infrastructure component has limited poverty focus as compared to other components. However, poor farmers have benefited from the provision of seedlings, trainings, market and price information provision and this was observed under several projects. On the overall, micro-credit sub-component has not performed as expected in all the projects where it was assumed to play a vital role of loan provision. This component has not only been entirely left to the private sector, its operation has been detached from the project sub-components. The loan provision for instance has not benefited poor farmers including people with disabilities, unemployed and even very low income earners with small landholding of less than 2 acres. 1.442. The expenditures on trainings under several projects though inappropriate, female participation was high accounting for 55 percent while 45 percent for male. There is limited participation of the youth and people with disabilities in most of the projects and programmes. These projects have benefited communities that are rural based more than the peri-urban and the majority are able to read and write (i.e. most completed primary school standard). However, the criteria of selecting a host farmer of an enterprise has generally attracted criticisms as the process of spreading the benefits is long and number of the members on average is 20 which is quite big. Some farmers also fail to pass over animals to other beneficiaries and in some instances the animals are sold off e.g. Mbarara under NAADS and Soroti under NLPIP are among the victims. Efficiency has not been achieved in linking farmers to buyers as well as embracing the bulking as differences in individuals’ day to day needs was widely reported in all the north-western Nile districts. iv) Value for money 1.443. Most of the projects that were contracted out by MAAIF have crowded out some of the vital expenditures on other items because of high cost overruns of infrastructures especially on roads, bridges and markets. Yet putting actual value for money for some of these expenditures has proved to be difficult. In most cases, the construction of bridges, rehabilitation of roads has not been achieved as the works are incomplete with over 3 times contracts extended, and specifications in some cases not met e.g. gravelling thickness. In addition, it was established that less than 10% of large projects were found to have been built on time, with actual specification and within the specified budget. Project activities especially the rural infrastructure provision are either incomplete or ongoing but at a slow rate or abandoned. The Study Team has been informed that of late there has been progress in the infrastructure provision activities but still the time spent and cost overruns should not be overlooked. In some districts there are cases of death of animals like goats and cattle and this has been highly attributed to the poor quality arising from deficiencies in procurement and coordination. Generally value for money is still a challenge for the sector as its implementation systems are weak but they can be improved.

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The major emerging issues in the implementation of projects in the districts

• According to the respondents, weak project coordination has delayed the implementation of the projects because the decision makers are based in Entebbe. • The field assessment of the planned interventions was not adequately carried out and this has attracted variation and cost overruns in some projects. • The facilitation of the district technical staffs is irregular but also not in some instances directly released to the district. For example, under NWADP the funds for district engineer’s supervision and monitoring are incorporated in the total cost of the contract which is paid to him by the contractor. • There is delay in approving payments for the contractors and most of them receive payments for the works done after 2-3 months. • Some sub-components like micro credit were not adequately integrated and this has failed the implementers to maximise the benefits. • Infrastructure provision has been quite slow and scheduled at the close of the projects and the performance has thus not been ascertained. • Absorption of funds under the infrastructure provision has been quite very low. • According to the respondents, staff in the production department are not only few but are poorly facilitated as most of them are not fully involved in the project work. The field findings show that official provisions on staffing are met in some cases but the huge staffing gaps exist. • The performance of the autonomous organizations is limited by the policies which need to be reviewed. In summary, MAAIF needs to improve its performance on the following: • Agricultural statistics and information. • Monitoring and evaluation of the ministry activities, physical and financial performance of the agricultural sector as a whole, its semi-autonomous agencies and the sectoral activities undertaken in the districts. • Supporting and guiding local governments in agricultural sector programme and project planning and implementation. • There is need for the directorate of crop resources to improve on value addition levels, crop protection and enforcement of standards and regulations. • More support is needed in the provision of water for agricultural production, and sustainable use of natural resources. • Controlling and managing animal epidemic diseases and pests affecting animal production. • Promotion of sustainable use of natural resources for livestock and fisheries production. • Technical advice, quality assurance, technical audits and support supervision in areas of livestock, fisheries and entomology. • Promoting the interest of local governments, the private sector, farmers and other sector stakeholders in relation to the sector.

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2. Way forward

2.1. Training: There is need to review the expenditures budgeted for training activities in the projects and programmes. The budgets are huge and there is duplication of training activities and yet farmers’ demands are more on tangible agricultural inputs. The government should restructure the development projects and programmes so that youth participation becomes active in the agro-processing. And the support to micro credit institutions in terms of training and logistics should be strengthened to enable them improve on the service provision. 2.2. Funding: Insufficient counterpart funding from government that has partly contributed to under performance in most of the projects necessitates for adoption of budget support for some areas that require long term support. All development partners, government agencies and other organizations should declare their contributions to local government as this will not only reduce on the duplication of activities but will strengthen the coordination. The funding modalities of NSCG need to be strengthened as the allocations are inappropriately very low. There is need to increase the funding to the production enhancement through increased promotion of improved seed, technology development etc. 2.3. Policy revision: The selection criteria of any three enterprises under NAADS should be revised as it is too prohibitive and leads to resource wastage and low adoption rates. The ministry should fully utilise the established decentralization structures to manage the projects for effective service delivery, local ownership and building capacity. The ministry should therefore emulate Ministry of Local Government (MoLG), and other implementation programmes like NSCG etc. There is need to review the policy governing autonomous organizations as their activities have been stretched beyond the core functions. Similarly, the funding should be increased as well as strengthening its working relationships with local governments and beneficiary groups or organizations. The various templates used in the study more specifically in the tracking of resources should be adopted and instituted in all departments as a regular instrument for future tracking of resources both at MAAIF and local government level. The government should review its role and actions in the irrigation schemes of Doho, Mubuku and Olweny as the current expenditures and operations are not efficient and effective. 2.4. Others: The procurement and delivery systems for essential agricultural inputs should allow the participation of the farmers as it reduces on the cost of provision of the inputs. There is need to adopt logical framework approach to planning, monitoring and evaluation in order to improve on the information management in the ministry. There is need to integrate project activities into the mandates of the respective departments as parallel project implementation units are generally not helping build sustainable national capacities and do not promote national ownership. The introduction of information management system in the ministry will enable policy analysts to refocus on the most urgent issues as well as strengthening the planning and monitoring capacities. There is need to review the accessibility requirements for loans under the gender dimension as female access to loans has been limited.

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Possible recommendations

1) There is need to review the expenditures on training in the projects and programmes so as to reduce on the huge budgets and duplication of training activities so that farmers’ demands for more tangible agricultural inputs are responded to. 2) The selection criteria of any three enterprises under NAADS should be revised as it is too prohibitive and leads to resource wastage and low adoption rates. 3) The ministry should fully utilise the established decentralization structures to manage the projects for effective service delivery, local ownership and building capacity. The ministry should therefore emulate ministry of Local Government (MoLG) under LGDP, and other implementation programmes like NCSG etc. 4) The procurement and delivery systems for essential agricultural inputs should allow the participation of farmers and local suppliers as it reduces on the cost of provision of the inputs as exemplified in the NAADS programme. 5) Appropriate technologies should be promoted and pests and diseases control should be strengthened in order to reduce losses incurred by farmers. 6) Insufficient counterpart funding from government that has partly contributed to under performance in most of the projects necessitates for adoption of budget support for some areas that require long term support. 7) All development partners, government agencies and other organizations should declare their contributions to local government as this will not only reduce on the duplication of activities but will strengthen the coordination. 8) There is need to adopt logical framework approach to planning, monitoring and evaluation in order to improve on the performance and information management in the ministry. 9) There is need to integrate project activities into the mandates of the respective departments as parallel project implementation units are generally not helping build sustainable national capacities and do not promote national ownership. 10) There is need to review the policy governing autonomous organizations as their activities have been stretched beyond the core functions. Similarly, the funding should be increased as well as strengthening its working relationships with local governments and beneficiary groups or organizations.

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11) The various templates used in the study more specifically in the tracking of resources should be adopted and instituted in all departments as a regular instrument for future tracking of resources both at MAAIF and local government level. 12) There is need to review the role of government and farmers in the irrigation schemes of Doho, Mubuku and Olweny as the current expenditures assessed in Doho specifically will not improve efficiency and effectiveness. 13) The funding modalities of NSCG need to be strengthened as the allocations are inappropriately very low. 14) The government should promote the youth participation in the agricultural activities especially in the agro-processing which will create employment as well as value addition. 15) In order to reduce on operational costs, micro credit institutions should be supported in terms of equipments like motor cycles, computers and training in loan management so that they can be able to operate efficiently. 16) MAAIF should strengthen its working links with other ministries e.g. Ministry of Tourism, Trade & Industry, UBOS on agricultural statistics /data, MOFPED on capacity building for micro finance institutions. 17) MAAIF should add credibility to the DSIP by increasing attention to its use in terms of prioritization of activities and resource allocations.

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Uganda Public Expenditure Review Phase 3 ANNEXES

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Annex 1: Respondents in the Public Expenditure Study in Agriculture study Name Position Administrative unit Dr. Apili Evelyn National Coordinator NSADP MAAIF Mr. Kiwolu Patrick Monitoring and Evaluation officer NSADP MAAIF Dr. Kajura Stephen National coordinator NLPIP MAAIF Mr. Gidudu National coordinator FITCA MAAIF Mr. Ochaya National coordinator FIEFOC MAAIF Mr. George Otim M&E MAAIF Mr. Fred Mayanja Senior Economist MAAIF Mr. Boaz Keizire Senior Economist MAAIF Dr. Kauta National coordinator Livestock Disease Control/PACE MAAIF Mrs. Connie Magoma National coordinator VODP MAAIF Masaba Mr. Anthony Ogwang Accountant VODP MAAIF Mr. Nsimbe Bulenga E. National Coordinator Fisheries Development Project MAAIF Eng. Torach National Coordinator Support to Irrigation MAAIF Mr. Muhwezi D National Coordinator Agriculture Marketing and Support MAAIF Beatrice Byarugaba District Production coordinator Mbarara district Margaret Tibayungwa AAMP regional coordinator Mbarara district Dr.Barigye District NLPIP coordinator Mbarara district Katabarwa John Kakoba division NAADS coordinator Mbarara district Bigirwa George Technology Adaptation specialist Mbarara district Dr.Mugisha Ronald District NLPIP Coordinator Kiruhura district Kamwezi Patrick District NAADS coordinator Bushenyi District Dr.Natukunda District NLPIP coordinator Bushenyi District Gordon Tumuhimbise District Coordinator PAF non wage Bushenyi District Tabasibwe Lencie Bitereko sub county NAADS coordinator Bushenyi District Muganzi Francis Ag sub county chief Kyamuhunga Bushenyi District Rwomiguru Richard AAMP coordinator Ryeru sub county Bushenyi District Mr. Byamukama David District commercial Officer Bushenyi district Martin Jacan Gworato Ag CAO Arua Arua district Jimmy Bamuru Production coordinator &District Coordinator NSADP Arua district Caroline Arubaku Agricultural office & coordinator PMA Arua district Dr.Toa Gordon Victor District Veterinary Officer Arua district George Bulea District Fisheries officer Arua district Joachim Andiandu District NAADS coordinator Arua district Anson Draku District Engineer Arua district Shaphan Andeku District Planner Arua district Judith Ruko NUSAF Technical officer Arua district Maliki Draku Assistant CAO Yumbe district Magara Bernard Assistant district engineer Yumbe district John Balisanyuka CAO Nebbi district Tom Ofoyuru District Coordinator NSADP Nebbi district Nyakuni Liverius District production officer Nebbi district Odubker Assa Micro credit specialist Nebbi district George Odongkara Manager Panyimur SACCO Nebbi district Jimmy Mavengini District Engineer Nebbi district Asendu Patrick Assistant CAO Koboko district Wani Nelson Ass. Engineer & Ag coordinator NSADP Koboko district Christopher Ariya District Agricultural officer Koboko district Natana Florence Manager Koboko SACCO Koboko district Nandala Michael CAO Moyo district Ajavu Arabi District Production coordinator Moyo district Ijjo Fred Ag District Engineer Moyo district Habibu Abubaker Ass CAO Adjumani district Masudi Nasur District Commercial officer Adjumani district Dratele Christopher District coordinator NSADP Adjumani district Otema Francis District Engineer Adjumani district

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Kauta Kenneth Assistant CAO Pallisa district Dr. Okot Boddo District Coordinator NLPIP Pallisa district Okiring Patrick District Coordinator VODP Pallisa district David Okurut District Coordinator NAADS Pallisa district Martha Nalapa District Coordinator FITCA Pallisa district Otimong Moses Ass. CAO in charge of NUSAF Pallisa district Hamba Ismail Ali Ag. District engineer Butalejja district Obuk Stephen In charge of machinery at Doho Irrigation scheme Butalejja district Sabura Wilberforce Production manager Doho Irrigation scheme Butalejja district Peter Ayo Agric officer & coordinator VODP Mbale district Paul Mwambu District NAADS coordinator Mbale district Walyamboga Francis District Fisheries officer Mbale district Okware Patrick District Coordinator FIEFOC Tororo district Nkwanga Patrick District Fisheries officer Tororo district Senero Eva District Production coordinator Tororo district Opolot Egos District Commercial officer Tororo district Asinde Anna District Coordinator FITCA Tororo district Lutaya Joseph District Entomologist Tororo district Nkunge District Veterinary officer Tororo district Ngobi Aggrey CAO Busia district Henry Makanga District Fisheries Officer Busia district Philip Adome Beneficiary fish farming Busia district Wanyenze Gmegoi CAO Soroti district Willy Oketta Wilson District Production coordinator Soroti district Charles District Coordinator VODP & FIEFOC Soroti district Dr. Ejulu Wilson District Coordinator NLPIP Soroti district Ochieng Adrew Site Foreman , Maraize Ltd Arua district Musimenta Fred Site Foreman , Puine IK contractors Arua district Ondima Sunday Sub-county chief, Offoka Arua district Matua Elijah Sub-county chief, Uleppi Arua district Tusiime Robert Site foreman, Biosca contractors Yumbe district Katandi samuel Site foreman , Lodonga market, kol services Yumbe district Pario Lawrence Senior Engineer Arua Ahimbisimbwe Nathan A/cao Nebbi Osinde Henry Site Engineer, Nyaravur market Nebbi Urwinya Frank Manager, Nyaravur SACCO Nebbi Kiyingi Richard Site Engineer, Zeu DFI Nebbi Abele Moro E Personnel officer Koboko Aluma Twalib LC III, chairman Lobule s/c Koboko Faidah Marylyn s/c chief, Lobule Koboko Kiiza Busingye Site engineer, Agosusus Adjumani Mukunya Joshua Assistant Fisheries officer Mbale Felix Esoku CAO Tororo Bike Muhamad Foreman, Majanji landing site Busia Srinivas v Civil Engineer, Majanji landing site Busia Majimbo Rehema Treasurer, Majanji BMU Busia Babi moses Sub county NAADS coordinator Rwanyamahemba Mbarara Dr. Senyonga NAADS coordinator Kiruhura Mbangire Harriet Farmer, Rwanyamahemba Mbarara Bagaise John Farmer, Rwanyamahemba Mbarara Katubishwa Z Farmer, Kazo Mbarara Nyabahema R Farmer Mbarara Kashokozi A Farmer, Kyamuhunga Mbarara Butamanya L Farmer , Kyamuhunga Mbarara Mworozi Abel Farmer, Kyamuhunga Mbarara Charles Muti Production officer Kiruhura Kato moses s/c NAADS coordinator, Kazo Kiruhura Fred Kakuru s/c chief , Kazo Kiruhura 153 Economic Policy Research Centre (EPRC)

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Dr. Ojodina malipax s/c NAADS coordinator, Kyamuhunga Mbarara Dr. Muhumuza Francis Production coordinator Bushenyi Tibasibwa Lencie s/c NAADS coordinator , Bitereko Bushenyi Mangeni Richard Fisheries officer, Majanji Busia Juma Benson Majanji , BMU Busia Mr.Kiwolu M&E, NWADP MAAIF Kabagambire Dezi Farmer, Nyakayojo Mbarara Fransica Rwakishaija Farmer-parish coordinator, katojo Mbarara Mary John Rwakishaija Farmer Mbarara Mugisha F. Farmer , Bugashi parish Mbarara Rugamba Lauben Farmer, Mbarara Kasozi, Godfrey Lubaya 2, farmer Mbarara Ms. Lauben T Farmer Mbarara Turisingira Keren Farmer Mbarara Bagiga John Farmer, Kachere parish Mbarara Lwazajje Deo farmer Kiruhura Tabasimbwa Lencie Farmer Bushenyi MS kantereine Feredasi Farmer Bushenyi Bagambana macarion farmer Bushenyi Iga August Farmer Bushenyi Nuwamanya D Farmer Bushenyi Nyekundire group Farmers group Bushenyi Alchangelo Kashokozi farmer Bushenyi Kabagambe G Farmer Bushenyi Mworozi Abel farmer Bushenyi Butamanja Laban Farmer , Kyamuhunga Bushenyi Rwomwiguru Richard Coordinator AAMP, Rweru Bushenyi Perez Kakumu District forest officer Bushenyi Asendu Patrick A/CAO Koboko Wani Nelson Engineer Koboko Osinde Aggrey Production coordinator Budaka Nalapa Entomologist Pallisa Ndyabahena Richard Omukibale village, farmer Bushenyi

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Annex 2: Monitoring and evaluation of activities under North West Agricultural Development Project A) Roads and Bridges

ADJUMANI Contract Sum (Ushs) (VAT excl) Commence Completion Date Percentage Progress (%) Contract No Contract Name Contractor Original Varied Date Original Extended Physical Time Financial 1 NSADP/ADJ/01 Rehabilitation of Tete-Ogolo-Liri A.B. Construction Ltd of 462,181,390 14-Nov-06 13-Mar-07 13-Jul-08 60 400 64 Community Access Road(13.0 Km) in P.O.Box 139, Kitgum Adjumani District

2 NSADP/ADJ/02 Rehabilitation of Community Access Malt (U) Ltd of P.O.Box 917,783,662 18-Dec-06 17-Jun-07 17-Oct-08 85 250 77 Roads: Okusijoni-Gulinya (8 km), Odu- 26002, Kampala Kwoma-Kolididi (6.5km) and Obilokongo-Moinya-Ayiri (12.4km) in Adjumani District

3 NSADP/ADJ/03 Rehabilitation of Community Access United Building Services 359,182,569 412,218,274 5-Dec-06 04-Apr-07 4-Aug-08 80 375 78 Roads:Pakele Ibibiaworo (8km) and Limited, P.O.Box 360, Olia-Jurumini (3.7km) in Adjumani Luwero District

4 NSADP/ADJ/04 Construction of Moinya Bridge on A.B. Construction Ltd of 195,980,125 331,619,500 14-Nov-06 13-Mar-07 13-Nov-08 50 400 98 Obilokongo-Moinya-Ayiri Road in P.O.Box 139, Kitgum Adjumani Road Sub Total/Average 1,935,127,746 743,837,774 69 356 79

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ARUA Contract Sum (Ushs) (VAT excl) Commence Completion Date Percentage Progress (%) Contract No Contract Name Contractor Original Varied Date Original Extended Physical Time Financial 1 NSADP/ARUA/05 Rehabilitation of Community Access Mulowooza and Brothers 772,330,900 14-Nov-06 13-Mar-07 13-Jul-08 90 400 77 Roads: Nyadri-Tara (14.4km) and Ltd of P.O.Box 1992, Arivu-Jayia-Opia 10.6 (km) in Arua Kampala District

2 NSADP/ARUA/06 Rehabilitation of Community Access Dahatse Engineering 643,351,082 14-Nov-06 13-May-07 13-Sep-08 55 270 67 Roads: Keri-Pamodo(14.1km) and Enterprises Ltd of Lorujo-deku-Nyai (14.9km) P.O.Box 2797, Kampala

