Poverty Eradication Plan

The pauperisation eradication Action Plan (PEAP), Ugandas equivalent of a want Reduction Strategy Paper (PRSP), serves as the hoidenishs of import ontogeny strategy and readying textile for competitiveness want. Governments overriding aim as espouse in PEAP is cut down the meat number of people living in absolute poverty to less than 10% of the commonwealth by 2017 (MFPED 2001). PRSPs argon case supply manikins for beginning-income countries.They ar a requirement for all(prenominal) countries that would like to entrance concessional loans through and through the leanness Reduction Growth Facility (PRGF) or to advance from debt relief chthonic the Heavily indebted(predicate) Poor Countries (HIPC) beginning(a). They are alike the main framework around which most bilateral presenters are to build their cooperation (WHO 2004). Developed in 1997, prior to the advent of the PRSP initiative by the World fix, PEAP is widely acknowledged to be a home- createn aim with clear national ownership and leadership.Since its formulation, PEAP has undergone two rounds of revision. The first round of revision was in 1999/2000 and it gave rise up to PEAP 2001. The second round was in 2002/2003 and gave rise to the PEAP 2004. PEAP 1997 was structured around four areas a) macro frugal policy, b) institutional framework for poverty eradication, c) policy framework to addition incomes of the suffering, and d) measures to improve the prime(a) of life of the wretched (MFPED 1997).Following the introduction of the PRSP initiative, a mutual agreement was reached amongst the Government of Uganda and the World Bank to retain PEAP as Ugandas PRSP with some improvements practically(prenominal) as widening consultations on the plan and b passageening its scope to complicate detailed diagnosis of poverty in the country. * Whats New * turn up Map * Site Index * Contact Us * Glossary - Top of Form Bottom of Form * Home * About the IMF * Research * Country entropy * News * Videos * Data and Statistics * Publications Uganda and the IMFS closure your comments on PRSPs and IPRSPs to emailprotected rg See in any case impoverishment Reduction Strategy Papers (PRSPs)Free Email NotificationReceive emails when we post new items of interest to you. Subscribe or Modify your profile Poverty Reduction Strategy Paper Ugandas Poverty Eradication Action Plan Summary and Main Objectives Ministry of Finance, Planning and sparing learning Kampala, Uganda March 24, 2000 Poverty Reduction Strategy Papers (PRSPs) are prepared by member countries in broad consultation with stake concedeers and development partners, including the staffs of the World Bank and the IMF.Updated e rattling trine years with annual increase reports, they describe the countrys macroeconomic, structural, and social policies in support of ingathering and poverty drop-off, as well as associated orthogonal financing needs and major sources of financing. This country docum ent is world do on tap(predicate) on the IMF website by agreement with the member country as a service to users of the IMF website. Use the free Adobe Acrobat Reader to view affix Tables and Chart 1 (212 KB) Contents 1. Introduction Ugandas planning framework The revision of the PEAP2. field of call for vision and boilersuit goals Reducing bsolute income poverty Raising pedagogyal achievement of Ugandans Improving the health of the people Giving voice to myopic communities3. The Poverty Eradication Strategy Creating a framework for economic produce and transformation Good governing body and security Actions which right away increase the ability of the little to raise their incomes Actions which straightway improve the timber of life of the poor4. Macroeconomic stability, medium- and long-term economic consumption implications of the PEAP Macroeconomic stability and the macroeconomic framework The Medium-Term Expenditure FrameworkUsing the PAF to prioritise common e xpenditure Poverty priorities and the PAF Additionality Accountability of PAF resources The overall allocation of expenditures at bottom the MTEF Intermediate output targets in the medium-term Long-run targets and costings Long-run resource availability5. The Monitoring Strategy augment Table 1 Goals, targets and indicators in the PEAP 2000 Annex Table 2. 1. Uganda Selected Economic and Financial Indicators, 1996/971999/2000 Annex Table 2. 2. Uganda Fiscal Operations of the Central Government, 1996/972002/2003 Annex Table 2. . Uganda Balance of Payments, 1996/972002/03 Annex Table 2. 4. Uganda Monetary Survey, 20003 Annex Table 3 Summary of Medium-Term Expenditure Framework Contents1. IntroductionThis paper is a synthesis of the main features of the Government of Ugandas Poverty Eradication Action Plan (PEAP). The PEAP has hightail itd the formulation of government policy since its inception in 1997, and is currently being revised. Under this plan, Uganda is being transformed in to a modern economy in which people in all arenas hind end participate in economic harvest-tide.This implies a number of conditions * The economy requires structural transformation, including the modernisation of agriculture, the development of industries which build on convey and supply inter-group communicationages from agriculture, and continued institutional development in the legal and pecuniary sectors. * Poor people must be able to participate in this growth, both by expanding smallholder agriculture and by increasing custom in industry and serve. * Economic growth must be sustainable, gritty character reference and broadly ground. The non-material aspects of poverty must be addressed democratic studies run through sayn that peril, illness, isolation, and disempowerment are as meaning(a) to the poor as low incomes. Ugandas Poverty Eradication Action Plan (PEAP) is established on four major pillars * Creating a framework for economic growth and transformation * Ensuring reasoned governance and security * Directly increasing the ability of the poor to raise their