Development Initiative for Northern Uganda - DINU Quarterly Report Title of the Action: Development Initiative for Northern Uganda Reporting Period: 1st April to 30th June 2020 CRIS Number: DA No: FED/2017/387048 Due Date: 15th July 2020 Submission Date: 17th July 2020 1 QUARTER I PROGRESS REPORT ACTION DETAILS Programmeme Development Initiative for Northern Uganda (DINU) Title Action Title: Development Initiative for Northern Uganda (DINU) CRIS No: DA No: FED/2017/387048 Implemented United Nations Capital Development Fund (UNCDF) by: Area of Region Districts covered (38 districts including five new districts) Implementation Abim, Amudat, Kaabong (includes new district Karenga), Kotido, Moroto, Karamoja Nakapiripirit (includes Nabilatuk – new district) Napak Acholi Agago, Amuru, Gulu, Kitgum, Lamwo, Nwoya, Omoro, Pader Alebtong, Amolatar, Apac (includes Kwania- new district) Dokolo, Kole, Lango Lira, Otuke, Oyam Teso Amuria (includes Kapelebyong- new district), Katakwi Adjumani, Arua, Koboko, Maracha, Moyo (includes new district Obongi), West Nile Nebbi, Yumbe, Zombo Starting date: 21st December 2017 End date: 30 June 2022 Implementing Private Sector Foundation of Uganda (PSFU); Uganda Development Bank Ltd (UDB); Ministry of partner(s): Works and Transport (MoWT); Ministry of Local Government (MoLG); Local Government Finance Commission (LGFC); Uganda Local Government Association (ULGA); Urban Authorities Association of Uganda (UAAU) and the 18 core District LGs (includes 2 new districts of Obongi and Kapelebyong) Direct The direct beneficiaries include small and medium enterprises engaged in agribusiness value beneficiairies addition from 38 districts listed above; Local Government officials both technical and political and members of the community from the 18 core districts of which 5 districts (Amudat, Abim, Adjumani, Moyo and Obongi) benefit from the Road Rehabilitation Fund and 5 districts (Amuria (includes the new district Kapelebyong), Otuke, Yumbe, Omoro and Amudat) benefit from the Local Government Excellence Fund. Final The final beneficiaries will be the people of Northern Uganda from the 38 Districts of beneficiaries programme coverage. Project 54 months Duration: Total budget: EUR 25,852,174 Financial EUR 352,174 contribution. EU financial EUR 25,500,000 contribution: Reporting 1st April to 30th June 2020 10th Quarterly Report period/ No. of report: 2 Specific 1) To increase food security, improve maternal and child nutrition, and enhance household Objective(s) of incomes through support to diversified food production and commercial agriculture and DINU targeted through improving household resilience (notably to climate change) and women by this Action: empowerment; 2) To increase trade of commodities within the region, within the country, and with neighbouring countries through the improvement of transport infrastructures; 3) To strengthen capacity, gender-responsive good governance (core mandate and broad general mandate) and the rule of law at the level of local government authorities and empower communities to participate in improved local service delivery. Specific Result(s) 1.2 Increase market accessibility; of DINU 2.1 Transport infrastructure in the region is improved and climate-resilient; targeted by this 3.1 Capacities of Local governments to manage core public financial processes is strengthened Action: to improve service delivery and local development; 3.2 Upward accountability of Local Governments increased; 3.4 Capacities of local government to deliver services to communities strengthened. Specific 1.2.2 Providing seed capital to incubation projects: design and implement a mechanism for Activity(ies) of providing Business Development Services and seed capital in the form of loans, grants and DINU targeted reimbursable grants to promising projects; by this Action: 2.1.2 Rehabilitation and upgrading of selected numbers of priority districts and community access roads within 4 priority districts (Amudat, Adjumani, Abim, Moyo includes a new district of Obongi) 3.1.1 Strengthen capacities of Local Governments in public financial management; 3.1.2 Strengthen capacities of mandated local government units to efficiently mobilize and equitably allocate and utilize local revenue and resources; 3.1.3 Structured partnership with Associations of Local Authorities and key relevant institutions for research and advocacy on institutional and policy reforms relating to core mandates of local governments; 3.2.1 Support and strengthen LG accountability institutions in their interaction with line ministries and national accountability institutions; 3.2.2 Support the reform and pilot implementation of the Government of Uganda's own annual performance assessment framework for local governments 3.2.3 Incentivize performance of local governments and to stimulate community involvement; 3.4.3 Support districts and communities in road maintenance. 