3 NSADP/ARUA/07 Construction of Katu bridge on Lurujo- Byiringiro Building 486,310,000 558,240,000 14-Nov-06 13-Apr-07 13-Aug-08 70 320 72 Nyai road and Odoma bridge on Orivu- Services Ltd of P.O.Box Jayia-Opia road in Arua District 8345, Kampala

Sub Total/Average 1,901,991,982 558,240,000 72 330 72

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MOYO Contract Sum (Ushs) (VAT excl) Commence Completion Date Percentage Progress (%) Contract No Contract Name Contractor Original Varied Date Original Extended Physical Time Financial 1 NSADP/MOYO/08 Rehabilitation of Community Access Inter Disciplinary 670,812,120 769,938,160 14-Nov-06 13-Mar-07 13-Jul-08 75 400 46 Roads: Afogi-Lere(7km) and Murerea- Technical Ltd of P.O.Box Kali (12km) in Moyo District 539, Lira

2 NSADP/MOYO/09 Rehabilitation of Community Access Mulowooza and Brothers 626,482,440 14-Nov-06 13-Mar-07 60 400 62 Roads:Ubi North - Arra (13km) and Ltd of P.O.Box 1992, Padiga - Airo-Logoba (12km) in Moyo Kampala District

3 NSADP/MOYO/10 Rehabilitation of Gborokonyo-Waka Ambitious Construction 322,840,091 367,125,384 14-Nov-06 13-Mar-07 13-Jul-08 70 400 72 Community Access Road (7km) in Company Ltd of P.O.Box Moyo District 12452, Kampala

4 NSADP/MOYO/11 Construction of Era bridge on Afogi- Azu Properties Ltd of 376,404,287 14-Nov-06 13-Apr-07 13-Aug-08 90 320 93 Lere Road and Ubi bridge on Ubi North- P.O.Box 12421, Kampala Arra Road in Moyo District

5 NSADP/MOYO/18 Construction of Leya 1 and Leya 2 Dynamic Engineering 435,613,750 481,262,500 14-Nov-06 13-Apr-07 13-Aug-08 80 320 89 bridges on Lefori-Murerea-Kali road in Services Ltd of P.O.Box Moyo District 23147, Kampala

5 NSADP/MOYO/19 Construction of Airo Bridge, Otrakwe Spider Contractors 562,315,050 14-Nov-06 13-May-07 13-Sep-08 97 130 98 Bridge and Mulagu Bridge on Padiga- Limited of P.O.Box Airo-Logoba Road in Moyo District 72072, Kampala

Sub Total/Average 2,994,467,738 1,618,326,044 79 328 77

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MOYO Contract Sum (Ushs) (VAT excl) Commence Completion Date Percentage Progress (%) Contract No Contract Name Contractor Original Varied Date Original Extended Physical Time Financial 1 NSADP/MOYO/08 Rehabilitation of Community Access Inter Disciplinary 670,812,120 769,938,160 14-Nov-06 13-Mar-07 13-Jul-08 75 400 46 Roads: Afogi-Lere(7km) and Murerea- Technical Ltd of P.O.Box Kali (12km) in Moyo District 539, Lira

2 NSADP/MOYO/09 Rehabilitation of Community Access Mulowooza and Brothers 626,482,440 14-Nov-06 13-Mar-07 60 400 62 Roads:Ubi North - Arra (13km) and Ltd of P.O.Box 1992, Padiga - Airo-Logoba (12km) in Moyo Kampala District

3 NSADP/MOYO/10 Rehabilitation of Gborokonyo-Waka Ambitious Construction 322,840,091 367,125,384 14-Nov-06 13-Mar-07 13-Jul-08 70 400 72 Community Access Road (7km) in Company Ltd of P.O.Box Moyo District 12452, Kampala

4 NSADP/MOYO/11 Construction of Era bridge on Afogi- Azu Properties Ltd of 376,404,287 14-Nov-06 13-Apr-07 13-Aug-08 90 320 93 Lere Road and Ubi bridge on Ubi North- P.O.Box 12421, Kampala Arra Road in Moyo District

5 NSADP/MOYO/18 Construction of Leya 1 and Leya 2 Dynamic Engineering 435,613,750 481,262,500 14-Nov-06 13-Apr-07 13-Aug-08 80 320 89 bridges on Lefori-Murerea-Kali road in Services Ltd of P.O.Box Moyo District 23147, Kampala

5 NSADP/MOYO/19 Construction of Airo Bridge, Otrakwe Spider Contractors 562,315,050 14-Nov-06 13-May-07 13-Sep-08 97 130 98 Bridge and Mulagu Bridge on Padiga- Limited of P.O.Box Airo-Logoba Road in Moyo District 72072, Kampala

Sub Total/Average 2,994,467,738 1,618,326,044 79 328 77

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NEBBI Contract Sum (Ushs) (VAT excl) Commence Completion Date Percentage Progress(%) Contract No Contract Name Contractor Original Varied Date Original Extended Physical Time Financial 1 NSADP/NEBBI/12 Rehabilitation of Community Access Mogen Enterprises Ltd of 432,875,520 496,632,816 14-Nov-06 13-Mar-07 13-Jul-08 60 400 62 Roads: Aberi-Zombo (16km) and P.O.Box 720, Tororo Omua-Alangi (6.8km) in Nebbi District

2 NSADP/NEBBI/13 Rehabilitation of Alego-Boro progressive Building and 317,103,864 05-Dec-06 04-Apr-07 04-Sept-07 100 275 95 Community Access Road (14.7km) in Civil Engineering Nebbi District Contractors Ltd Kampala

3 NSADP/NEBBI/14 Construction of Ojong 1 bridge, Ojong 2 Rukooge Enterprises (U) 591,382,059 14-Nov-06 13-May-07 13-sep-08 85 270 87 bridge and Ojong 3 bridge on Aberi- Ltd P.O.Box 456, Zombo road in Nebbi District Kampala

4 NSADP/NEBBI/17 Construction of Omol Bridge on Omua- KG Adubango 209,784,410 14-Nov-06 13-Mar-07 13-Jul-08 90 400 86 Alangi road in Nebbi District Construction & Engineering Works Ltd of P.O.Box 84, Nebbi

Sub Total/Average 1,551,145,853 496,632,816 84 336 83

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YUMBE Contract Sum (Ushs) (VAT excl) Commence Completion Date Percentage Progress (%) Contract No Contract Name Contractor Original Varied Date Original Extended Physical Time Financial 1 NSADP/YUMBE/15 Rehabilitation of Community Access Dach Engineering 294,812,157 14-Nov-06 13-Mar-07 13-Jun-07 100 160 100 Roads Mongoya-Oya (7.3km) and Limited of P.O.Box 950, Majale-Kilaji (3.5km) in Yumbe District Arua

2 NSADP/YUMBE/16 Construction of Aya Bridge in Spider Contractors 360,052,000 14-Nov-06 13-Apr-07 13-Aug-08 97 160 98 Mongoya-Oya Road and Kilaji Bridge Limited of P.O.Box on Majale-Kilaji Road in Yumbe 72072, Kampala District

Sub Total/Average 654,864,157 0 99 160 99 Grand Total/Average 9,037,597,476 3,417,036,634 80 302 82

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D) Market Construction (22 no)

Contract Sum (Ushs) (VAT excl) Commence Completion Date Percentage Progress (%) Contract No Contract Name Contractor Original Varied Date Original Extended Physical Time Financial 1 MKT/AP/01 Construction of Adjumani Town Council Kadam Suppliers and 1,213,928,472 22-Jun-07 21-Nov-07 60 250 79 and Pakelle markets in Adjumani Contractors Ltd, District P.O.Box 73, Kampala

2 MKT/OO/02 Construction of Ofua and Ogususu Roja Uganda Ltd, 1,056,528,396 30-Jun-07 29-Nov-07 90 250 87 markets in Adjumani District P.O.Box 7429, Kampala 3 MKT/D/ADJ/03 Construction of Dzaip market in Kamukaro General 643,977,844 22-Jun-07 21-Nov-07 40 250 49 Adjumani District Contractors Ltd, P.O. Box 88, Kamuli

4 MKT/ER/ARUA/04 Construction of Ejupala and Rhino Marez Services 1,322,748,388 22-Jun-07 21-Nov-07 45 250 45 Camp markets in Arua District Company Ltd, P.O.Box 27263, Kampala, Uganda

5 MKT/KN/ARUA/05 Construction of Kubala and Nyadri Prime IK Ltd of 1,420,075,226 22-Jun-07 21-Nov-07 50 250 47 markets in Arua District P.O.Box 33831, Kampala, Uganda 6 MKT/K/KOB/06 Construction of Keri market in Koboko Shepherds Services 582,003,981 22-Jun-07 21-Nov-07 50 250 59 District Ltd, P.O.Box 1132, Kampala, Uganda

7 MKT/AM/MOYO/07 Construction of Afogi and Metu markets Dynamic Engineering 1,286,471,186 12-Jul-07 11-Dec-07 70 250 80 in Moyo District Services Ltd, P.O.Box 431, Lira, Uganda

8 MKT/A/MOYO/08 Construction of Abongi market in Moyo Dankik Enterprises 664,007,699 22-Jun-07 21-Nov-07 80 250 68 District Ltd, P.O.Box 40, Bugiri, Uganda

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9 MKT/L/MOYO/09 Construction of Laropi market in Moyo Techno Three Uganda 606,915,048 22-Jun-07 21-Nov-07 70 250 57 District Ltd, P.O.Box 4778, Kampala, Uganda

10 MKT/L/MOYO/10 Construction of Lefori market in Moyo Inter Disciplinary 614,861,305 22-Jun-07 21-Nov-07 70 250 80 District Technical Ltd, P.O.Box 539, Lira 11 MKT/AM/NBB/11 Construction of Alangi and Marr Pioneer Construction 1,105,430,865 18-Feb-08 17-Jul-08 55 100 66 markets in Nebbi District Company, P.O.Box 21160, Kampala, Uganda

12 MKT/EN/NBB/12 Construction of Erusi and Nyaravur Ochoda Enterprises 1,238,399,664 22-Jun-07 21-Nov-07 70 250 46 markets in Nebbi District Ltd, P.O.Box 962, Tororo, Uganda

13 MKT/E/NBB/13 Construction of Panyimur market in Buyela Building 633,877,465 22-Jun-07 21-Nov-07 60 250 59 Nebbi District Contractors Ltd, P.O.Box 20052, Kampala, Uganda

14 MKT/L/YBE/14 Construction of Lodonga market in Kol Services Ltd, 619,490,892 22-Jun-07 21-Nov-07 65 250 70 Yumbe District P.O.Box 50041, Kampala, Uganda 15 MKT/M/YBE/15 Construction of Merwa market in Mussad Uganda Ltd, 607,633,314 22-Jun-07 21-Nov-07 65 250 87 Yumbe District P.O.Box 27148, Kampala, Uganda

Sub Total D (Markets Construction) 13,616,349,745 13,616,349,745 63 240 65

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B) DFI Construction (2no) Contract Sum (Ushs) (VAT excl) Commence Completion Date Percentage Progress (%) Contract No Contract Name Contractor Original Varied Date Original Extended Physical Time Financial 1 DFI/NBB/ZEU/01 Construction of District Armpass Technical 2,235,693,343 5-Dec-06 4-Aug-07 85 200 55 Farm Institute Buildings Services Ltd, P.O.Box and access roads at Zeu in 786, Kampala Nebbi District

2 DFI/ADJ/OLIA/02 Construction of District Alpha-Global 21st Joint 1,995,850,445 5-Dec-06 4-Aug-07 80 200 76 Farm Institute Buildings Venture Ltd, P.O.Box and Access roads at Olia 9538, Kampala in Adjumani District

Sub Total B (DFI Construction) 4,231,543,788 4,231,543,788 83 200 66

C) DFI Rehabilitation (2no) Contract Sum (Ushs) (VAT excl) Commence Completion Date Percentage Progress (%) Contract No Contract Name Contractor Original Varied Date Original Extended Physical Time Financial 1 DFI/ARUA Rehabilitation of General Construction 623,385,146 697,309,920 30-Jun-07 29-Nov-07 90 250 85 Agriculture Research and and Maintenance Development Centre Company Ltd, P.O.Box Buildings at Abi in Arua 70933, Kampala District

2 DFI/MOYO Rehabilitation of Moyo Jami Construction 470,142,635 519,858,518 30-Jun-07 29-Nov-07 95 200 96 District Farm Institute Company Ltd, P.O.Box Buildings in Moyo District 2359, Kampala

Sub-Total (DFI Rehabilitation) 1,093,527,781 1,217,168,438 93 225 91

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E) Water Supply and Sanitation

Contract Sum (Ushs) (VAT excl) Commence Completion Date Percentage Progress (%) Contract No Contract Name Contractor Original Varied Date Original Extended Physical Time Financial Borehole Drilling 1 NSADP/BH/09 Drilling of Boreholes in Markets and Sumadhura 179,238,425 193,773,000 18-Aug-06 17-Dec-06 100 100 100 District Farm Institutes in Northwest Technologies Ltd, Uganda P.O.Box 1225, Kampala

Water Supply Systems 1 WS/OPA/ADJ/01 Construction of Olia DFI Water Supply Kaseegu Technical 252,116,287 01-Feb-08 31-May-08 50 100 52 System in Adjumani District Services Ltd, P.O.Box 12651, Kampala

2 WS/KN/ARU/02 Construction/extension of Kubala and Construction 295,227,215 01-Feb-08 31-May-08 50 100 54 Nyadri markets water supply systems in Component Solutions Arua District Ltd, P.O.Box 70933

3 WS/AZ/NBB/03 Construction of Alangi market and Zeu Tabula Contractors Ltd, 440,332,809 01-Feb-08 31-May-08 50 100 53 DFI water supply systems in Nebbi P.O.Box 2971, Kampala District 4 WS/E/N/BB/04 Construction of Erusi market water Near Construction 296,223,296 18-Feb-08 17-Jun-08 60 100 53 supply system in Nebbi District Company Ltd, P.O.Box 1335, Mbarara

5 WS/O/MOY/05 Construction of Obongi market water Spider Contractors Ltd, 337,371,804 01-Feb-08 31-May-08 30 100 47 supply system in Moyo District P.O.Box 70419, Nsambya 6 WS/L/YBE/06 Construction of Lodonga market water Biosca Consultants Ltd, 328,597,500 01-Feb-08 31-May-08 90 100 85 supply system in Yumbe P.O.Box 197, Kabale

Total Water Supply Systems 6 contracts 1,949,868,911 1,964,403,486 57 Sub-Total E (Water supply and Sanitation) 2,129,107,336 2,158,176,486 61 GRAND-TOTAL 30,108,127,128 30,774,259,395

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Annex 3: Procurement of goods and services under MAAIF for FY 2005-2006 Procurement Reference Description of the Catego Method Supplier Amount User Contra Location Sourc Number Procurement ry ct e of Period fundi ng 1 PR:0147/GDS/Cocoa /05-06 Supply of cocoa GDS Direct College public 9,228,490.00 Cocoa May 06 Entebbe GoU seedling limited 2 PR : 0068/GDS/Cocoa/05-06 Supply of cocoa GDS Direct Several providers 293,000,000.00 Cocoa Dec 05 Kampala GoU seedling 3 PR: 0097/GDS/Cocoa/05-06 Supply of cocoa GDS Direct Several providers 400,000,000.00 Cocoa Jan 06 Kampala GoU seedling 4 PR: 0195/GDS/Cocoa/05-06 Supply of cocoa GDS Direct Various producers- 560,000,100.00 Cocoa Jun 06 Entebbe GoU seedling farmers 5 PR: 0125/SRVCS/CPD/05-06 Printing of SRVCS Direct Uganda printing 11,210,000.00 CPD Jan 06 Entebbe GoU phytosanilary and publishing Certificates corporation 6 PR:0126/SRVCS/ERT/05-06 Advertising by the SRVCS Direct Industrial review 7,680,000.00 ERT Jan 06 Entebbe WB global wide publisher magazine magazine 7 PR:0109/SRVCS/ERT/05-06 Publication of an article SRVCS Direct New vision news 9,655,500.00 ERT Dec 05 Kampala WB paper 8 PR:0129/SRVCS/ERT/05-06 Printing service SRVCS Direct MPK Graphics 18,372,600.00 ERT May 06 Entebbe WB limited 9 PR:0113/SRVCS/ERT/05-06 Infrastructure magazine SRVCS Direct Transafrica 13,806,000.00 ERT Mar 06 Kampala WB publishers ltd 10 PR:0111/SRVCS/FDP/05-06 Advertisements SRVCS Direct New vision & 3,000,000.00 FDP Dec 05 Entebbe ADB monitor Newspapers 11 PR:0070/SRVCS/CS/DFR/05-06 Printing of health SRVCS Direct Uganda printing & 16,500,000.00 FDP Dec 05 Entebbe ADB department of FDR publishing corporation 12 PR:0114/SRVCS/DFR/05-06 Printing of Aquaculture SRVCS Direct Uganda printing & 8,000,000.00 FDP Dec 05 Kampala ADB certificate publishing corporation

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13 PR:0214/GDS/LHE/05-06 Vaccine supply –FMD GDS Direct Cooper Uganda 324,225,000.00 LHE Jun 06 Entebbe GoU limited 14 PR: 0186/GDS/LHE/05-06 Vaccine supply –FMD GDS Direct Cooper Uganda 432,300,000.00 LHE April 06 Entebbe GoU limited 15 PR:0189/GDS/NSADP/05-06 Service contract for the GDS Direct Option Ltd 4,380000.00 NSADP Jun 06 Entebbe ADB photocopier 16 PR:0016/SRVCS/NSADP/05-06 Servicing of SRVCS Direct MFI Office solution 950,000.00 NSADP Nov 06 Entebbe ADB photocopier ltd 17 PR:0040(b)/GDS/VODP/05-06 Repair of project GDS Direct TATA (U) LTD 350,000,000.00 NSADP Sept 05 Project ADB vehicle (Tata pick ups ) district 18 PR:0025/GDS/Cocoa/05-06 Supply of cocoa GDS Direct Uganda seed oil 73,140,000.00 VODP Dec 05 North+East IFAD seedling procure & processors 19 PR:0154/GDS/ VODP/05-06 Sunflower seeds for SRVCS Direct Uganda seed oil 89,040,000.00 VODP Mar 06 North+East IFAD VODP procures & processors 20 PR:0081/SRVCS/VODP/05-06 Office Accommodation SRVCS Direct Jokassa house T/A 190,080,000.00 VODP Feb 06 Kampala IFAD john Rwabuya off Acomodn TOTAL (SHSLLINGS) 2,814,477,690.00

21 PR: 0062/GDS/LHE/05-06 Supply of deitamethrin GDS Direct Cooper Uganda Euros 48,000.00 LHE Aug 05 Entebbe GoU 20% limited, A/C Appropriate Applns 22 PR:0076/GDS/VEMP/05-06 Supply of laboratory GDS Direct Palin diagnostics GBP:1,437.39 LVEMP Nov 05 Entebbe WB chemicals Ug Ltd 23 PR: 0116/GDS/LVP/05-06 Additional units of a GDS Direct Kampala Nissan USD.52,696.00 LVEMP Mar 06 Entebbe WB wheel drive pick ups

1 PR:0052/WRKS/EUREP- Construction of WRKS Open M /S. Roja 1,311,714,231.00 CPD Oct 06 Namalere GoU GAP/05-06 pesticide laboratory at tender Construction Ltd Namalere 2 PR:0022a/GDS/NLPIP/05-06 Office equipment and GDS Open Roko Technical 15,604,600.00 NLPIP Jul 06 Entebbe ADB furniture tender service

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limited 3 PR:0016b/GDS/NLPIP/05-06 Pasture seed, pesticide GDS Open Several – El shadai, 241,175,672.00 NLPIP Dec 05 Entebbe ADB and fertilizer tender farm engineering etc 4 PR: OO32/GDS/NLPIP/05-06 Supply of cattle and GDS RFQ Several providers 3,000,000,000.00 NLPIP Aug 05 Entebbe ADB goats for restocking 5 PR:0145/WRKS/NSADP/05-06 Construction of bridge WRKS Open A.B. construction td 195,980,125.00 NSADP Jun 06 adjumani ADB and roads tender 5 PR:0145/WRKS/NSADP/05 Construction of bridge WRKS Open K.G. Adubango 209,784,410.00 NSADP Jun 06 Yumbe ADB and roads tender construction and engineering works 5 PR:0145/WRKS/NSADP/05 Construction of bridge WRKS Open Dach engineering 294,812,569.00 NSADP Jun 06 Yumbe ADB and roads tender limited 5 PR:0145/WRKS/NSADP/05 Construction of bridge WRKS Open Progressive 317,103,864.00 NSADP Jun 06 Nebbi ADB and roads tender building + civil engineering contractor 5 PR:0145/WRKS/NSADP/05 Construction of bridge WRKS Open Ambitious 322,840,091.00 NSADP Jun 06 Moyo ADB and roads tender construction Co Ltd 5 PR:0145/WRKS/NSADP/05 Construction of bridge WRKS Open United building 359,182,569.00 NSADP Sept 06 Adjumani ADB and roads tender service 5 PR:0145/WRKS/NSADP/05 Construction of bridge WRKS Open Spider constractors 360,052,000.00 NSADP Jun 06 Yumbe ADB and roads tender limited 5 PR:0145/WRKS/NSADP/05 Construction of bridge WRKS Open Azu properties Ltd 376,404,287.00 NSADP Jun 06 Moyo ADB and roads tender construction Co Ltd 5 PR:0145/WRKS/NSADP/05 Construction of bridge WRKS Open Dynamic 435,613,750.00 NSADP Jun 06 Nebbi ADB and roads tender engineering service 5 PR:0145/WRKS/NSADP/05 Construction of bridge WRKS Open Byiringiro building 486,310,000.00 NSADP Jun 06 Arua ADB and roads tender services 5 PR:0145/WRKS/NSADP/05 Construction of bridge WRKS Open Spider constructors 562,315,050.00 NSADP Jun 06 Moyo ADB and roads tender Ltd 5 PR:0145/WRKS/NSADP/05 Construction of bridge WRKS Open Rukooge enterprise 591,382,059.00 NSADP Jun 06 Nebbi ADB and roads tender Ltd 5 PR:0145/WRKS/NSADP/05 Construction of bridge WRKS Open Mulowooza & 626,483,440.00 NSADP Jun 06 Moyo ADB

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and roads tender brothers Ltd 5 PR:0145/WRKS/NSADP/05 Construction of bridge WRKS Open Dahatse engineering 643,351,082.00 NSADP Jun 06 Arua ADB and roads tender enterprise 5 PR:0145/WRKS/NSADP/05 Construction of bridge WRKS Open Interdisciplinary 670,812,,120.00 NSADP Jun 06 Moyo ADB and roads tender technical Ltd 5 PR:0145/WRKS/NSADP/05 Construction of bridge WRKS Open Mulowooza and 772,330,900.00 NSADP Jun 06 Arua ADB and roads tender brothers Ltd 5 PR:0145/WRKS/NSADP/05-06 Construction of bridge WRKS Open Mogen enterprise 432,875,520.00 NSADP Jun 06 Nebbi ADB and roads tender Ltd 5 PR:0145/WRKS/NASDP/05-06 Construction of bridge WRKS Open Malt (u) Ltd 917,783,662.00 NSADP Jun 06 Adjumani ADB and roads tender 6 PR:0166/WRKS/NSADP/05-06 Drilling of bore hole WRKS Open Sumadhura 211,501,341.00 NSADP Aug 06 Project ADB tender technologies district 7 PR:0187/WRKS/NSADP/05-06 Construction of DFIs in WRKS Open Alpha –global 21st 2,355,103,525.00 NSADP Nov 06 Adjumani ADB Adjumani district tender JV 7 PR:0187/WRKS/NSADP/05-06 Construction of DFIs WRKS Open Armpass technical 2,638,118,145.00 NSADP Nov 06 Arua ADB in Nebbi district tender service Ltd 3 PR:0080/GDS/SIDPP/05-06 Tractor and implements GDS Open Engineering 93,000,000 SIDP Dec 06 Entebbe GoU tender solutions Ltd 2 PR:0148/SRVCS/VODP/05-06 Consultancy services – SRVCS Open Bergen consult Ug 92,972,000.00 VODP Jul 06 Entebbe IFAD impact study tender Ltd 4 PR:0074/GDS/VODP/05-06 Supply of vehicle GDS Open Victoria motors Ltd 471,000,000.00 VODP Aug 06 Kampala IFAD tender 8 PR:0040(a)/GDS/VODP/05-06 Supply of road GDS Open Various –Pan 2,095,113,326.00 VODP Sept 06 Kampala IFAD equipment tender Africa, Rhino,jos , hassens + victoria 14 PR:0035/SRVCS/FDP/05-06 Rehabilitation of fish GDS Open Kamulegeya 289,807.00 FDP Jun 05 Entebbe ADB institute Kajjansi tender +associates 16 PR:0034/SRVCS/FDR/05-06 Consultancy service- SRVCS Open MBW consulting 1,465,185.00 FDP Nov 05 Entebbe ADB fish landing sites tender engineers 21 PR:0094/GDS/FDR/05-06 Addendum on the SRVCS Open Sinnautic 3,500,303.191 FDP Apr 06 Entebbe ADB supply of patrol boats tender international limited 12 PR:0050/GDS/NLPIP/05-06 Vaccines-FMD, ECF, GDS Open Cooper Uganda 353,000.00 LHE Dec 05 Entebbe GoU Lumpy skin etc. tender limited 15 PR: 0065/GDS/LHE/05-06 Vaccine – foot and GDS Open Cooper (u) limited 250,000.00 LHE Nov 05 Entebbe GoU

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mouth disease tender 18 PR:0045/SRVCVS/NLPIP/05-06 Consultancy service – GDS Open GRM international 300,150,00 NLPIP Jan 07 Entebbe ADB Technical Advisor tender BV 19 PR:0036/GDS/NLPIP05-06 Supply of 148 motor SRVCS Open Kampala Nissan 373,552.00 NLPIP Jun 06 Entebbe ADB cycles tender limited –Lot C 10 PR:0001/GDS/VODP/05-06 Laboratory equipment GDS Open Franana 273,199.19 VODP Dec 05 Kampala IFAD tender international limited 11 PR:0024/GDS/VODP/05-06 Survey equipment GDS Open Turlgye 26,000.00 VODP Dec 05 Kalangala IFAD tender Establishment 17 PR:0037/GDS/VODP/05-06 7 motor cycles for GDS Open Kampala Nissan 25,410.00 VODP Dec 06 Entebbe IFAD VODP tender Ltd TOTAL DOLLARS 5,914,600.19 1 PR:0118/GDS/DEWS/05-06 Supply of office GDS Restricted Raps Uganda 39,858,000.00 DEWS Mar 06 Entebbe GoU equipment limited 2 PR:0211/SRVCS/DEWs/05-06 Printing service GDS Restricted Nkugobe Enterprise 45,000,000.00 DEWS Jun 06 Entebbe GoU Ltd 3 PR:0135/GDS/DEWs/05-06 Supply of motor vehicle GDS Restricted Victoria motors 120,000,000.00 DEWS Entebbe GoU limited 4 PR:0130/WRKS/LHE/05-06 Advertisement in SRVC Restricted MAAIF Directory 6,000,000.00 ERT Jan 06 Entebbe WB directory 5 PR:0138/GDS/PDU/05-06 Procurement of GDS Restricted Kazinga channel 19,999,820.00 F+A Mar 06 Entebbe GoU photocopier office world limited 6 PR:0184/GDS/F+A/05-06 Supply of stationary GDS Restricted Victoria motors 86,332,717.00 F+A May 06 Entebbe GoU wagon for PS limited 7 PR:0017/WRS/FDP/05-06 Office drive away at WRKS Restricted Multiplex Uganda 150,000,000.00 FDP May 06 Jinja ADB Jinja limited 8 PR:0130/WRKS/LHE/05-06 Refurbishment of in WRKS Restricted Build trust 661,000,000.00 LHE Dec 06 Tororo GoU sectary LIRI construction Co Ltd 9 PR:0012/GDS/LVEMP/05-06 Water pump for water GDS Restricted Benefit worldwide 46,219,998.00 LVEMP Oct 06 Entebbe WB hyacinth component limited 10 PR:0163/SRVCS/NLPIP/05-06 Printing of VET SRVCS Restricted Horizon lines 78,780,000.00 NLPIP May 06 Entebbe ADB awareness posters limited 60,000 copies 11 PR:0139/SRVCS/NLPIP/05-06 Radio broadcasts SRVCS Restricted Various radios 115,000,000.00 NLPIP Jun 06 Entebbe ADB West VoT,

169 Economic Policy Research Centre (EPRC) Uganda Public Expenditure Review Phase 3

UBC,CBS 12 PR:0175/SRVCS/NSADP/05-06 Consult to carry out SRVCS Restricted Mr. Obara Andrew 29,910,000.00 NSADP Oct 06 Project ADB micro credit component districts 13 PR:0015/SRVCS/NSADP/05-06 Radio messages SRVCS Restricted Various – Paidha, 66,000,000.00 NSADP Project ADB restricted Pacis, Arua 1 etc districts 14 PR:0124/WRKS/NSADP/05-06 Rehabilitation of Abii WRKS Restricted K.G Adubango 122,695,968.00 NSADP Jul 06 Arua ADB ARDC Arua construction + Engineering works 15 PR:0072/GDS/LHE/05-06 Supply of CBPP GDS Restricted M/s cooper (u) Ltd 100,000,000.00 PACE Feb 06 Entebbe GoU vaccine 16 PR:0051/SRCS/PMA/05-06 Extension of contracts SRVCS Restricted Cooper Uganda Ltd 173,000.00 PMA Dec 05 Entebbe GoU of CIT inner team consultant 17 PR:0115/GDS/SID/05-06 4 WD Double cabin GDS Restricted Go Nissan Ltd 243,959,607.00 SIDP Jun 06 Entebbe GoU pick ups 18 PR:0157/GDS/SIP/05-06 Supply of Assorted GDS Restricted Procurement and 64,381,036.00 SIP Jun 06 Entebbe GoU office equipment logistics limited 19 PR:0168/WRKS/SIP/05-06 Revision of scope of WRKS Restricted Uganda kwegala 442,368,296.00 SIP Aug 06 Project GoU work – phase 1 construction Ltd district rehabilitation of DOHO irrigation 20 PR:0003/GDS/SME/05-06 Motor vehicle -4WD GDS Restricted Kampala Nissan 56,648,969.00 SME Apr 06 Entebbe GoU double cabin pick ups limited 21 PR:0022b/GDS/VODP/05-06 Weather station GDS Restricted Pailn logistics 32,500,000.00 VODP Mar 06 Entebbe IFAD procurement 22 PR:0212/WRKS/VODP/05-06 Office partitioning at WRKS Restricted Pearl shelter 40,862,783.00 VODP Jun 06 Kampala IFAD Jokassa House promoters limited 23 PR:0075/GDS/VODP/05-06 Supply of computers GDS Restricted Raps Uganda Ltd 49,500,000.00 VODP Dec 06 Entebbe IFAD and accessories 24 PR:0197/GDS/VODP/05-06 Motor vehicle tyres GDS Restricted Executive logistics 67,748,800.00 VODP Jun 06 Entebbe IFAD limited TOTAL IN SHSLLINGS 2,684,938,994.00 27 PR:0088/GDS/LHE/05-06 Supply of 4 WD double GDS Restricted Go Nissan limited 3,820,160.00 LHE Mar 06 Entebbe GoU cabin pick up 26 PR:0000/GDS/NSADP/06-07 4 WD motor vehicle GDS Restricted Victoria motors Ltd 3,657,030.00 NSADP Nov 06 Entebbe ADB

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TOTAL IN JP YEN 7,477,1290.00 28 PR:0013/GDS/NSADP/05-06 Radio and mobile film GDS Restricted IT solutions Ltd 156,266.15 NSADP Nov 05 Entebbe ADB van for project activities 29 PR:0193/SRVCS/VODP/05-06 Consultancy service for SRVCS Restricted PACE consultants 52,000.00 VODP Jul 06 Kampala IFAD preparation of accounting manual 30 PR:0100/GDS/NSADP/06-07 4 WD motor vehicle GDS Restricted Go Nissan Ltd 326,817.00 NSADP Dec 06 Entebbe ADB L200.No 13 31 PR:0004/GDS/LVEMP/05-06 Motor vehicle 4 WD GDS Restricted Kampala Nissan 126,818.00 LVEMP Nov 05 Entebbe WB double cabin pick up Ltd 33 PR:0049a/SRVCS/NLPIP/05-06 Consultant to design SRVCS Restricted Abraham Oyeyo 15,287.00 NLPIP Oct 05 Entebbe ADB live stock census 34 PR:0049b/SRVCS/NLPIP/05-06 Consultant to design SRVCS Restricted Kom consultant Ltd 538,900.00 NLPIP Dec 05 Entebbe ADB livestock infrastructure design 35 PR:0158/GDS/SIP/05-06 Supply of motor vehicle GDS Restricted Victoria motors Ltd 76,868,640.00 SIP May 06 Not done GoU for project activities 36 PR:0142/GDS/LHE/05-06 Rabbies vaccines GDS Restricted Cooper (u) limited 115,000,000.00 LHE Mar 06 Entebbe GoU TOTAL IN USD 193,084,728.15 1 PR:0108/SRVCS/DEWS/05-06 Arch view soft ware SRVCS RFP Gei-infoand 8,457,768.00 DEWS Jun 06 Entebbe GoU communications limited 2 PR:0058/SRVCS/DEWS/05-06 Advertisements for SRVCS RFP Print media –vision, 13,000,000.00 DEWS Kampala GoU early warning massages monitor, orumuri etop etc 3 PR:0174/SRVCS/ERT/05-06 Publicity awareness of SRVCS RFP Farmers’ voice 6,000,000.00 ERT Jan 06 Entebbe WB for ERT component 4 PR:0039/GDS/ERT/05-06 Printing of brochures SRVCS RFP MPK graphics 17,000,000.00 ERT Dec 05 Entebbe WB for ERT limited 5 PR:0150/SRVCS/ERT/05-06 Printing of brochures of SRVCS RFP MPK graphics 17,000,000.00 ERT Mar 06 Entebbe WB ERT-Agric component limited 6 PR:0134/SRVCS/DFR/05-06 Printing manual SRVCS RFP Ealn graphic limited 10,000,000.00 FDP Jan 06 Entebbe ADB inspection 7 PR:0005/SRVCS/LVEMP/05-06 Printing of health SRVCS RFP Uganda printing 19,965,000.00 LVEMP Oct 05 Entebbe WB

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certificate for fish and publishing inspection corporation 8 PR:0030/SRVCS/NLPIP/05-06 Advertising service for SRVCS RFP New vision and 2,982,000.00 NLPIP Aug 06 Entebbe ADB restocking monitor news papers 9 PR:0162/SRVCS/NSADP/05-06 Advertising for SRVCS RFP New vision and 4,419,000.00 NSADP Mar 06 Entebbe ADB consultant monitor news papers 10 PR:0078/SRVCS/OSRIP/05-06 Guarding service SRVCS RFP Blue fox 3,000,000.00 SIP Sep 05 Olweny GoU swamp 11 PR:0079/SRVCS/OSRIP/05-06 Extension of contracts SRVCS RFP Oyuku mikele 3,000,000.00 SIP Nov 05 Olweny GoU for cleaning swamp TOTAL IN SHSLLIGS 104,823,768.00 12 PR:0033/SRVCS/FDR/05-06 Preparation of SRVCS RFP El-Archs 118,284.00 FDP Nov 05 Entebbe ADB engineering and partnership supervision architects and consultant 13 PR:0179/SRVCS/NLPIP/05-06 Design of livestock SRVCS RFP Arch design Ltd 760,528.29 NLPIP Sep 06 Entebbe ADB watering facilities TOTAL IN USD 878,812.29 1 PR:0137/GDS/DCP/05-06 Helmets for agricultural GDS RFQ Honda (U) Ltd 4,080,000.00 CPD Mar 06 Entebbe GoU inspector 2 PR:0099/GDS/DCP/05-06 Supply of reagents for GDS RFQ Benefit worldwide 10,949,853.00 CPD Dec 05 Entebbe GoU the department Ltd 3 PR:0044/GDS/DCP/05-06 Computer and computer GDS RFQ Technology 17,075,000.00 CPD Dec 05 Entebbe GoU accessories associates Ltd 4 PR:0218/GDS/DCP/05-06 supply of assorted GDS RFQ Hero enterprise Ltd 20,467,274.00 CPD Apr 06 Entebbe GoU stationery 5 PR:0171/GDS/ERT/05-06 supply of office GDS RFQ MFI Office solution 9,897,500.00 ERT Apr 06 Entebbe WB equipment Ltd 6 PR:0150/GDS/PDU/05-06 Computer and computer GDS RFQ Technology 2,352,000.00 F+A Jun 06 Entebbe GoU accessories associates Ltd 7 PR:0117/GDS/F+A/05-06 Supply of tyres for GDS RFQ Arrow centre Ltd 2,600,000.00 F+A Mar 06 Entebbe GoU UG1591A 8 PR:0167/GDS/F+A/05-06 Assorted office GDS RFQ Nashidu trader Ltd 4,440,200.00 F+A Apr 06 Entebbe GoU

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stationery 9 PR:0041/GDS/F+A/05-06 Supply of motor vehicle GDS RFQ Kilimanjaro tyres 5,950,000.00 F+A Oct 05 Entebbe GoU tyres -Bus Ltd 10 PR:0043/GDS/NLPIP/05-06 Supply of data video GDS RFQ Raps Uganda 9,225,000.00 F+A Apr 06 Entebbe GoU projector, VCR and limited screen 11 PR:0055/GDS/F+A/05-06 Assorted office GDS RFQ Gulf Africa (U)Ltd 13,331,100.00 F+A Mar 06 Entebbe GoU stationery 12 PR:0016a/GDS/PDU/05-06 Computer, printer and GDS RFQ Kazinga channel 17,800,000.00 F+A Apr 06 Entebbe GoU computer accessories office world Ltd 13 PR:0146/GDS/LVEMP/05-06 Supply of desk top GDS RFQ MFI Office solution 9,228,490.00 LVEMP Sep 06 Entebbe WB computers Ltd 14 PR:0021/GDS/LVEMP/ 05-06 Computer and computer GDS RFQ Raps Uganda 9,225,000.00 LVEMP Oct 05 Entebbe WB accessories limited 15 PR:0213/GDS/NLPIP/05-06 Laboratory sample GDS RFQ Labomedifam Ltd 4,690,000.00 NLPIP Feb 06 Entebbe ADB collection consumable 16 PR:0127a/GDS/NLPIP/05-06 Ear tags for restocking GDS RFQ Cooper (U) Ltd 12,800,000.00 NLPIP Apr 06 Entebbe ADB animal Goats and Cows 17 PR:0198/GDS/NSADP/05-06 Office furniture GDS RFQ Mullin option Ltd 4,720,000.00 NSADP Jun 06 Entebbe ADB 18 PR:0014/GDS/NSADP/05-06 Laptop and printer for GDS RFQ MFI Office solution 6,184,838.00 NSADP Nov 05 Entebbe ADB the project Ltd 19 PR:0202/GDS/NSADP/05-06 Supply of staff uniform GDS RFQ Kwera Ltd 18,331,300.00 NSADP May 06 Entebbe ADB and protective gear 20 PR:0188/GDS/NSADP/05-06 Supply of office GDS RFQ Raps Uganda 31,485,000.00 NSADP Aug 06 Entebbe ADB equipment and limited computer 21 PR:0199/GDS/NSA/05-06 Supply of office GDS RFQ Raps Uganda 31,485,000.00 NSADP Jun 06 Entebbe ADB equipment limited 22 PR:0048/GDS/PAU/05-06 Computer and computer GDS RFQ Raps Uganda 2,945,000.00 PAU Jun 06 Entebbe GoU accessories limited 23 PR:0156/GDS/SIP/05-06 Supply of office GDS RFQ Mullin options Ltd 16,396,000.00 SIP Apr 06 Entebbe GoU equipment 24 PR:0127b/GDS/SME/05-06 Computer and computer GDS RFQ Raps Uganda 2,500,000.00 SME Entebbe GoU accessories limited 25 PR:0083/GDS/VODP/05-06 Empty container GDS RFQ Process suspended 4,000,000.00 VODP Feb 05 Entebbe IFAD