3.4.5 Improve land governance and facilitate the registration of Certificates of Customary Ownership. OPM Improved incomes and sustainable livelihood for the people in the disadvantaged areas Programmeme through improved production and wealth creation. Outcome 3 REPORT HIGHLIGHTS: The report presents the progress made by the Programme during the period from 1st April to 30 June 2020. The key highlights of the report are as follows: During the reporting period, the Government of Uganda like other governments across the world instituted a nationwide lockdown to curb the spread of COVID-19, which was declared a pandemic by the World Health Organisation on March 11th, 2020. Since then, the government has begun to ease nationwide lockdown put in place on March 30th, 2020, allowing for some businesses to open, both public and private transport to run. However, some restrictions for example curfew from 7:00pm to 6:30am remain in place. The UNCDF Country Office in Uganda continues to employ teleworking methods during this time. We continued implementation of activities largely using digital options and limited physical interaction for activities of high importance. With co-funding from DINU, UNCDF in collaboration with Makerere University (College of Business and Management Sciences) and other relevant ministries, agencies and departments undertook a socio- economic assessment on the impact of COVID-19 on small and medium enterprises (SMEs); and the local government fiscal space and service delivery. The assessments were informed by the work of UNCDF across the country including operations of the designated interventions under DINU programme. The final products of the assessments, two reports (the Uganda Business Impact Survey 2020 and the Impact of COVID-19 on Local Government Fiscal Space and Service Delivery) were officially launched in May 2020 by the Minister of Trade, Industry and Cooperatives and the Minister of Local Government, respectively. The Uganda Business Impact Survey, 2020 was launched and discussed via a televised event with representation from the European Union. The reports highlight the impact on both sectors and provide recommendations on how to survive the pandemic and beyond. (Links to both reports are available in the media section.) The Uganda Business Impact Survey has been particularly instrumental in informing and shaping the government relief package for the private sector instituted since then. In particular, the government acted on such report recommendations as setting up a dedicated loan facility for SMEs (via UDBL), deferment of PAYE and corporate taxes, provision of credit through SACCOs and microfinance institutions to support micro and small-scale enterprises, etc. The Survey has been hailed by the government and other partners as a strong example of a robust evidence-based contribution to the government policy-making process. UNCDF submitted an addendum to the European Union on the proposed re-purposing of funds and downsizing the land component. This will strengthen and scale up already ongoing activities which include: - strengthening pre-investment and post investment business development services (BDS) to SMEs; and providing partial credit guarantees. - From the bid evaluation and contracting process, the tentative total bid prices for all the road (405km) sections revealed a deficit. Therefore, an additional allocation on the District Road Rehabilitation Fund (DRRF) is considered to fully implement the road rehabilitation programme. - The Local Government Excellence Fund (LGEF) has been operational in five LGs (Amudat, Amuria, Omoro, Otuke and Yumbe) and has so far leveraged over €331,485.52 from partners, and projects have directly supported livelihoods of over 34,000 people in the five districts. Additional, four districts (Zombo, Napak, Agago and Kole) are proposed in line with the selection criteria. Under the Food Security, Livelihoods & Nutrition component, the programme intensified efforts to provide 4 seed capital to incubation projects in a bid to promote SME agro value addition and job creation in Northern Uganda. Uganda Development Bank Limited (UDBL) disbursed UGX 236,802,000 resulting into a cumulative disbursement of (UGX 388,596,734) to Kana Grain Millers Ltd out of UGX 470,557,500 of the total approved loan. The START Management Board approved two additional firms that were submitted to UDBL bringing the total to eight firms forwarded to UDB for financial closure. The eight projects with a total project value of UGX 10 Bn will receive UGX 2.5 Bn from the START Facility in the form of concessional loans and partial credit guarantees