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26 PR:0077/GDS/VODP/05-06 Oil distiller GDS RFQ Muhavura polysolar 22,095,000.00 VODP Kalangala IFAD system 27 PR:0165/GDS/VODP/05-06 Supply of office GDS RFQ Nile fishing Co Ltd 25,523,400.00 VODP Mar 06 Kampala IFAD generator 28 PR:0110/GDS/VODP/05-06 Ram press GDS RFQ At Uganda Ltd 30,000,000.00 VODP Jan 06 Kampala IFAD 29 PR:0020/GDS/VODP/05-06 Supply of assorted GDS RFQ Benru general 30,635,160.00 VODP Dec 05 Entebbe IFAD stationery enterprises Ltd TOTAL IN UGX GDS RFQ 380,418,115.00 31 PR:0086/GDS/APM/05-06 Diesel engineer power GDS RFQ Saim Kubota 63,360.29 CPD May 06 Entebbe GoU tiller industries Ltd 30 PR:0183/GDS/NLPIP 05-06 Procurement of post GDS RFQ Engineering 7,573.00 NLPIP Mar 06 Entebbe ADB hole bore +finger wheel solutions Ltd rake 32 PR: 0047/GDS/VODP/05-06 Importation of palm oil GDS RFQ Palm oil Uganda 1,110,000.00 VODP Sep 05 Kalangala IFAD seeds for out growers Ltd TOTAL IN DOLLARS 1,180,933.29

Annex 4: Schedule of funds released to the districts by NLPIP, 2006/07

174 Economic Policy Research Centre (EPRC) Uganda Public Expenditure Review Phase 3

TSETSE TICK DISEASE SEED VET WATER RANGELAND DISTRICT RESTOCKING CONTROL CONROL CONTROL PRODUCTION REGULATION TOTAL (000 SHS) ACTIVITIES IMPROVEMENT ACTIVITIES ACTIVITIES ACTIVITIES ACTIVITIES ACTIVITIES

Apac 23,722.30 4,382.30 1,434.00 4,870.00 34,408.60 Bushenyi 12,929.00 4,382.30 1,434.00 4,085.00 22,830.30 Kaberamaido 23,722.30 2,005.30 4,382.30 4,085.00 34,194.90 Kamuli 12,929.00 4,382.30 1,434.00 4,870.00 23,615.30 Kamwenge 12,929.00 4,382.30 1,434.00 4,085.00 22,830.30 Katakwi 32,159.80 2,005.30 4,382.30 1,434.00 4,870.00 44,851.40 Kayunga 12,929.00 4,382.30 1,434.00 4,085.00 22,830.30 Kibaale 12,929.00 2,005.30 4,382.30 4,085.00 23,401.60 Kiboga 12,929.00 4,382.30 62,687.60 6,815.00 86,813.90 Kitgum 23,722.30 2,700.00 2,005.30 4,382.30 4,085.00 36,894.90 Kotido 23,722.30 2,005.30 4,382.30 5,655.00 35,764.90 Kumi 23,722.30 8,729.00 2,005.30 4,382.30 4,870.00 43,708.90 Kyenjojo 12,929.00 4,382.30 1,434.00 4,085.00 22,830.30 Lira 23,722.30 2,005.30 4,382.30 1,434.00 8,385.00 28,396.10 68,325.00 Luwero 12,929.00 4,382.30 62,687.60 7,600.00 87,598.90 Masindi 12,929.00 4,382.30 62,687.60 1,434.00 7,600.00 28,396.10 117,429.00 Mbarara 12,929.00 4,382.30 62,687.60 1,434.00 10,600.00 44,258.60 136,291.50 Moroto 23,722.30 4,382.30 4,085.00 32,189.60 Mpigi 12,929.00 4,382.30 1,434.00 8,245.00 28,396.10 55,386.40 Mubende 12,929.00 4,382.30 7,600.00 24,911.30 Nakapiripirit 23,722.30 4,382.30 4,085.00 32,189.60 Nakasongola 12,929.00 2,005.30 4,382.30 62,687.60 1,434.00 6,815.00 44,258.60 134,511.80 Ntungamo 12,929.00 4,382.30 1,434.00 4,925.00 44,258.60 67,928.90 Pader 23,722.30 2,700.00 2,005.30 4,382.30 4,085.00 36,894.90 Pallisa 23,722.30 8,729.00 2,005.30 4,382.30 1,434.00 9,940.00 50,212.90 Rakai 12,929.00 4,382.30 1,434.00 9,870.00 44,258.60 72,873.90 Sembabule 12,929.00 4,382.30 62,687.60 1,434.00 6,815.00 88,247.90 Sironko 23,722.30 4,382.30 6,815.00 34,919.60 Soroti 23,722.30 12,177.00 4,382.30 1,434.00 6,815.00 48,530.60 TOTAL 523,691.40 35,035.00 20,053.00 127,086.70 376,125.60 24,378.00 174,825.00 262,222.70 1,543,417.40

Source: NLPIP Project Office, Entebb 175 Economic Policy Research Centre (EPRC) Uganda Public Expenditure Review Phase 3

Annex 5: Procurement of goods and services under MAAIF for FY 2006/07 PROCUREMENT FOR FY 2006- 2007 SN Procurement reference Description of the Catego Meth supplier User Contract Amount Location Fund number procurement ry od Period (shs) ing sourc e 2 PR:010/SRVCS/CDP/06-07 Tenancy agreement for SRVCS Direct Bageine & Co Ltd CDP Jan 07 2,893,573 Entebbe GoU CDP 3 PR:0091/SRVCS/DEWS/06- Paper SRVCS Direct Farmers voice Ltd DEWS Oct 06 2,000,000 Entebbe GoU 07 4 PR: 0049/SRVCS/ERT/06-07 Printing of brochures ERT Direct MPK Graphics Ltd ERT Jan 07 21,000,000 Entebbe WB for ERT 5 PR:009/SRVCS/ERT/06-07 Project SRVCS Direct Development analyst ERT Sept 06 9,000,000 Entebbe WB magazine 6 PR:0021/SRVCS/ERT/06-07 Publication of SRVCS Direct Farmers voice Ltd ERT Nov 06 6,000,000 Entebbe WB awareness article farmers’ voice 7 PR:0060/SRVCS/F+A/06-07 Repair of UF159IA SRVCS Direct Kampala Nissan F+A Nov 06 3,603,430 Kampala GoU 8 PR:0073/SRVCS/FDP/06-07 Printing of local fish GDS Direct Uganda printing and FDP Dec 06 5,000,000 Entebbe ADB health inspection publishing corporation certificate 9 PR:0079/SRVCS/LHE/06-07 Procurement of GDS Direct Uganda printing and LHE Sep 06 15,635,000 Entebbe GoU movement permits publishing corporation book 10 PR:0022/SRVCS/ERT/06-07 Publication in SRVCS Direct Infrastructure scanner NLPIP Oct 06 4,200,000 Entebbe ADB infrastructure magazine magazine 11 PR:0051/GDS/NLPIP/06-07 Variation in supply of NLPIP Direct EL-shaddai NLPIP May 07 35,862,144 Entebbe ADB ambush super international Ltd 12 PR:0102/SRVCS/ERT/06-07 Publication of an article SRVCS Direct Farmers voice Ltd ERT Nov 06 6,000,000 Entebbe WB in the farmers’ voice 13 PR:0059/SRVCS/F+A/06-07 Repair of Nissan UG GDS Direct Kampala Nissan F+A Nov 06 6,611,363 Kampala GoU 0006A

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14 PR:0065/GDS/LHE/06-07 Procurement of east GDS Direct LMK laboratory & LHE 6,748,800 Entebbe GoU coast fever standard kit consultant Ltd 15 PR:0006/GDS/LHE/06-07 Procurement of FMD GDS Direct Cooper (u) Ltd & LHE Sep 06 15,000,000 Entebbe GoU vaccine ERAM (U) Ltd 16 PR:00312/RCVS/NLPIP/06- Advert – cattle for SRVCS Direct Monitor publications NLPIP May 07 2,775,000 Entebbe ADB 07 genetic improvement Ltd 18 PR:0125/RCVS/NLPIP/06-07 Movement control SRVCS Direct Pacis radio, Paidha Ltd NLPIP Nov 06 73,594,462 Various ADB & others 19 PR:0054/RCVS/NLPIP/06-07 Publication of article on NLPIP Direct Development analyst NLPIP Oct 06 4,500,000 Entebbe ADB development magazine 20 PR:0050/GDS/VODP/06-07 Additional computer GDS Direct Raps (U) Ltd VODP 7,310,000 Kampala IFAD 22 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Byalesima Cocoa 9,000,000 Kampala GoU 07 seedling 23 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Byaruhanga Jane Cocoa 9,000,000 Kampala GoU 07 seedling 24 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Inya martin Cocoa 7,500,000 Kampala GoU 07 seedling 25 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Isingoma Anthony Cocoa 3,000,000 Kampala GoU 07 seedling 26 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Isingoma peter Cocoa 4,500,000 Kampala GoU 07 seedling 27 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Kadropany V Cocoa 9,000,000 Kampala GoU 07 seedling 28 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Kalibala David Cocoa 7,500,000 Kampala GoU 07 seedling 29 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Kasumba Andrew Cocoa 9,000,000 Kampala GoU 07 seedling 30 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Kiddawalime Cocoa 7,500,000 Kampala GoU 07 seedling 31 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Kidde James Cocoa 9,000,000 Kampala GoU 07 seedling 32 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Lubega John Cocoa 9,000,000 Kampala GoU 07 seedling 33 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Lwanga Henry Cocoa 9,000,000 Kampala GoU 07 seedling

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34 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Mugogo mike Cocoa Kampala GoU 07 seedling 35 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Musisi Alex Cocoa 9,000,000 Kampala GoU 07 seedling 36 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Nakaziba Monica Cocoa 3,000,000 Kampala GoU 07 seedling 37 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Ngwabusa fabiano Cocoa 7,500,000 Kampala GoU 07 seedling 38 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Nyandera Sara Cocoa 4,500,000 Kampala GoU 07 seedling 39 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Osudo Mike Cocoa 7,500,000 Kampala GoU 07 seedling 40 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Rwatoro Steven Cocoa 9,000,000 Kampala GoU 07 seedling 41 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Sembatya Domino Cocoa 7,500,000 Kampala GoU 07 seedling 42 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Senwanga M Cocoa 9,000,000 Kampala GoU 07 seedling 43 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Sentayi Peter Cocoa 7,500,000 Kampala GoU 07 seedling 45 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Trans global enterprise Cocoa 6,000,000 Kampala GoU 07 seedling (U) 47 PR:0069/GDS/COCOA/06- Procurement of cocoa GDS Direct Wamunya V Cocoa 9,000,000 Kampala GoU 07 seedling 48 PR:0113/SRVCS/CDP/06-07 Printing service SRVCS Direct UPPC CDP 2,700,000 Entebbe GoU 49 PR:0218/GDS/EUREP/06-07 Stationery GDS Direct M /s Heron enterprise CDP 20,407,274 Entebbe GoU 50 PR:0096/SRVCS/ERT/06-07 Publication of article SRVCS Direct M HAI Agency Ltd ERT 8,070,000 Entebbe WB 51 PR:0097/SRVCS/ERT/06-07 Publication of article SRVCS Direct Ms. Development ERT 9,000,000 Entebbe WB analyst magazine 52 PR:0018/SRVCS/FDP/06-07 Advertisement SRVCS Direct The New Vision FDP 5,827,500 Entebbe ADB 53 PR:0119/SRCVS/FDP/06-07 Advertisement SRVCS Direct The monitor FDP 5,550,000 Entebbe ADB publication 54 PR:0001/GDS/LHE/06-07 FMD vaccine GDS Direct Cooper (U) Ltd LHE 1,560,000 Entebbe GoU 55 PR:0033/SRVCS/NLPIP/06- Advertisement for SRVCS Direct Ms monitor publication NLPIP 925,000 Entebbe ADB 07 addendum for motor

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cycle 56 PR:0005/GDS/VODP/06-07 Publication of an GDS Direct M/S infrastructure VODP 4,200,000 Kampala GoU infrastructure scanner scanner magazine 1,943,319,0 84 57 PR:0015/SRVCS/VODP/06- Accounting package SRVCS Direct M/s PACE Consultants VODP USD 25,000 Kampala IFAD 07 63 PR:0007/GDS/FDP/06-07 Office equipment for GDS Open Roko technical service FDP 40,055 Entebbe ADB fisheries department tender 66 PR:0033/SRVCS/NLPIPI/06- Motor cycles and GDS Open Trans Africa commerce NLPIP Dec 06 13,351,500 Entebbe ADB 07 bicycles tender Ltd 87 PR:0071/GDS/VODP/06-07 Soya bean seeds GDS Open Association VODP Jan 07 41,418,000 Kampala IFAD tender 89 PR:0070/GDS/VODP/06-07 Sunflower seed GDS Open Association VODP Mar 07 85,000,000 Kampala IFAD tender 62 PR:0090/WRKS/FDP/06-07 Institute ,Entebbe and WRKS Open Broad way engineering FDP May 07 197,569,368 Entebbe ADB Kajjansi ARDC(FDP) tender service Ltd 60 PR: 0090/WRKS/FDP/06-07 Institute ,Entebbe and WRKS Open Lubmarks Investment FDP May 07 265,,039,03 Entebbe ADB Kajjansi ARDC(FDP) tender Ltd 5 61 PR: 0090/WRKS/FDP/06-07 Institute ,Entebbe and WRKS Open Costa construction FDP May 07 326,437,128 Entebbe ADB Kajjansi ARDC(FDP) tender service Ltd 59 PR: 0090/WRKS/FDP/06-07 Institute ,Entebbe and WRKS Open Akia – liberty FDP May 07 599,042,312 Entebbe ADB Kajjansi ARDC(FDP) tender construction joint venture 85 PR:0053/WRKS/NSADP/06- Construction of markets WRKS Open M/s technology 3 (U) NSADP May 07 716,159,757 Moyo ADB 07 in Adjumani tender Ltd 79 PR: 0053/WRKS/NSADP/06- Construction of markets WRKS Open M/s mussad (U) Ltd NSADP 717,007,311 Yumbe ADB 07 in Adjumani tender 77 PR: 0053/WRKS/NSADP/06- Construction of markets WRKS Open M/s kol service Ltd NSADP 730,999,253 Yumbe ADB 07 in Adjumani tender 72 PR: 0053/WRKS/NSADP/06- Construction of markets WRKS Open M/s Buyela building NSADP 747,957,409 Nebbi ADB 07 in Adjumani tender construction 76 PR: 0053/WRKS/NSADP/06 Construction of markets WRKS Open M/s Kamukaro general NSADP 759,893,856 Adjumani ADB in Adjumani tender contractors 73 PR: 0053/WRKS/NSADP/06 Construction of markets WRKS Open M/s Donkik enterprise NSADP 783,529,085 Moyo ADB

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in Adjumani tender Ltd 81 PR: 0053/WRKS/NSADP/06 Construction of markets WRKS Open M/s Pioneer NSADP 1,105,430,8 Nebbi ADB in Adjumani tender constructing Co 65 83 PR: 0053/WRKS/NSADP/06 Construction of markets WRKS Open M/s Raja (U) Ltd NSADP 1,24,703,50 Adjumani ADB in Adjumani tender 7 80 PR: 0053/WRKS/NSADP/06 Construction of markets WRKS Open M/s Ochoda enterprise NSADP 1,461,311,6 Nebbi ADB in Adjumani tender Ltd 04 74 PR: 0053/WRKS/NSADP/06 Construction of markets WRKS Open M/s Dynamic NSADP 1,462,237,1 Moyo ADB in Adjumani tender engineering scv 39 78 PR: 0053/WRKS/NSADP/06 Construction of markets WRKS Open M/s MAREZ NSADP 1,560,843,0 Arua ADB in Adjumani tender service Co Ltd 98 82 PR: 0053/WRKS/NSADP/06 Construction of markets WRKS Open M/s Prime I.K Ltd NSADP 1,675,688,7 Arua ADB in Adjumani tender 67 84 PR: 0053/WRKS/NSADP/06 Construction of markets WRKS Open M/s shepherds NSADP 686,764,697 Koboko ADB in Adjumani tender service Ltd 75 PR: 0053/WRKS/NSADP/06 Construction of markets WRKS Open Interdisciplinary NSADP 725,536,340 Moyo ADB in Adjumani tender construction Co 76 PR: 0053/WRKS/NSADP/06 Fish market stall in WRKS Open Various contractors FDP 4,406,304,6 ADB central zone tender 00 18,901,981, 649 64 PR:0091/WRKS/FDP/06-07 Institute, aquaculture WRKS Open FDP US$ Entebbe ADB research centre tender 713,473 65 PR:0028/GDS/FIEFOC/06-07 Vehicle GDS Open Toyota (U) Ltd FIEFO US$238,941 Entebbe ADB tender C 69 PR:0048/GDS/NLPIP/06-07 Veterinary drugs GDS Open Cooper (U) Ltd NLIPIP USD Entebbe ADB tender 225,000 71 PR:0048/GDS/NLPIP/06-07 Veterinary drugs GDS Open M/A DRC industries NLIPIP USD Entebbe GoU tender 227,111,88 90 PR:0108/GDS/LHE/06-07 Procurement of one GDS Restri Victoria motors Ltd LHE May 07 62,031,436 Entebbe GoU 4WD double cabin cted 91 PR:0058/GDS/CDP/06-07 Air conditioner for GDS Restri Kengrow industries CDP 2007 51,175,000 Namalere GoU laboratory -Namalere cted 92 PR:0081/GDS/CDP/06-07 Office furniture GDS Restri M/s Mullin option Ltd CDP Entebbe GoU

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cted 93 PR:0067/GDS/CDP/06-07 Procurement of one GDS Restri Victoria motor limited CDP 2007 72,905,000 Entebbe GoU 4WD double cabin cted 94 PR:0039/GDS/F+A/06-07 2 Nissan patrol stale GDS Restri Kampala Nissan F+A Dec 06 318,506,253 Entebbe GoU wagon cted 95 PR:0074/GDS/FDP/06-07 Double cabin pick up GDS Restri Victoria motor limited FDP 471,030,000 Kampala ADB cted 96 PR:0063/GDS/LHE/06-07 Vaccine equipment GDS Restri Cooper (U) Ltd LHE Mar 07 103,000,000 Entebbe GoU cted 97 PR:0033/WRKS/NSAD/06- Motor cycles and GDS Restri Kampala Nissan NSADP JPY34,437,5 Entebbe ADB 07 bicycles cted 64 98 PR:0098/WRKS/VODP/06- Construction of office WRKS Restri VODP 2007 150,000,000 Kalangala IFAD 07 block cted 100 PR:0075/GDS/VODP/06-07 Accessories GDS Restri MTA Computers VODP Jan 07 51,380,254 Kampala IFAD cted 101 PR:0042/GDS/VODP/06-07 Procurement of tractor GDS Restri Not yet done VODP Kampala IFAD and trailer cted 1,245,590,3 79 102 PR:0013/SRVCS/F+A/06-07 Guarding services SRVCS RFP Ultimate security Ltd F+A Entebbe GoU 103 PR:0085/SRVCS/FDP/06-07 Publication of an article SRVCS RFP Development analyst FDP Dec 06 UGX Entebbe ADB magazine 3,000,000 104 PR:0220/SRVCS/NLPIP/06- Consultancy: training & SRVCS RFP J.VAN.LANCKER NLIPIP USD Entebbe ADB 07 management 236,900 105 PR:0054/SRCVS/NLPIP/06- Publishing an article SRVCS RFP Development analyst NLIPIP UGX Kampala ADB 07 magazine 4,500,000 7,500,000 108 PR:0101/GDS/APD/06-07 Office stationery for GDS RFQ Taurus general trade APD Mar 07 7,775,640 Entebbe GoU agriculture planning 109 PR:0088/GDS/APD/06-07 Staff uniform for GDS RFQ Bulensda garment APD Mar 07 3,823,200 Entebbe GoU agriculture planning enterprise 110 PR:0061/GDS/CP/06-07 Office stationery for GDS RFQ Okinawa stationery CDP Jul 06 25,532,250 Entebbe GoU crop protection 111 PR:0107/WRKS/CP&M/06- Repair under CP&M WRKS RFQ Muhekamu enterprise CDP May 07 3,094,432 Entebbe GoU 07 Ltd

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112 PR:0129/GDS/CPD/06-07 Stationery for crop GDS RFQ Taurus general trade CPD 2007 29,380,000 Entebbe GoU protection 113 PR:0018/GDS/CDP/06-07 Supply of filliina GDS RFQ Footsteps furniture Ltd CPD 2007 5,800,000 Entebbe GoU 116 PR:0089/GDS/DEWS/06-07 Sets GDS RFQ Southern business DEWS Jan 07 30,302,300 Entebbe GoU solutions Ltd 117 PR:0083/GDS/ERT/06-07 Office stationery GDS RFQ Degola general ERT Feb 07 3,153,000 Entebbe WB (assorted) enterprise 120 PR:0012/SRVCS/F+A/06-07 Cleaning services SRVCS RFQ Sparkle clean service F+A 3,456,609 Entebbe GoU 121 PR:0093/GDS/ F+A/06-07 Desktop computer & GDS RFQ F+A 4,500,000 Entebbe GoU accessories for MOS (A) 122 PR:0092/GDS/F+A/06-07 Desktop computer for GDS RFQ F+A 4,500,000 Entebbe GoU US/F+A 124 PR:0055/SRVCS/F+A/06-07 LAN ,Inter-net & F+A RFQ MTN Uganda Ltd F+A Mar 07 3,616,949 Entebbe GoU PABX for MOA 126 PR:0126/WRKS/ F+A/06-07 New sewerage line WRKS RFQ Muhekamu enterprise F+A 2007 7,529,928 Entebbe GoU MAAIF HQTS Ltd 127 PR:056/GDS/F+A/06-07 Office equipment for F+A RFQ Raps Uganda F+A Oct 06 31,485,000 Entebbe GoU F+A 130 PR:0106/GDS/F+A/06-7 Office stationery for GDS RFQ Willy commercial F+A Mar 07 16,815,000 Entebbe GoU F+A enterprise 131 PR:0114/SRVCS/FDP/06-07 Clearing patrol boats SRVCS RFQ Classic clearing and FDP Mar 07 Euro Entebbe ADB and associated forwarding 1,235,910 equipments 132 PR:0113/SRVCS/CDP/06-07 Office stationery GDS RFQ Okinawa stationery FDP 25,532,250 Kampala ADB 134 PR:0027/GDS/FIEFOC/06-07 Photocopier and fax GDS RFQ MTA Computer FIEFO Dec 06 52,500,000 Entebbe ADB machine C 135 PR:0028/GDS/FIEFOC/06-07 Motor vehicle GDS RFQ Toyota Uganda FIEFO Feb 07 458,452,628 Entebbe ADB C 138 PR:0095/GDS/NLPIP/06-07 Office stationery for GDS RFQ Matrix agencies Ltd NLPIPL 2007 5,948,000 Entebbe ADB livestock census secretariat 139 PR:0082/GDS/NLPIP/06-07 Air conditioner for GDS RFQ Not yet NLPIPL Entebbe ADB HON MOS (A) 140 PR:0023/GDS/NLPIP/06-07 computers GDS RFQ Raps Uganda Ltd NLPIPL 4,194,540 Entebbe ADB

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141 PR:0023/GDS/NLPIP/06-07 Desktop computer for GDS RFQ Raps Uganda Ltd NLPIPL Oct 06 4,707,400 Entebbe ADB MOS (A) 142 PR:0087/GDS/NLPIP/06-07 Office stationery for GDS RFQ paper line stationery ltd NLPIPL Feb 07 6,829,840 Entebbe ADB NLPIP 143 PR:0080/GDS/NLPIP/06-07 Tyres for project GDS RFQ Priamil enterprise NLPIPL Feb 07 8,556,100 Entebbe ADB vehicles 144 PR:0045/GDS/NLPIP/06-07 Ear tags for cattle and GDS RFQ Cooper (u) ltd NLPIPL Oct 06 42,000,000 Entebbe ADB goats 145 PR:0034/SRVCS/NSADP/06- Revised edition of the SRVCS RFQ Uganda law reform NLPIPL Dec 06 Entebbe ADB 07 principal laws of commion Uganda 146 PR:0020/SRVCS/NSADP/06- Blue prints for markets SRVCS RFQ Herbco colour printer NSADP 5,575,000 Entebbe ADB 07 148 PR:0053/WRKS/NSADP/06- Office stationery GDS RFQ Kibokwi agencies Ltd NSADP 4,073,622 Kampala ADB 07 149 PR:0015/SRVCS/NSADP/06- Radio contract under SRVCS RFQ Arua FM, Paidha NSADP Nov 06 44,730,600 West Nile ADB 07 NSADP radio 153 PR:0094/SRVCS/PMA/06-07 Consultancy for PMA SRVCS RFQ Semwanga centre PMA May 07 USD60,400 Kampala GoU DCL &group 154 PR:0044/GDS/SIP/06-07 Office stationery for GDS RFQ Kibokwi agencies Ltd SIP Jan 07 4,073,622 Entebbe GoU SIP 155 PR:0104/GDS/SME/06-07 Tyres for SME vehicles GDS RFQ Kilimanjaro tyres Ltd SME Feb 07 1,999,500 Entebbe GoU 158 PR:0052/GDS/VODP/06-07 Photocopier machine VODP RFQ MTA Computer VODP Feb 07 7,622,673 Kampala IFAD 159 PR:0076/GDS/VODP/06-07 Procurement of GDS RFQ Hoonkob printer Ltd VODP Feb 07 12,000,836 Kampala IFAD calendars and dairies 160 PR:0050/GDS/VODP/06-07 Procurement of GDS RFQ Raps Uganda Ltd VODP 7,310,000 Kampala IFAD additional computers 162 PR:0127/GDS/VODP/06-07 Spray pumps, GDS RFQ Kwera Ltd VODP May 07 18,319,500 Kalangala IFAD herbicides, protective wear for VODP 163 PR:0220/GDS/VODP/06-07 Vehicles GDS RFQ Victoria motors VODP Kampala IFAD 166 PR:0088/GDS/PU/06-07 Uniform for support Plannin RFQ Bulenda garments F+A Mar 07 3,823,200 Entebbe GoU staff g enterprise 168 PR:0046/GDS/NLPIP/06-07 Pasture seeds and GDS RFQ El –shaddai ltd and NLPIPL Mar 07 225,040,840 Entebbe ADB pesticides victoria seeds

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169 PR:0087/GDS/NLPIP/06-07 Procurement of office GDS RFQ paper line stationery ltd NLPIPL Feb 07 6,829,840 Entebbe ADB stationery

Annex 6: AAMP Budget Mbarara Description 2005/06 Actual 2006/07 Actual 2007/08 Actual Estimate Estimate Estimate Allowances 67,350,000 53,480,161 40,558,620 Advertising & public 1,599,760 128,000 200,000 relations Workshops & seminars 48,169,997 33,097,731 28,753,200 Printing, stationary 1,580,000 483,000 3,230,000 &photocopying Telecommunications 680,000 415,000 400,000 General supply of goods & 33,615,920 24,561,833 25,459,005 services Travel inland 31,417,512 21,065,000 26,719,346 Fuel, lubricants & oils 25,794,348 24,773,968 22,655,578 Maintenance-civil 36,000,000 26,000,000 - Maintenance- vehicles 4,700,000 3,717,497 2,809,126 Transfers to other Gov’t 31,808,119 27,226,676 14,981,779 units

Annex 7: FIEFOC Budget Mbarara District. Description 2005/06 Actual 2006/07 Actual 2007/08 Actual Estimate Estimate Estimate Allowances 3,400,000 Advertising & public 200,000 relations Workshops & seminars 1,000,000 Books, periodicals & 50,000 newspapers Welfare & entertainment 100,000

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Printing, stationary 1,216,750 &photocopying Telecommunications 100,000 General supply of goods & 8,300,000 services Travel inland 8,830,000 Fuel, lubricants & oils 8,130,000 Maintenance- vehicles 1,500,000 Total 32,826,750

Annex 8: NLPIP Budget Mbarara district Description 2005/06 Actual 2006/07 Actual 2007/08 Actual Estimate Estimate Estimate Allowances 4,000,000 Advertising & public 1,000,000 relations Workshops & seminars Books, periodicals & newspapers Welfare & entertainment Printing, stationary 3,000,000 &photocopying Telecommunications 1,000,000 General supply of goods & 3,000,000 services Travel inland 22,000,000 Fuel, lubricants & oils 18,000,000 Maintenance- vehicles Total 52,000,000

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Annex 9: Agricultural Extension budget Mbarara Description 2005/06 Actual 2006/07 Actual 2007/08 Actual Estimate Estimate Estimate General staff salaries 113,525,000 Travel inland 19,700,000 Stationary 2,000,000 Fuel 5,563,000 Workshops & meetings 3,837,000 Allowances 3,100,000 Telecommunications 300,000 Adverts & public relations 400,000 Vehicle maintenance 3,000,000 Other expenditure. 966,000 Total 152,391,000

Annex 10: NAADS Budget for Bushenyi district Description 2005/06 Actual 2006/07 Actual 2007/08 Actual Estimate Estimate Estimate NAADS coordinator 25,200,000 26,880,000 23,880,000 26,880,000 Allowances 52,100,000 57,310,000 57,310,000 57,310,000 Books, periodicals & 700,000 700,000 700,000 700,000 newspapers Computer & IT supplies 700,000 700,000 700,000 700,000 Printing, stationary 1,309,090 1,440,000 1,440,000 1,440,000 &photocopying Telecommunications 800,000 800,000 800,000 800,000 Fuel, lubricants & oils 22,000,000 35,610,000 28,610,000 35,610,000 Maintenance- vehicles 4,000,000 6,000,000 6,000,000 6,000,000 Transfer to other Gov’t units 784,590,910 1,147,350,000 782,314,000 1,143,635,000

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& supply of goods & services Total 891,400,000 1,276,790,000 901,754,000 1,273,075,000

Annex 11: NAADS Arua for Financial Year 2006/07 Description Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Opening balances

District NAADS collection A/c 2,553,272 93,897,730 23,839,169 42,425,132 Sub county NAADS accounts 231,188,955 124,667,241 298,360,337 455,646,838 Less Mar Terego sub counties 156,679,369 Arua sub counties 74,509,592 Subtotal(a) 77,062,864 218,564,971 322,199,506 498,071,970 Receipts/ Advances:

From Treasury, MFPED 273,090,583 273,056,000 273,055,000 273,054,667 1,092,256,250 District contribution - - 2,500,000 6,000,000 8,500,000 Sub county Contributions 6,370,250 3,930,000 12,081,000 24,747,002 47,128,252 Farmer contributions 1,720,250 1,991,000 7,068,666 3,985,600 14,765,516 ISFG cheque to 2 sub counties Subtotal(b) 281,181,083 278,977,000 294,704,666 307,787,269 1,162,650,018 Funds available(a+b) 358,243,947 497,541,971 616,904,172 805,859,239 2,278,549,329 Expenditure incurred Annual Gratuity DNC 4,134,000 DNC’s contract services 6,132,000 3,703,000 5,208,000 7,252,000 22,295,000 NSSF contribution 231,000 693,000 924,000 1,848,000 Allowances 13,779,000 24,579,050 28,354,300 31,694,200 98,406,550 Committee expenses 1,432,000 1,176,000 2,821,500 3,327,800 8,757,300 Computer supplies 962,600 971,800 399,150 513,100 2,846,650 Printing, stationary &photocopying 2,287,750 2,712,500 1,925,300 2,153,400 9,078,950 Telecommunications 953,000 1,777,200 840,000 1,139,400 4,709,600 Fuel, lubricants & oils 1,892,300 8,462,290 9,170,750 9,389,009 28,914,349 Insurance & licenses 2,546,126 175,000 - 76,800 2,797,926

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Maintenance- vehicles 2,730,000 3,759,043 7,785,887 8,091,137 22,366,067 Maintenance, others/ bank charges 1,978,043 1,750,442 1,174,789 1,778,085 6,681,359 Professional services 36,774,176 51,644,400 49,495,822 128,620,905 266,535,303 General supply of goods & 106,452,481 69,998,860 53,388,836 278,715,877 508,556,054 services NAADS Secretariat Planning 1,297,000 - - 1,297,000 meetings Total expenditure(d) 177,919,476 176,371,585 161,257,334 473,675,713 989,224,108 Balance at closing (c-d) 180,324,471 321,170,386 455,646,838 332,183,526

District NAADS collection a/c 93,897,730 23,839,169 42,425,132 36,784,046 Sub county NAADS accounts 124,667,241 298,360,337 413,221,706 263,934,719 Sub total 218,564,971 322,199,506 455,646,838 300,718,765

Annex 12: ANALYSED EXPENDITURE ARUA NAADS 2006/2007 Activity Annual Quarter 1 Quarter 2 Quarter 3 Quarter 4 Cumulative expenditure budget Coordinator services 27,300,000 6,132,000 3,703,000 5,208,000 7,252,000 22,295,000 contract Annual gratuity DNC 4,200,000 - 4,134,000 - - 4,134,000 NSSF contribution 2,268,000 - 231,000 693,000 924,000 1,848,000 Support to farmer 3,550,000 - - - 3,809,200 3,809,200 institutional development Participation in 3,040,000 1,524,000 1,297,000 1,281,000 1,594,600 5,696,600 secretariat meeting Documentation of 1,000,000 - - - - - lessons learnt District operating costs 14,000,000 5,087,125 4,060,561 11,165,837 6,051,053 26,364,576 Internal Audit 3,137,300 - 798,000 130,000 1,970,000 2,898,000 NAADS information & 4,000,000 100,000 370,000 200,000 4,980,000 5,650,000 communication services Agribusiness & market 21,260,000 - 5,714,000 1,716,000 21,558,000 28,988,000

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linkages Normal NAADS Agribusiness & market 85,935,000 - 2,500,000 - 3,568,000 6,068,000 linkages- Value chain ISFG Grant for 2 sub - 38,242,500 - - - 38,242,500 counties Process monitoring/PSP 7,145,000 394,000 - 3,635,200 1,842,400 5,871,600 technical audit Semi and annual 4,000,000 - - 1,880,000 1,880,500 3,760,500 reviews Totals 180,835,300 51,479,625 22,807,561 25,909,037 55,429,753 155,625,976

Annex 13: MBARARA NAADS CONSOLIDATED FINANCIAL REPORT 2005/2006 Description Quarter 1 Quarter 2 Quarter 3 Quarter 4 Opening Balance District NAADS A/C 9,829,123 30,880,387 85,818,787 18,001,787 Sub county NAADS 208,288,094 117,006,955 86,344,455 78,303,879 Subtotal(a) 218,117,217 147,887,342 172,163,242 96,305,666 Receipts From Treasury 349,750,000 85,504,000 40,190,000 192,154,000 District contribution 1,683,680 Sub county contribution 1,000,000 150,000 979,000 5,533,000 Farmers contribution 1,774,202 344,000 1,955,500 704,000 Others(stale cheque) 202,080 Subtotal(b) 652,524,202 85,998,000 43,319,500 200,276,760 Funds available a+b 570,641,419 233,885,342 215,482,742 296,582,426 Expenditure incurred Allowance 38,876,500 35,775,110 28,243,000 48,906,120 Fuel 5,558,300 6,967,250 5,420,200 4,864,500 Salary 3,500,000 5,250,000 2,030,000 11,340,000 Gratuity 4,200,000

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Stationary 1,673,650 1,883,200 1,983,400 2,626,600 Computer services 87,750 65,500 93,000 265,800 General supply of goods & services 40,149,385 1,251,840 65,543,626 110,248,520 Committee expenses 9,157,000 4,637,840 554,150 300,000 Communication 2,574,384 2,477,200 2,319,800 2,495,200 Professional services 15,088,200 1,650,000 2,610,000 9,285,480 Vehicle maintenance 796,286 404,000 6,077,400 508,000 Maintenance & others 977,345 1,186,000 1,382,000 Transfer to Kiruhura 7,933,000 Bank charges 175,000 102,500 157,500 Total expenditure 119,058,800 61,722,100 119,177,076 200,312,720 Balance at closing 451,582,619 172,163,242 96,305,666 96,269,706 District NAADS A/C 30,880,387 85,818,787 18,001,787 37,837,047 Sub county NAADS A/C 420,702,232 86,344,455 78,303,879 58,432,659 TOTAL 437,433,795 172,163,242 96,305,666 96,269,706

Annex 14: MBARARA NAADS CONSOLIDATED FINANCIAL REPORT 2006/2007 Description Quarter 1 Quarter 2 Quarter 3 Quarter 4 Opening Balance District NAADS A/C 37,837,047 62,139,784 165,081,968 33,576,968 Sub county NAADS 58,432,659 32,188,276 135,878,912 326,956,302 Uncredited cheques 16,200,000 Subtotal(a) 9,269,706 110,528,060 300,960,880 360,533,270 Receipts From Treasury 51,791,667 258,958,334 155,375,000 155,374,998 District contribution 3,987,750 NAADS Secretariat 33,960,000 Sub county contribution 1,066,317 2,385,000 2,060,000 10,129,950 Farmers contribution 85,000 3,591,025 2,881,000 Bank interest 25 25 Subtotal(b) 86,817,984 262,193,334 161,026,050 172,373,723

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Funds available a+b 183,087,690 372,721,394 461,986,930 532,906,993 Expenditure incurred Salary 1,890,000 6,581,000 6,649,000 13,881,000 Allowance 7,271,000 20,325,000 35,487,500 55,571,400 Advertising 1,352,225 2,984,700 Workshops 7,271,264 2,288,000 5,050,000 Entertainment 300,000 426,000 135,000 Stationary 298,000 2,207,050 4,368,175 5,542,950 Computer services 57,000 418,750 975,000 Communication 828,000 5,011,000 1,086,000 2,090,125 General supply of goods & services 40,014,700 21,325,550 32,492,010 160,870,910 Professional fees 1,180,000 6,788,500 28,458,700 Travel inland 66,500 3,984,000 2,076,000 19,096,200 Fuel 3,046,430 3,973,650 7,152,000 10,467,350 Vehicle maintenance 66,500 400,000 556,500 1,575,568 News papers 59,000 616,200 Transfer to sub counties 33,960,000 Bank charges 205,000 325,000 254,000 367,500 Total expenditure 88,759,630 71,760,514 101,453,660 307,682,603 Balance at closing 94,328,060 300,960,880 360,533,270 225,224,390 District NAADS A/C 62,139,784 165,081,968 33,576,968 3,523,198 Sub county NAADS A/C 32,188,276 135,878,912 326,956,302 221,701,192 TOTAL 94,328,060 300,960,880 360,533,270 225,224,390

Annex 15: MBARARA NAADS CONSOLIDATED FINANCIAL REPORT 2007/2008 Description Annual budget Quarter 1 Quarter 2 Quarter 3 Opening Balance District NAADS A/C 3,523,198 3,523,198 22,779,798 20,174,298 Sub county NAADS 228,319,572 221,701,192 279,174,761 169,683,624 Subtotal(a) 231,842,770 225,224,390 301,954,559 189,857,922 Receipts From Treasury 610,282,672 152,428,000 7,230,000 12,471,500

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District contribution 4,284,000 NAADS Secretariat 1,112,388 Sub county contribution 31,048,046 9,887,807 2,443,750 Farmers contribution 11,231,402 826,000 994,710 2,307,000 Bank interest 292 25 Subtotal(b) 657,958,508 163,142,099 8,224,735 17,222,250 Funds available a+b 889,801,278 388,366,489 310,179,294 207,080,172 Expenditure incurred Salary 32,186,101 979,000 9,304,500 10,178,500 Allowance 109,190,570 4,702,000 19,431,210 11,337,400 Advertising 5,742,659 356,125 88,000 Workshops 12,269,259 132,000 1,421,500 Entertainment 1,880,000 654,000 256,000 56,000 Water 25,000 Electricity 25,000 Stationary 12,903,554 694,000 1,894,150 1,472,100 Computer services 2,978,888 50,000 343,000 368,800 Communication 4,662,000 754,100 905,200 998,500 General supply of goods & services 562,884,382 68,323,430 72,301,887 48,047,700 Professional fees 69,804,100 7,934,903 6,865,800 4,530967 Travel inland 60,181,662 1,908,000 6,395,000 5,287,700 Fuel 9,053,703 100,000 1,152,000 1,932,750 Vehicle maintenance 4,755,000 100,000 706,000 180,000 News papers 401,400 99,700 Return of uncommitted funds 2,418,700 Bank charges 860,000 212,497 278,500 211,000 Total expenditure 889,801,278 86,411,930 120,321,372 88,629,317 Balance at closing 301,954,559 189,857,922 118,450,855 District NAADS A/C 22,779,798 20,174,298 9,019,848 Sub county NAADS A/C 279,174,761 169,683,624 109,431,007 TOTAL 301,954,559 189,857,922 118,450,855

Annex 16: NWADP DETAILED EXPENDITURE 2007/2008 (ARUA)

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Component Budget Actual Production enhancement Field based training 13,645,000 13,568,000 Seed multiplication Chemical Procurement 4,340,000 4,340,000 Seeds and chemical distribution 1,738,000 1,600,000 Seed multiply seed procurement 22,998,000 27,921,000 Assess performance of improved seeds 2,500,000 1,200,000 Farm mechanization Procurement of oxen and ox plough 25,700,000 35,698,600 Train farmers on traction 2,880,000 3,480,000 Marketing opportunities Farmer education through radios 633,000 600,000 Increase smallholders access to credit 3,742,000 3,742,000 Road maintenance Community access road maintenance 188,980,000 162,821,716 Supervision routine maintenance 6,744,000 33,430,710 Coordination and management D.TAC meetings 480,000 345,000 Quarterly management meetings 1,631,000 1,631,000 Submission of quarterly report to NPCU 460,000 70,980 Supervision by DPC 5,320,000 5,313,000 Supervision by subject matter specialist 3,780,000 3,388,000 Follow up accountability by CAO &Accounts Assistant 1,800,000 1,601,750 DLC Supervision 2,519,500 2,364,000 Procure tyres and spares for motorcycle 8,820,000 8,820,000 Maintenance of generator 3,080,000 3,080,000 Computer maintenance 4,271,000 4,271,000 Telephone, mails, internet, postage 900,000 900,000 Stakeholders meeting 850,000 850,000 Bank charges - 766,892 Total 310,418,289 310,296,503

Annex 17: NAADS Cash flow FY 2006/07 for Pallisa district

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Description Total annual Annual Annual budget September October- budget matching MTEF release December release grants Number of NAADS participating sub counties 4 4 4 4 4 District level budget Coordinator contract 15,750,000 15,750,000 NSSF contribution 1,580,000 1,575,000 District support to farmer Institutional 3,300,000 231,000 3,069,000 207,000 1,114,000 development District operating costs 4,000,000 280,000 3,720,000 251,000 1,350,000 Internal Audit 2,000,000 140,000 1,860,000 126,000 675,000 NAADS information & communication 3,300,000 231,000 3,069,000 207,000 1,114,000 services Agribusiness & market linkages 21,070,000 1,476,000 19,594,000 831,000 7,111,000 Monitoring 4,260,000 299,000 3,961,000 268,000 1,438,000 Semi & annual reviews 2,300,000 161,000 2,139,000 1,069,000 Participation in secretariat meetings 2,120,000 149,000 1,971,000 493,000 493,000 Documentation of lessons learnt 800,000 56,000 744,000 Total 60,480,000 3,024,000 57,450,000 2,384,000 14,360,000 Budget per sub county Sub county sensitization & orientation 3,000,000 210,000 2,790,000 Group mobilization 5,000,000 350,000 4,650,000 530,000 1,209,000 Support to CBFs 1,000,000 70,000 930,000 106,000 242,000 Advisory services 6,000,000 420,000 5,580,000 636,000 1,450,000 Sub county operating costs 3,900,000 273,000 3,627,000 414,000 943,000 Technology promotion 20,998,000 1,470,000 19,528,000 2,227,000 5,075,000 Agribusiness & market linkages 2,000,000 140,000 1,860,000 483,000 Sub county farmer monitoring 1,500,000 105,000 1,395,000 159,000 363,000 Semi and annual reviews 1,400,000 98,000 1,302,000 651,000 Total 44,798,000 3,136,000 41,662,000 4,073,000 10,420,000 Total sub county budget 179,192,000 12,543,000 166,649,000 16,290,000 41,660,000 Total district budget 239,667,000 15,567,000 224,100,000 18,675,000 56,025,000

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Annex 18: NAADS Cash flow FY 2007/08 for Pallisa district Description Total annual Annual matching Annual budget Special Release budget grants MTEF Number of participating sub counties Old- No ISFG funds 4 4 4 4 New – joined this year 7 7 7 7 Total 11 11 11 11 District level budget Coordinator contract 27,300,000 27,300,000 NSSF contribution 2,268,000 2,268,000 District support to farmer Institutional 2,210,000 155,000 2,055,000 401,000 development District operating costs 8,500,000 597,000 7,903,000 1,313,000 Internal Audit 1,950,000 137,000 1,813,000 363,000 NAADS information & communication services 3,500,000 246,000 3,254,000 588,000 Agribusiness & market linkages 10,237,000 719,000 9,518,000 1,565,000 Capacity development of CBFs 4,310,000 303,000 4,007,000 705,000 District monitoring 8,000,000 561,000 7,439,000 1,240,000 Semi and annual reviews 3,900,000 274,000 3,626,000 1,813,000 Participation in secretariat meetings 2,188,000 154,000 2,034,000 509,000 Participation in regional meetings 3,500,000 246,000 3,254,000 814,000 Total district 77,863,000 3,390,000 74,473,000 9,309,000 Sub county level budget Old –No ISFG Funds Group mobilization 3,000,000 210,000 2,790,000 698,000 Support to CBFs 2,000,000 140,000 1,860,000 191,000 Advisory services 11,000,000 770,000 10,230,000 1,052,000 Sub county operating costs 3,500,000 245,000 3,255,000 335,000 Technology promotion 16,600,000 1,162,000 15,438,000 1,587,000 Agribusiness & market linkages 3,500,000 245,000 3,255,000 335,000 Sub county farmer monitoring 2,200,000 154,000 2,046,000 210,000

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Semi and annual reviews 2,200,000 154,000 2,046,000 Total 44,000,000 3,080,000 40,920,000 4,408,000 New-joined current Financial year Sub county sensitization & orientation 3,000,000 210,000 2,790,000 698,000 Group mobilization 8,000,000 560,000 7,440,000 1,860,000 Support to CBFs 2,000,000 140,000 1,860,000 191,000 Advisory services 6,000,000 420,000 5,580,000 574,000 Sub county operating costs 3,500,000 245,000 3,255,000 335,000 Technology promotion 16,300,000 1,141,000 15,159,000 1,559,000 Sub county farmer monitoring 2,200,000 154,000 2,046,000 210,000 Semi and annual reviews 2,200,000 154,000 2,046,000 Total 43,200,000 3,024,000 40,176,000 5,426,000 Total sub county budget 478,400,000 33,488,000 444,912,000 55,614,000 Total district budget 556,263,000 36,878,000 519,385,000 64,923,000

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Annex 19: Bushenyi NAADS District Consolidated Financial Report 2005/2006 Description Annual budget Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Opening balances District NAADS account 584,265 584,265 15,074,794 14,914,268 18,584,234 49,157,561 Sub county NAADS A/C 82,705,283 82,705,283 199,361,554 310,662,511 344,961,708 937,691,056 Subtotal(a) 83,289,548 83,289,548 214,436,348 325,576,779 363,545,942 986,848,617 Receipts/advances From Treasury 891,405,000 228,850,000 216,850,000 209,479,000 236,221,000 891,400,000 District contribution 4,736,000 Sub county contribution 44,570,250 1,655,000 160,000 15,460,000 16,713,484 33,988,484 Farmers contribution 15,742,750 1,757,000 2,079,750 4,035,250 4,707,000 12,579,000 Deposit 700.000 5.000.000 16.023.113 Subtotal(b) 956,454,000 232,962,000 219,089,750 233,974,250 273,664,597 959,690,597 Funds available a+b 1,039,743,548 316,251,548 433,526,098 559,551,029 637,210,539 1,946,539,214 Expenditure incurred General staff salaries 21,000,000 - 6,502,150 5,950,000 6,270,000 18,722,150 Allowance (Travel) 116,819,265 18,805,500 29,862,020 33,312,345 57,643,277 139,623,142 NSSF contribution 4,200,000 Committee expenses 9,427,000 691,000 1,554,000 908,000 739,000 3,892,000 Computer supplies 2,435,000 - 100,000 50,000 1,310,400 1,460,400 Printing, stationary 13,416,200 2,851,565 2,656,625 5,424,700 5,684,870 16,617,760 Communication 12,246,765 2,139,990 1,971,265 1,767,150 2,354,700 8,233,105 Other utilities (fuel) 55,185,184 8,211,420 9,903,824 8,034,606 11,855,804 38,005,654 Supply of goods & services 490,464,749 40,867,254 34,520,993 75,050,870 270,469,736 420,908,853 Professional services 311,132,633 26,144,982 18,395,910 62,459,574 102,722,264 209,722,730 Insurance & licenses 575,000 - - - 804,243 804,243 Maintenance- vehicle - 721,300 1,811,000 830,500 3,670,099 7,032,899 Maintenance – others 2,841,752 682,189 671,532 870,342 946,112 3,170,175 Deposit - 700,000 - 1,349,500 18,766,363 20,815,863 Amount stolen by accountant 3,200,000 Total expenditure 1,039,743,548 105,015,200 107,949,319 196,007,587 483,236,868 889,006,474 Balance at closing 211,236,348 325,576,779 1363,543,442 153,973,671 1,054,330,240 District NAADS account 15,074,794 14,914,268 18,584,234 2,097,125

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Sub county NAADS A/C 196,161,554 310,662,511 344,959,208 -151,876,546

Annex 20: ANALYSED EXPENDITURE FOR BUSHENYI FOR THE PERIOD OF APRIL – JUNE 2006

Activity Annual Quarter 1 Quarter 2 Quarter 3 Quarter 4 Cumulative budget expenditure Coordinator contract 25,200,000 - 6,502,150 6,250,000 6,270,000 19,022,150 District NAADS operating costs 16,584,265 7,147,171 5,096,126 9,735,784 3,937,809 25,916,890 Information & communication systems 4,545,000 1,621,000 900,000 600,000 1,113,100 4,234,100 Institutional development support 5,636,000 1,505,500 1,085,000 674,500 1,984,950 5,249,950 Technology development 14,560,000 400,000 1,000,000 - 9,033,300 10,433,300 Technical audit of service providers 14,760,000 2,703,300 4,758,250 1,626,250 2,786,200 11,874,000 District internal audit 2,731,000 666,500 499,500 515,000 463,000 2,144,000 Monitoring & evaluation 6,240,000 - 92,000 - 5,725,000 5,817,000 Semi & annual reviews & planning 5,174,000 - 2,582,500 - 2,239,500 4,822,000 workshop Transfer to sub counties 0 200,316,000 194,495,000 190,058,000 216,412,000 801,281,000 Deposit 0 700,000 - 1,349,500 18,766,363 20,815,863 Total expenditure 95,430,265 215,059,471 217,010,526 210,809,034 268,731,222 911,610,253

Annex 21: Bushenyi local government NAADS District Consolidated Financial Report District Bushenyi Financial Year 2004/2005 code Description Annual Q1 Q2 Q3 Q4 Total Variance Exp. To Budget Budget a Opening Balance: - - - - District NAADS Account 278,548 334,738 1,176,251 10,058,891

Sub County NAADS Account 1,789,690 21,328,775 105,107,252 141,281,074 Sub Total (a) 2,068,238 21,663,513 106,283,503 151,339,965 B Receipts/Advances: From Treasury, MFPED 512,200,000 58,558,000 184,737,000 140,855,000 128,050,000 512,200,000 District Contribution 3,770,000 - 3,020,000 5,000,000 - 8,020,000 - 4,250,000 Sub County contribution 23,660,000 1,280,000 375,000 8,250,000 4,428,201 14,333,201 9,326,799

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Farmer contribution 9,490,000 575,000 1,265,000 2,992,000 1,510,000 6,342,000 3,148,000 Deposit - - - 2,191,000 - 2,191,000 - 2,191,000 Subtotal (b) 549,120,000 60,413,000 189,397,000 159,288,000 133,988,201 543,086,201 6,033,799 C Funds available (a+b) - 62,413,000 211,060,513 265,571,503 285,328,166 824,441,420 - 824,441,420 D Expenditure incurred: General Staff Salaries 25,200,000 5,250,000 5,250,000 7,000,000 3,499,500 20,999,500 4,200,500 Allowances (Travel) 58,260,000 14,499,840 21,955,634 16,507,600 34,981,390 87,944,464 29,684,464 Social contributions staff 4,208,400 - - 2,100,000 3,850,000 5,950,000 1,741,600 gratuity Committee expenses 2,980,000 169,000 439,000 175,200 475,200 1,258,400 1,721,600 Computer supplies 765,000 4,000 4,500 - - 8,500 756,500 Printing, Stationary, 10,870,000 2,345,700 2,693,872 2,578,750 1,712,393 9,339,715 1,530,285 Photocopying & binding Communication 3,810,000 883,000 1,292,400 1,234,600 4,729,800 8,139,800 4,329,800 Other utilities (fuel) 34,390,000 2,870,731 10,729,565 8,729,565 15,642,155 38,035,360 3,645,382 General supply of goods and 220,916,600 7,891,170 30,547,419 49,446,131 81,905,086 169,789,800 51,126,704 services Professional services 182,825,000 6,164,824 30,690,516 25,549,770 49,657,581 112,062,691 70,762,309 Insurance & licenses 1,095,000 20,000 - - 185,000 205,000 890,000 Maintenance vehicles 3,800,000 320,000 664,100 573,800 2,525,792 4,083,692 283,692 Maintenance- others 0 399.360 446,638 33,122 674,721 1,856,841 -1,856,841 Deposit 0 - 2,191,000 2,191,000 -2,191,000 Total Expenditure (d) 202,038,618 202,038,618 -202,038,618 E Balance at closing (c-d) 83,289,548 83,289,548 -83,289,548 District NAADS Account 584,265 Sub county NAADS A/C 82,705,283

Annex 22: BUSHENYI DISTRICT LOCAL GOVERNMENT NAADS DISTRICT CONSOLIDATED FINANCIAL REPORT FINANCIAL YEAR 2005.2006 a description Annual Budget Q1 Q2 Q3 Q4 TOTAL VARIANCE EXP.TO BUDGET Opening Balance: ------district Grant collection account ------(NAADS funds)

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District NAADS collection Account 584,265 584,265 15,074,794 14,914,268 18,584,234 49,157,561 -48,573,296 Sub country NAADS Account 82,705,285 82,705,285 199,361,554 310,662,511 344,961,708 - - Sub-total (a) 83,289,548 83,289,548 214,436,348 325,576,779 363,545,942 986,848,617 -903,559,069 b Receipts/Advances: From Treasury, MFPED 891,405,000 228,850,000 216,850,000 209,479,000 236,221,000 891,400,000 5,000 District Contribution 4,736,000 - - - - - 4,736,000 Sub country contribution 44,570,250 1,655,000 160,000 15,460,000 16,713,484 33,988,484 10,581,766 Farmer contribution 15,742,750 1,757,000 2,079,750 4,035,250 4,707,000 12,579,000 -3,163,750 Deposit - 700,000 - 5,000,000 16,023,113 - - Subtotal (b) 956,454,000 232,962,000 219,089,750 233,974,250 273,664,597 959,690,597 -3,236,597 c Funds available (a+b) 1,039,743,543 316,251,548 433,526,098 559,551,029 637,210,539 1,946,539,214 906,795,666 d Expenditure incurred: ------General staff salaries 21,000,000 - 6,502,150 5,950,000 6,270,000 18,722,150 2,277,850 Allowances (travel) 11,819,265 18,805,500 29,862,020 33,312,345 57,643,142 139,623,142 22,803,877 Social contribution staff gratuity 4,200,000 - - - - 4,200,000 Committee expenses 9,427,000 691,000 1,554,000 908,000 739,000 3,892,000 5,535,000 Computer supplies 2,435,000 - 100,000 50,000 1,310,400 1,460,400 974,600 Printing, Stationary & Binding 13,416,200 2,851,565 2,656,625 5,424,700 5,684,870 16,617,760 3,201,560 Communication 12,246,765 2,139.990 1,971,265 1,767,150 2,354,700 8,233,105 4,013,650 Other utilities (fuel) 55,185,184 8,211,420 9,903,824 8,034,606 11,855,804 38,005,654 17,179,530 General supply of goods & 490,464,749 40,867,254 34,520,993 75,050,870 270,469,736 420,908,853 69,555,896 services Professional services 311,132,633 26,144,982 18,395,910 62,459,574 102,722,264 209,722,730 101,409,903 Insurance and licenses 575,000 - - - 804,243 804,243 229,243 Maintenance-vehicle - 621,300 1,811,000 830,500 3,670,099 7,032,899 7,032,899 Maintenance-others 2,841,752 682,189 671,532 870,342 946,112 3,170,175 328,423 deposit - 700,000 - 1,349,500 18,766,363 20,815,863 - Amount stolen by Sub-Accountant 3,200,00 - - 2,743,250 - 3,200,00 from the bank details attached Total Expenditure (d) 1,039,743,548 105,015,200 107,949,319 196,007,587 483,236,868 889,006,474 147,534,574 e Balance at closing c-d 211,236,348 325,576,779 363,543,442 153,973,671 District NAADS Account 15,074,794 14,914,268 18,584,234 2,097,125 Sub county NAADS Accounts 196,161,554 310,662,511 344,959,208 -151,876,546

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Annex 23: Bushenyi local government NAADS District Consolidated Financial Report District Bushenyi Financial Year 2004/2005 code Description Annual Q1 Q2 Q3 Q4 Total Variance Exp. To Budget Budget a Opening Balance: - - - - District NAADS Account 278,548 334,738 1,176,251 10,058,891

Sub County NAADS Account 1,789,690 21,328,775 105,107,252 141,281,074 Sub Total (a) 2,068,238 21,663,513 106,283,503 151,339,965 B Receipts/Advances: From Treasury, MFPED 512,200,000 58,558,000 184,737,000 140,855,000 128,050,000 512,200,000 District Contribution 3,770,000 - 3,020,000 5,000,000 - 8,020,000 - 4,250,000 Sub County contribution 23,660,000 1,280,000 375,000 8,250,000 4,428,201 14,333,201 9,326,799 Farmer contribution 9,490,000 575,000 1,265,000 2,992,000 1,510,000 6,342,000 3,148,000 Deposit - - - 2,191,000 - 2,191,000 - 2,191,000 Subtotal (b) 549,120,000 60,413,000 189,397,000 159,288,000 133,988,201 543,086,201 6,033,799 C Funds available (a+b) - 62,413,000 211,060,513 265,571,503 285,328,166 824,441,420 - 824,441,420 D Expenditure incurred: General Staff Salaries 25,200,000 5,250,000 5,250,000 7,000,000 3,499,500 20,999,500 4,200,500 Allowances (Travel) 58,260,000 14,499,840 21,955,634 16,507,600 34,981,390 87,944,464 29,684,464 Social contributions staff 4,208,400 - - 2,100,000 3,850,000 5,950,000 1,741,600 gratuity Committee expenses 2,980,000 169,000 439,000 175,200 475,200 1,258,400 1,721,600 Computer supplies 765,000 4,000 4,500 - - 8,500 756,500 Printing, Stationary, 10,870,000 2,345,700 2,693,872 2,578,750 1,712,393 9,339,715 1,530,285 Photocopying & binding Communication 3,810,000 883,000 1,292,400 1,234,600 4,729,800 8,139,800 4,329,800 Other utilities (fuel) 34,390,000 2,870,731 10,729,565 8,729,565 15,642,155 38,035,360 3,645,382 General supply of goods and 220,916,600 7,891,170 30,547,419 49,446,131 81,905,086 169,789,800 51,126,704 services Professional services 182,825,000 6,164,824 30,690,516 25,549,770 49,657,581 112,062,691 70,762,309 Insurance & licenses 1,095,000 20,000 - - 185,000 205,000 890,000 Maintenance vehicles 3,800,000 320,000 664,100 573,800 2,525,792 4,083,692 283,692 Maintenance- others 0 399.360 446,638 33,122 674,721 1,856,841 -1,856,841 Deposit 0 - 2,191,000 2,191,000 -2,191,000

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Total Expenditure (d) 202,038,618 202,038,618 -202,038,618 E Balance at closing (c-d) 83,289,548 83,289,548 -83,289,548 District NAADS Account 584,265 Sub county NAADS A/C 82,705,283

Annex 24: KYAMUHUNGA SUB-COUNTY LOCAL GOVERNMENT: NAADS SUB-COUNTY FINANCIAL REPORT FOR PERIOD: APRIL-JUNE 2006 CODE DESCRIPTION ANNUAL Q1 Q2 Q3 Q4 TOTAL VARIANCE BUDGET Opening Bal S/S NAADS 9,662,587 9,662,587 7,755,806 18,070,567 22,057,261 A/C RECEIPTS/ADVANCES: Transfers from the District 76,307,000 10,107,000 23,398,000 17,543,000 25,259,000 76,307,000 - Sub-County Contributions 3,713,000 770,000 1,000,000 1,943,000 - 3,713,000 - Farmers’ Contributions 4,234,500 1,406,000 1,357,000 1,217,500 254,000 4,234,500 - SUB-TOTAL 84,254,500 12,283,000 25,755,000 20,513,000 25,513,000 84,254,500 - FUNDS AVAILABLE 93,917,087 21,945,587 33,510,806 38,774,067 47,570,261 84,254,500 - Expenditure Allowances 4,479,080 918,000 1,382,000 1,127,940 1,051,140 4,479,080 - Committee Expenses 137,000 63,000 - - 74,000 137,000 - Computer suppliers ------Printing, stationery & 1,290,000 398,700 263,400 59,000 611,100 1,232,200 57,800 Photocopying Fuel, Lubricants & Oils 3,207,992 496,000 616,000 1,295,993 799,999 3,207,992 - General supply of goods & 58,406,856 9,732,150 9,249.160 7,036,793 27,487,722 53,505,825 4,901,031 services Professional services 25,470,359 2,254,000 3,744,800 7,008,874 8,095,685 21,103,359 4,367,000 Communication 240,750 - 120,000 60,000 60,750 240,750 - Insurance & License 95,000 95,000 - - - 95,000 - Vehicle Maintenance & 230,050 132,250 65,500 32,000 - 229,750 300 operation

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Maintenance(Others-Bank 360,000 100,681 99,379 96,206 60,034 356,300 3,700 charges) TOTAL EXPENDITURE 93,917,087 14,189,781 15,440,239 16,716,806 38,240,430 84,587,256 9,329,831 BALANCE AT CLOSING - 7,755,806 18,070,567 22,057,221 9,329,831 - - (C/F)

Annex 25: BUSHENYI DISTRICT LOCAL GOVERNMENT NAADS SUB-COUNTY FINANCIAL REPORT FOR APRIL-JUNE 2007: BITEREKO SUB- COUNTY Description Annual Budget Quarter 1 July- Quarter 2 Oct-Dec Quarter 3 Jan- Quarter 4 April- Total Variance Exp. Sept March June To Budget Opening Balance - - 6,728,850 17,946,480 20,367,295 Sub-county NAADS A/C - - - - - Sub-Total (a) - - 6,728,850 17,946,480 20,367,295 Receipt/Advances - - - - - From Treasury MFPED 48,713,000 9,794,000 15,476,000 11,591,000 12,201,000 49,062,000 349,000 Sub- County Contribution 5% 2,620,900 50,000 - 2,036,269 534,700 2,620,969 69 Farmers Contribution 1,084,100 - 1,000,000 - 370,000 1,370,000 285,000 Sub-Total (b) 52,418,000 9,844,000 16,476,000 13,627,269 13,105,700 53,052,969 634,069 Funds Available (a+ b) 52,418,000 9,844,000 23,204,850 31,573,749 33,472,995 98,095,594 634,069 Expenditure Incurred Allowances 27,200,000 2,176,000 3,957,500 3,572,500 18,432,649 28,138,649 (934,069) Committee Expenses - - - - - Computer suppliers - - - - - Stationery & Printing 2,563,000 277,000 856,500 305,250 1,889,706 3,328,456 (765,456) Communication 780,000 - 135,000 20,000 489,000 644,000 136,000 Fuel Lubricants & Oils 5,111,600 400,650 159,560 262,000 - 822,210 4,289,390 Professional Services - - - - - General supply of goods & 13,000,000 - - 6,888,690 8,464,595 15,353,285 (2,353,285) services Vehicle maintenance 2,845,000 261,000 - 120,000 153,000 534,000 2,311,000 Maintenance & others/Bank 918,400 - 149,810 38,041 131,100 318,924 599,476

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charges Total Expenditure (d) 52,418,000 3,114,650 5,258,370 11,206,454 29,560,050 49,139,524 (3,278,476) Balance at closing - 6,729,350 17,946,480 20,367,295 3,912,945 48,956,070 3,912,545

Annex 26. DEVELOPMENT BUDGET ON SELECTED PROJECTS/LINE ITEMS 2006/2007

Shs (’000) Budget Releases % Share 211101 General Staff Salaries 211102 Contract Staff Salaries (incl. casual) 151,400,000 143,851,014 1.29 211103 Allowances 942,400,000 890,337,235 8.01 221002 Workshops and Seminars 113,300,000 98,859,677 0.89 221011 Printing, Stationery, Photocopying etc 80,000,000 80,000,000 0.72 222001 Telecommunications 56,000,000 46,442,000 0.42 224001 Medical and Veterinary Supplies 1,352,000,000 5,180,815,800 46.59 224002 General Supply of Goods and Services 418,200,000 402,806,753 3.62 227001 Travel Inland 0.00 227002 Travel Abroad 0.00 227004 Fuel, Lubricants and Oils 405,000,000 364,300,576 3.28 228001 Maintenance - Civil 0.00 228002 Maintenance-Vehicles 104,000,000 87,200,965 0.78 228003 Maintenance of Machinery, Equipment 0.00 312206 826,600,000 619,950,000 5.57 8,263,600,000 11,120,441,351

The selected projects: FITCA, NSADP, Livestock Disease Control, NLPIP, Support to Fisheries Development, VODP, FIFCO Source: Planning Department and discussions with MAAIF Staff.

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Annex 27 MAAIF RECURRENT BUDGET PERFORMANCE ON SELECTED ITEMS 2006/07

Total Approved Details of Account Budget Releases % Eff % Share 211101 General Staff Salaries 2,408,177,000 2,086,181,955 86.63 25.53 211103 Allowances 288,940,000 226,454,550 78.37 2.77 221003 Staff Training 39,793,000 9,559,579 24.02 0.12 221011 Printing, Stationery, Photocopying etc 130,681,000 122,957,625 94.09 1.50 222001 Telecommunications 231,527,000 230,027,000 99.35 2.82 224002 General Supply of Goods and Services 68,275,000 50,064,969 73.33 0.61 227001 Travel Inland 267,030,000 183,574,901 68.75 2.25 227002 Travel Abroad 237,597,000 179,351,638 75.49 2.19 227004 Fuel, Lubricants and Oils 215,320,000 183,052,621 85.01 2.24 228001 Maintenance - Civil 4,512,000 1,568,213 34.76 0.02 228002 Maintenance-Vehicles 202,685,000 167,702,884 82.74 2.05 228003 Maintenance of Machinery, Equipment 122,903,000 100,766,039 1.23 1.23 Total Recurrent Budget 9,398,177,000 8,171,096,982 100.00

Note: This covers the 10 department Source: Department of Planning and discussions with MAAIF Staff.

Annex 28 Detailed Recurrent Budget Performance for Financial Years U.Shs.bn ’05/06 0607 07/08 Prog Description Budget Actual Unspent Perf% Budget Actual Unspent Perf% Budget Actual Unspent Perf%

1 Headquarter 4.248 3.457 0.791 81.4 3.7024 3.652 0.215 98.6 2.642 2.312 0.331 87.5

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2 Directorate 0.058 0.044 0.014 75.9 0.0411 0.036 0.0045 87.6 0.038 0.0155 0.023 40.8 of Crop Resources 3 Farm 1.081 1.049 0.032 97 1.12 1.07 0.05 95.5 1.45 1.441 0.009 99.4 Development 4 Crop 0.784 0.713 0.071 90.9 0.834 0.765 0.069 91.7 0.813 0.474 0.34 58.3 protection 5 Crop 1.463 1.423 0.04 97.3 0.197 0.172 0.251 87.3 0.207 0.198 0.01 95.7 Production 6 Directorate 1.417 1.392 0.025 98.2 1.205 1.183 0.0212 98.2 1.325 1.322 0.003 99.8 of Animal Resources 7 Animal 0.939 0.917 0.022 97.7 0.909 0.853 0.056 93.8 0.889 0.885 0.004 99.6 Production 8 Livestock 0.584 0.586 -0.002 100 0.562 0.507 0.055 90.2 0.562 0.526 0.036 93.6 Health and Entomology 9 Fisheries 0.567 0.425 0.142 75 0.587 0.367 0.22 62.5 1.934 1.054 0.881 54.5 Resources 10 Agricultural 0.269 0.26 0.009 96.6 0.33 0.29 0.04 87.9 0.295 0.207 0.088 70.2 Planning Total 11.41 10.266 1.144 89.9 9.4875 8.895 0.9817 93.8 10.155 8.4345 1.725 83.06

Report of MAAIF on Budget Performance,2007/08

Annex 29

Vote Function: 01 Finance and Administration

Ushs Billion Programme/Project Donor 2005/06 2006/07 2007/08 Recurrent Donor Local Donor Local Donor Local 01 Headquarters GoU 1.745 1.933 2.117 Total Recurrent 1.745 1.933 2.117 Development Support for Institutional 0076 Development GoU 0.834 0.984 0.646

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Total Development 0.834 0.984 0.646 Total Finance and Administration 2.579 2.917 2.763

Annex 30

Vote Function: 02 Planning

Ushs Billion Programme/Project Donor 2005/06 2006/07 2007/08 Recurrent Donor Local Donor Local Donor Local 10 Department of Planning GoU 0.275 0.295 0.294 Total Recurrent 0.275 0.295 0.294 Development Agriculture Sector Programme 0074 Support Den/GoU 0.315 0.100 1.144 0.102 Development of early warning 0081 systems GoU 2.126 0.400 0.4 0092 Rural Electrification GEF/IDA/GoU 1.426 0.340 1.073 0.305 0.725 0.263 Supervision, Monitoring and 0094 Evaluation GoU 0.353 0.197 0.137 Plan for National Agriculture 1008 Statistics GoU 0.080 Total Development 1.426 2.819 1.388 1.002 1.869 0.982 Total Planning 4.520 2.685 3.145

Annex 31

Vote Function: 03 Crops Ushs Billion

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Programme/Project Donor 2005/06 2006/07 2007/08 Recurrent Donor Local Donor Local Donor Local 02 Directorate of Crop Resources GoU 0.044 0.037 0.038 03 Farm Development GoU 1.049 1.070 1.450 04 Crop Protection Department GoU 0.713 0.765 0.813 05 Crop Production Department GoU 1.423 0.172 0.207 Total Recurrent 3.230 2.044 2.508 Development Agricultural Marketing Promotion and 0077 Regional GoU 4.977 0.243 0.200 0.200 NW Small holder Agricultural 0088 Development ADF/GoU 11.472 0.472 5.625 0.156 2.761 0.156 0089 Support for Irrigation GoU 0.340 0.250 0104 Support for Tea Cocoa Seedlings GoU 1.540 0.696 0.854 0106 Vegetable Oil Development Project IFAD/GoU 9.856 1.986 6.551 0.250 6.929 2.250 0968 Farm Income Enhancement Project ADF/GoU 5.275 0.142 9.104 0.142 0970 Crop Disease and Pest Control FAO/DEN/ADB/GoU 0.659 0.321 0.659 0.791 Transboundary Agrosystem 1007 Management WFP/GoU 1.600 0.015 1009 Sustainable Land Management Project UNDP/GoU 0.838 0.090 Agriculture Production, Marketing & 1010 Regulation WFP/GoU 0.218 0.130 Dissemination NERICA and Improved 1011 Rice WFP/GoU 0.992 0.050 Integrated Pest and Disease 1012 Management WFP/GoU 0.258 0.156 Total Development 26.305 4.241 18.110 2.105 23.359 5.084 Total Crops 33.776 22.259 30.951

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Annex 32

Vote Function: 04 Animal Resources Ushs Billion Programme/Project Donor 2005/06 2006/07 2007/08 Recurrent Donor Local Donor Local Donor Local Directorate of Animal Resources GoU 1.392 1.183 1.325 Animal Production Department GoU 0.917 0.853 0.889 Livestock Health and Entomology GoU 0.586 0.507 0.562 Fisheries Resources Department GoU 0.425 0.367 2.184 Total Recurrent 3.320 2.910 4.960 Development Farming in Tsetse Areas of E.Africa EU/GoU 3.532 0.134 1.386 0.242 0.638 0.512 Livestock Disease Control Eu/GoU 1.757 2.920 1.998 2.134 1.547 1.399 National Livestock Production Improvement ADF/GoU 11.827 0.824 13.184 0.500 15.564 0.450 Support to Fisheries Development ADF/GoU 5.910 1.357 8.442 0.425 14.340 0.395 Creation of Tsetse and Tryp Free Areas ADB/GoU 1.520 0.050 1.382 0.094 Total Development 23.026 5.235 26.530 3.351 33.471 2.850 Total Animal Resources 31.581 32.791 41.281

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ECONOMIC POLICY RESEARCH CENTRE DISTRICT QUESTIONNAIRE INTRODUCTION EPRC on behalf of World Bank and MAAIF is undertaking PER study covering the years 2005/06, 2006/07 and 2007/08. This analysis will examine the Recurrent and Development Budgets of the Local Governments specifically on the following projects (Livestock Disease Control, NLPIP, NAGRIC&DB, Support for Irrigation, Vegetable Oil Development, Agriculture and Market Support, NW & Smallholder Project, FITCA, Fisheries Development Project and the semi-autonomous organizations e.g. NAADS, UCDA, CDO).

Q1: Provide the budgetary estimates and actual allocations per project using the table below:

District Name Project Name Project coordination office FY 2005/2006 2006/2007 2007/2008 Capital Budget Recurrent Budget District Arrears Total

Q2a. Provide a detailed Recurrent Budget and its actual using the table below: District Name Project Name FY 2005/2006 2006/2007 2007/2008 Total Est. Actual Est. Actual Est. Actual

Employee costs

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ƒ wage ƒ Non-Wage Goods and services Allowances Welfare and entertainment Fuel and lubricants Maintenance

Q2b. Provide a detailed breakdown of the goods and services procured over the period. (Specify 2005/06; 2006/07; 2007/08)

Item number Unit cost Total Cost

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Q3a. Provide details on the Development Budget using the table below.

Line Item 2005/2006 2006/2007 2007/2008 Total % of Total Total Dev Budget Est. Actual Est. Actual Est. Actual Est. Actual Est. Actual

Capital 1. 2. 3. 4. Wage Recurrent Non-wage recurrent • Goods and services • e.g. veterinary drugs, training etc. • Allowance

• Any other • • •

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• •

Q3b. Provide the detailed breakdown of the goods and services procured in each respective year.

Item Number Unit cost Total

Q4. Provide the sector budgets and actual over the three years. Department 2005/2006 2006/2007 2007/2008 Total % of Total Estimate Actual Estimate Actual Estimate Actual Estimate Actual Estimate Actual • Agriculture • Veterinary • Forestry • Fisheries • Works • Health • Education • • • • • •

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Q5. Using the table below, provide the economic composition across the sectors over the three years.

Economic Composition Across Sectors

Department 2005/2006 2006/2007 2007/2008 Total % of Total Capital • Crop • Livestock • Fisheries • Cross cutting • etc Wage recurrent • Crop • Livestock • Fisheries • Cross-cutting • etc Non wage recurrent • Crop • Livestock • Fisheries • Cross cutting • etc Total

6 a. Basing on the table below, provide the relevant information project by project over the three years (e.g. ADB, EU, World Bank, GoU, etc.)

Project Name Source of Line Item 2005/2006 2006/2007 2007/2008 Funding e.g. ADB Budgeted in project Appraisal document (PAD) • Funds released to District • Funds utilized by District

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• Funds transferred to sub- counties. District (Co- • Funds approved. funding) • Funds released to Department • Funds utilized. Total Funds utilized by District

Q6. b. For any transfer of funds to sub-county, please provide the estimate and actual allocation for each over the years.

Project Name Sub County Name Source of Funding Line Item 2005/2006 2006/2007 2007/2008 e.g. ADB Budgeted • Funds released to Sub county • Funds utilized by Sub County Sub County (Co- • Funds released to funding) Department • Funds utilized. Total Funds utilized by Sub County Q7. Indicate implementation arrangements under the project.

Q8. What are the achievements of the project both tangible and not tangible?

Q9. What are the challenges in the project implementation?

Q10. Make a comparison between donor funded projects and GoU projects.

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Q11. Indicate key outputs in the table below: Unit costs, number of outputs procured/received and amount.

Out 2005/06 2006/07 2007/08 puts Amount Unit Amount Amount Unit Cost Cost

Q12.a What are the allocation criteria of the planned deliverables? Who are the beneficiaries per sub-county by gender, income, farm size, parish and village?

Q12.b What is the proportion of expenditure on public and or private goods?

Q13.a Comment on the procurement process both at the district and centre.

Q13.b what is your comment on the benefits from this project?

Q14. In relation to the project, what is your mandate, responsibilities? What is your local budget allocation and performance per year?

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Q15. For the projects you have executed, indicate the sustainability arrangement?

Q16. Provide complete budgets for the financial years 2005/06, 2006/07 and 2007/08 and indicate estimate and actual allocations.

Department 2005/06 2006/07 2007/08 Estimate Actual Estimate Actual Estimate Actual • Administration • Boards and Commissions. • Council • Production and extension services • Community Based Services • Finance and planning • Health • Education • Technical services • Natural resources

Thank you very much

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Agriculture Sector Public Expenditure Review

TERMS OF REFERENCE

Phase 3: Efficiency and Effectiveness of Agricultural Expenditures

1. Background

The Ministry of Agriculture, Animal Industry and Fisheries, with support from the World Bank and DFID, are undertaking an Agriculture Sector Public Expenditure Review (Ag PER). The rationale for this Ag PER is based on the premise that the national budget is under increasing stress with, on the one hand, demands to respond to large unforeseen crises or other government obligations, and on the other, limited progress on domestic revenue generation combined with the need for prudent macro-economic management of aid flows. Given the annual cycle of complaints about insufficient budgetary allocations by sector ministries and implementing agencies that accompany the annual budget cycle, there are increasing calls for additional analyses to help prioritize expenditures to sustain aggregate and agricultural growth and poverty reduction. In particular, the Ministry of Finance, Planning and Economic Development (MFPED) is constantly challenging line Ministries for value-for-money analyses of current expenditures as a basis for considering increased budgetary allocations. Unfortunately, because of weak information bases, the annual sector Budget Framework Papers fall far short of providing adequate information on how the previous years expenditures were spent or what was achieved and at what cost to enable a more educated allocation for the coming year. As a result, with few exceptions, annual budgets and MTEF ceilings present only marginal incremental changes irrespective of emerging sector priorities.

This shortcoming is also realized by the top leadership in the Ministry of Agriculture, Animal Industry and Fisheries (MAAIF), who are concerned about insufficient space to align the ministry’s expenditures to high priority activities as laid out in the MAAIF Development Strategy and Investment Plan (DSIP). The budget received by MAAIF is by and large already pre-allocated to specific activities, either as budgets for the core agencies (NARO and NAADS) or as allocations to activities agreed to under different projects that the government is committed to. MAAIF thus has a strong interest in a comprehensive PER for the sector, both to better align future expenditures to its priorities and also to “make the case” for an appropriate level of funding for the sector.

The demand for this PER comes from several other quarters as well. It is part of a larger annual Public Expenditure Review, a core diagnostic, undertaken collaboratively by the Government and the World Bank. For 2006/07 and following year, the PERs will focus on strategic prioritization across sectors, assessing the scope for additional expenditures or “fiscal space” to meet high priority expenditures and public investments, and the fiscal

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Additional justification for an agriculture sector PER follows the call from NEPAD to its member states to allocate 10% allocation of their annual budgets to agriculture, an agreement signed on to by the African Heads of State. Such prescriptive allocations however need to be approached with caution, as the quality of expenditures is of equally if not more important than the total volume of resources spent. Under the CAADP Pillar of NEPAD, one of the first tasks under individual country programs is to undertake a public expenditure review to document the extent, nature and quality of expenditures on agriculture. Uganda is one of the first five pilot countries for implementing the CAADP Pillar and has committed itself to conducting an agricultural PER in the coming year.

Finally, development partners, (mainly DFID and the World Bank), is increasingly concerned about the low levels of investment and expenditures in agriculture despite strong evidence that agriculture expenditures yield high returns and are strongly linked to poverty reduction. The underlying concern is that despite the roles of public and private sectors in stimulating productivity and pro-poor growth, it is increasingly being recognized that there is a legitimate role for public expenditures in creating the appropriate enabling environment for growth and poverty reduction. And while this role will evolve with stages of development, given the current state of agriculture development in countries like Uganda, there are several reasons that may justify a pro- active government role in promoting agricultural growth. This is through creating the policy and institutional environment for better decision making, but also in financing certain types of investments to foster agricultural growth. Yet, accessible evidence on which public expenditures work best for pro-poor agricultural growth is limited at best. Ministries of Agriculture also lack the tools and capacity to make and influence key public expenditure management decisions in a manner consistent with the changing modalities of aid, namely budget support, and principles of the Monterrey Consensus.

To address some of these gaps, DFID and the World Bank have established a global program to analyze and disseminate evidence on the levels and patterns of public expenditures that stimulate pro-poor market-driven agricultural growth. Uganda has been selected as one of the case study countries for this program, based on the demand for such a study expressed by the government (both MFPED and MAAIF), and the local development partner group (and in particular the DFID and World Bank country offices) and the Regional Strategic Analysis and Knowledge Support System (ReSAKSS) node for Eastern and Central Africa which is mandated by COMESA to monitor agricultural sector spending by governments in the region. The rationale is to assess the robustness of the agricultural public expenditure management system to maximize development effectiveness of scarce resources; align public expenditures to national priorities; and “make the case” for the need and absorptive capacity for additional expenditures targeted at high priority expenditures. This budget and expenditure review and tracking exercise further relates to overall aim of implementation of Maputo pledge of 10% budget allocation to agriculture with a broader objective of achieving and sustaining the 6% growth target for the sector.

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2. Objective

The overall objective of Ag PER is to conduct a comprehensive review of public expenditures in the agriculture sector to help identify the types of expenditure that are best for pro-poor growth. The agriculture sector is broad. To identify the scope of the study, and to be consistent with the NEPAD/CAADP defintions of the sector, the guidance of the Agriculture Sector Working Group is to focus on agriculture as defined in the Core Areas of Government Functions Relevant to the Agriculture Sector Based on Classification of Functions of Government (COFOG). An important objective of this undertaking is to assist MAAIF to undertake further PER work in the sector, and provide the tools and methods to support this. The rationale, design and implementation details for the Ag PER are given in the attached Concept Note.

The first two phases of the Ag PER have been completed. This study will provide the analysis for the third phase, focussing on the quality of public expenditures.

3. Phase 3: Effectiveness and Efficiency of Agricultural Public Expenditures.

Scope: This study will assess how well are the expenditures being used, and what expenditures are most effective in promoting pro-poor growth. It will focus on three areas of interest: value-for-money, benefits incidence, and impacts on poverty and growth.

• Value for Money: the following questions should be answered. o Is the balance between operational, salary and investment expenditures appropriate to deliver outputs and results? o How much of the money makes it to where it is supposed to go, what are issues and constraints in the financing channels – public expenditure tracking o Are the final expenditures in line with allocations and what is the money being actually spent on – public expenditure tracking o Cost effectiveness in the delivery of goods and services o What percentage of the outturn is spent on delivery of final services, as opposed to overheads and other expenditures o What percentage of expenditure is on public versus private goods, and is this consistent with government policy

• Benefit incidence analysis: o Identify the nature of benefits financed by public funds o What is the benefit incidence of major items of public expenditure, that is, who benefits from public goods and services – by geographic location with particular emphasis on remote rural areas, income category, farm size, gender, etc. o Can public goods and services be better targeted to maximize development impact?

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• Effectiveness and efficiency of public expenditures o Develop the cost-effectiveness in the provision of agricultural goods and services (e.g., by estimating unit-cost coefficients for goods and services) and main sources of inefficiency in these expenditures. o Qualitatively assess the usefulness and impact of alternative expenditures as viewed by the beneficiaries o Make recommendations on how to improve agricultural services, including through a reallocation among activities and sectors to improve the efficiency of government spending.

The consultants will work closely with MAAIF staff in the Policy and Planning Department, to ensure that they become familiar with the tools, methods and approaches used in the study and able to undertake similar analyses in the future.

The Recipient: The Ministry of Agriculture, Animal Industry and Fisheries will be the principal recipient and Ministry of Finance, Planning and Economic Development as well as the Agriculture Development Partners group will be the alternate recipients.

Method: The study will use qualitative methods to provide insights and answers to the key questions listed above. It will be complemented by findings from an independent, household survey based, quantitative impact evaluation of the agricultural technology and advisory services. The evaluation is being undertaken by IFPRI, specifically to assess the impact of NAADS, which commands the largest share of agriculture sector expenditures in Uganda. The survey instrument will incorporate additional questions so as to provide insights to the benefit incidence of other public expenditures.

This study will primarily focus on the implementation of two tools: a Public Expenditure Tracking Survey (PETS), and Community Scorecards (CSC). The details on these tools, the methodology and approach to be used are briefly presented in the attached proposal from the Economic Policy Research Center (EPRC). EPRC was identified to submit a proposal based on its strong experience in and pioneering in the development of tools to conduct such analyses, and has undertaken similar studies in other sectors (primarily health and education).

Administrative and Reporting arrangements: The study will be undertaken by consultants working under the overall guidance of the Agriculture Sector Working Group (SWG). Management of the study will be by a technical sub-committee appointed by the SWG and chaired by the Permanent Secretary, MAAIF. Management of the work by MAAIF on a day to day basis will be undertaken by the national CAADP focal point. All reports shall be submitted to the following;

Permanent Secretary/Chair Ag. SWG/Chair Technical Committee on PER Ministry of Agriculture, Animal Industry and fisheries,

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P. o. Box 102 Entebbe UGANDA

With copies to the DFID Uganda country office and the World Bank Country office.

The consultants will provide the SWG with an inception report in 1 week of the start of the assignment. The inception report will be presented at a half day workshop with key agencies and departments of MAAIF to explain the approach to be taken, identify key design issues, lay out the key milestones in the delivery of the final report, and the structure of the final report.

Timeframe: The work will begin on or about October 1 and will run for about 12 weeks.

Donor Co-ordination: Coordination with the DFID country office will be jointly by the Livelihoods Adviser together with the Assistant Economics Adviser and by the Lead Economist in the Sustainable Development Department -Africa Region for World Bank, Uganda Country Office.

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Annex 26: THE STATUS OF RURAL INFRASTRUCTURE PROVISION UNDER NORTH WEST AGRICULTURAL DEVELOPMENT PROJECT AND SUPPORT TO FISHERIES BY MAAIF AS OF 18TH OF AUGUST 2008

This is the construction site of Ejupala market in Arua district which together with Rhino camp market were awarded at Sh.1,322,748,388. The commencement of works was on 22nd June 2007 and completion date was 21st November 2007. Time so far spent is 250% with assumed 45% physical work covered and 45% of the contract sum paid,(source: Monitoring and Evaluation Report, 2008).

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This is also a construction site of Ejupala market in Arua district. The state of infrastructure shows lack of financial capacity as this section lacked building materials with presence of idle labourers. The time frame is the same as this is a part of the above section, (source: Monitoring and Evaluation Report, 2008).

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This is another section of the Ejupala market in Arua district

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This is the construction site of Nyadri market in Arua district which was awarded together with Kubala market at Sh.1,420,075,226 and works commenced on 22nd June 2007. The completion date was originally set at 21st November 2007 but so far 250% of the time has been spent, on assumed 50% of physical work done and 47% of the contract sum paid.

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This is another section of Nyadri market in Arua market. The activities at this site indicated lack of financial capacity as the progress was quite slow and behind schedule.

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This is another section of Nyadri market.

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This is the construction site of Kubala market and works commenced on 22nd june 2007 and completion date was set on 21st November 2007. The physical progress was assumed to be 50% with 250% of the time spent and 47% of the contract sum paid.

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This is Kubala market in Arua district which was awarded at Sh.1,420,075,226 together with Nyadri market and the commencement date was 22nd June 2007 and completion date was set 21st November 2007. The report indicates that 50% of physical work was covered over 250% of the time spent and 47% of the contract sum paid.

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This is also a section of Kubala market

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This is the construction site of Odoma bridge in Arivu sub-county in Vurra County, Arua district. It was together with Katu bridge awarded at Sh.486,310,000 and varied to Sh.558,240,000. The commencement date was 14th November 2006 and completion date was set on 13th April 2007 but because of failure to meet the decline, an extension was granted up to 13th August 2008. The physical works covered was assumed to be 70% over 320% of the time spent and 72% of the financial performance covered,(source: Monitoring and Evaluation Report, 2008).

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This is a section of Odoma Bridge and there is a clear indication that this site was abandoned

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This is Arivu-Jayia-Opia community access road, a section covering 10.6km in Arivu sub-county in Vurra County, Arua district. It was awarded at a cost of Sh.772,330,900 together with Nyadri-Tara covering a stretch of 14.4km. The physical progress on this road was assumed to be 90% with 400% of the time spent and 77% of financial progress made (source: Monitoring and Evaluation Report, 2008). The commencement date was 14th November 2006 and original completion date was set on 13th march 2007 but was later extended to 13th July 2008 and the works were still incomplete.

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This is another section of Odoma Bridge in Arivu sub-county in Vurra County in Arua district

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This is a section of Arivu-Jayia- Opia community access road in Arivu sub-county in Vurra County, Arua district. The gravel thickness was not achieved as well as the compacting was not done.

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This is Aya Bridge in Yumbe district which was contracted at Sh.360,052,000 together with Kilaji bridge. The commencement date was 14th November 2006 but this project has not been completed and extension was made up to 13th August 2008. The report indicates that 97% of physical work was covered over 160% of the time spent and 98% of the contract sum paid. The bridge was poorly constructed as there are indications of inadequate assessment of the nature of bridge to be constructed.

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This is Mongoya-Oya road in Yumbe district which was contracted at Sh.294,812,157 together with Majale-Kilaji road. The road is currently impassable as the works were not done as per the specifications e.g. gravelling and compacting. The commencement date was 14th November 2006 and original completion date was 13th march 2007. An extension was granted up to 13th June 2007 and this road is assumed to have been 100% completed.

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This is another section of Mongoya-Oya road, Yumbe district. Commencement date: 14th November 2006. The gravel thickness was not achieved as well as the compacting was not done.

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This is Odoma bridge in Arivu sub-county in Vurra county, Arua district: Commencement date: 14th August 2006, 320% time spent; assumed 70% physical progress and 72% of contract sum paid.

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This is Kilaji Bridge in Yumbe district which was awarded together with Aya bridge at a cost of Sh.360,052,000. The commencement date was 14th November 2006 and original completion date was set on 13th April 2007 but was later extended to 13th August 2008. The report indicates that 97% of the physical work was covered over 160% of the time spent and 98% of the contract sum paid. It is clear that contractor failed to work on the approaches

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Kubala market, Arua district. Date of commencement: 5th September 2007

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Odoma bridge in Arivu sub-county in Vurra county, Arua district

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This is a water supply system project in Yumbe district which was awarded at Sh.328,597,500 and commenced on 1st February 2008 and schedule to end on 31st May 2008. Specifications were not met i.e. according to the engineers that water tank was to be placed at 10m of height and this is church land which attracted resistance from the priest. The report indicates that 90% of physical work was covered over 100% of the time spent and 85% of the contract sum paid.

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This is Kubala market, Arua district. Date of commencement: 5th September 2007

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This is a section of the construction site of Lodonga market in Yumbe district which was awarded at Sh.619,490,892 and works commenced on 22nd June 2007.

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Construction site of Lodonga market in Yumbe district: commencement date: 22nd June 2007. The physical progress covered was 65% over 250% of the time spent and 70% of financial progress met.

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Construction site of Lodonga market in Yumbe district: commencement date: 22nd June 2007

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This is one of the bridges in Yumbe district which were still incomplete and also very narrow.

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This is Lurujo road (14.9km) which was awarded at Sh.643,351,082 together with Keri- Pamodo road (14.1km)in Lurujo sub-county in Koboko district was still incomplete. The commencement date was 14th November 2006 and completion date was scheduled on 13th march 2007. However, the contractor failed to finish the works in time and an extension was granted up to 13th July 2008 but still the works were incomplete. It is reported that 55% of physical works were covered, 270% of the time spent and 67% of financial progress met. The contractor also failed to pay the local communities which executed the casual work i.e. opening the drainage systems, bush clearing etc. The gravel thickness under this road was not achieved as the contractor refused to take up the recommendations from the district engineer. The culverts were also not installed as seen in the picture.

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This is one of the fish ponds in Nkoma village, Mbale district which was awarded at Sh.40 million. The contractor was paid 20% of the contract sum and no work was done. The site was later abandoned by the contractor before carrying out any meaningful work

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This is still Moinya Bridge in Adjumani district. The site was abandoned and this is explained by the vegetation around.

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This is another section of Moinya Bridge.

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This is one of the sites that were abandoned by the contractor in Adjumani district

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This is one of the markets being constructed in Adjumani and it shows that there are more lock-ups than open shades. The beneficiary districts claim that the design of the markets will limit the utilization as famers prefer open shades than lock-ups.

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This is Leya 2 bridge in Moyo district which was awarded at Sh.435,613,750 together with Leya 1 and the commencement date was 14th November 2006. The completion date was set on 13th April 2007 but was later extended to 13th August 2008. The report indicates that 80% of physical work was covered over 320% of the time spent and 89% of the contract sum paid. This is one of the poorly constructed bridges and still incomplete which reveals lack of technical capacity

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Leya 1 Bridge in Moyo district

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This is Leya 2 bridge in Moyo district and it reveals that works was still incomplete e.g. lack of gabion boxes, approaches were still undone. The report still indicates that 80% of physical work was covered over 320% of the spent and 89% of the contract sum paid.

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This is another bridge in Koboko district.

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Katu Bridge on Atu River in Koboko district. This box culvert was tested and found to be very weak. This contractor lacks both financial and technical capacity to handle works of such magnitude.

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This is one of the sites where culverts were not installed along Lurujo-Nyai road in Koboko district. The road contractor was not on site, and the district could neither install the missing culverts nor make temporary provision as the management of the road was still in the hands of the contractor. This road was awarded at Sh.643,351,081 together with Keri-Pamodo road and the commencement date was 14th November 2006 and original completion date was set on 13th November 2007 but was later extended to 13th September 2008. The report indicates that 55% of the physical work was covered over 270% of the time spent and 67% of the contract sum paid.

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This is Katu Bridge which awarded together with Odoma bridge at a cost Sh.486,310,000 but the works so far carried were tested and proved to be weak. This contractor lacked knowledge and capacity to handle such works. He abandoned the site. The commencement date was 14th November 2006 and completion date was set on 13th April 2007 but was later extended to 13th August 2008 but still incomplete, (Source: Monitoring and Evaluation Report, 2008).

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This is Ojong Bridge 1 along Aberi-Zombo road in Nebbi district which together with Ojong bridge 2 and Ojong bridge 3 were awarded at Sh.591,382,059. The commenced date was 14th November 2006 and original completion date was 13th May 2007 but was later extended to 13th September 2008 but still incomplete. The report indicates that 85% of the work covered over 270% of the spent and 87% of the contract sum paid. This bridge was poorly built, lacks gabion boxes, very narrow and still impassable.

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This is another Ojong bridge along Aberi-Zombo road still impassable as both the bridge was incomplete and the road was still unattended too. The work covered is assumed to be 85% over 270% of the time spent and 87% of the contract sum paid. This bridge is still incomplete.

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This is another Ojong bridge on Aberi-Zombo road in Nebbi district. The bridge is very narrow and some vehicles may fail to pass over this bridge. The performance in terms of physical work, time and amount of the money is the same as Ojong 1 and 2. This bridge is still incomplete.

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This is Aberi-Zombo road (16km) in Nebbi district that was awarded at Sh.432,875,520 and was varied to sh.496,632,816. The commencement date of works was 14th November 2006 but still incomplete with 400% time spent over assumed 60% physical work executed with 62% of the contract sum paid. The original contract indicates that works was set to end on 13th march 2007 but was later extended to 13th July 2008 but still incomplete.

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This is Lefori market site in Moyo district which was awarded at Sh.614,861,305 and commencement date was 22nd June 2007 and completion date was set on 21 November 2007 but still incomplete. The report indicates that 70% of works was covered over 250% of the time spent and 80% of the contract sum paid.

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This is Ogususu market in Adjumani which was awarded at Sh.1,056,528,396 together with Ofua market. The commencement date was 30th June 2007 and original completion date was set on 29th November 2007. It is assumed that so far 90% of physical work was covered over 250% of the time spent and 87% of the contract sum paid. It is one of the markets that will be underutilized because of its location and design as it has more lock- ups than the open shades. The distance to the market place is far away from the local communities.

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This is the construction site of Moinya Bridge in Adjumani district on Obilokongo- Moinya-Ayiri road which was awarded at Sh.195,980,125 and was varied to Sh.331,619,500. The commencement date was 14th November 2006 and the completion date was set on 13th March 2007 but was later extended to 13th November 2008. The report indicates that 50% of physical work was carried over 400% of time spent and 98% of financial progress met.

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