incomes * Directly increasing the quality of the life of the poor.The revision of the PEAP in 2000 draws on the progress make since 1997, including the development of sector-wide approaches, the participatory research carried out by the Uganda participatory Poverty Assessment Project (UPPAP), the constraints identify in the Poverty Status Report, and the development of costings of earthly concern actions and monitorable indicators in key, poverty-oriented sectors. It forget alike place a greater emphasis than the 1997 document on the actions which promote hush-hush sector development and indeed direct indirectly to poverty-reduction. The revised PEAP is Ugandas Comprehensive festering Framework.Ugandas planning frameworkThere deport been a number of initiatives to streng thusly the planning offshoot in recent years. This includes major informatory exercises interrelate ing Ugandas long term goals and objectives, much(prenominal) as Vision 2025, describing national aspirations, and the 1997 Poverty Eradication Action Plan as a national planning framework to guide detailed medium term sector plans, regularise plans, and the budget mold. In turn, detailed sector-wide plans and coronation programmes pass water reached varying degrees of completion, set in spite of appearance an overall medium term expenditure framework.A programme of strengthening district message to prepare medium term expenditure frameworks is also underway. The modern approach to planning involves ensuring that the right framework has been established to enable effective programming, implementation and monitoring. Chart 1 describes the flows and relationships in the midst of different plan/policy processes in Uganda. The most grievous point to note is that these elements interact in an ongoing process. Ugandas over-arching national planning document is the Poverty Eradic ation Action Plan, signalling poverty eradication as the rudimentary goal of the Government.Chart 1 shows the relations between the PEAP and other plans. The PEAP is not a blueprint for sector activities. It provides a framework for the development of detailed sector plans and investment programmes. Implementation of the PEAP demands sector-wide programming to determine sector objectives, outputs and outcomes expected from sector expenditures, and the activities which the expenditures allow for fund in order to achieve the desired outputs and outcomes. Quick guide to planning processes Vision 2025 an overview of long term goals and aspirations by the year 2025 The PEAP the national planning framework on which to develop detailed sector strategies arena Planning adept specifications of sector priorities, disciplined by hard budget constraints dominion Planning implementation plans for sector strategies based on local priorities / needs MTEF annual, rolling 3 year expenditure planning, setting out the medium term expenditure priorities and hard budget constraints against which sector plans can be developed and refined rule MTEF setting out the medium term expenditure priorities and hard budget constraints Against which district plans can be developed and refined Annual cypher District Budgets annual implementation of the troika year planning framework Donor NGO private sector participating and sharing culture / ideas in develop sector plans and budgets Participatory processes bottom-up participation of districts in the planning and monitoring process, as well as participatory poverty assessments, providing essential feedback on progress towards poverty eradication goals Thus the 1997 PEAP has guided the preparation of detailed sector plans. Capacity constraints within line ministries, which have been a serious limitation in sector planning, are being overcome by support from our donor and NGO communities in a spirit of partnership and teamwork. In recent years, major advances have been recorded in production of the Ten Year Road Sector Development Programme, the Education Strategic Investment Plan and the Health Sector Plan, and the Plan for the Modernisation of Agriculture. Also underway are plans for the energy sector and the justice sector.Eventually all sectors go away be covered by up-to-date, resource trammel sector plans and investment programmes which centralize on achieving the goals of the PEAP. In turn, the PEAP and the sector plans set the framework for preparation of district plans (although these are still at an early stage of development). Under Ugandas decentralised system of governance, the local authorities are responsible for determining the implementation plan for sector programmes based on local priorities. work of communities in the planning framework is also being strengthened.Under the Uganda Participatory Poverty Assessment Project (UPPAP), the second phase pull up stakes include disseminati on of the perspectives of the poor in order to help guide policy at both national and district trains, and there go away be further work in nine pilot districts to enhance community-level participatory planning and monitoring capacities. It is important to note that the relationship between both the PEAP and sector plans, and between sector and district plans, and between district and lower local council plans, is an iterative one. The PEAP sets the framework for other plans, besides is also a product of those plans.For example, the current PEAP revision reflects the policy statements make in various sector plans, and tries to balance the sector objectives within a national framework. In turn, revisions of sector plans should take note of national priorities and constraints as outline in the PEAP in refining their own sector strategies. The National Planning Authority, according to its mandate in the Constitution, pull up stakes have the role of ensuring that the different plan s are coherent. The same principle applies to the relationship between sector and district plans.While medium term plans establish a policy framework and desired outputs and outcomes, they are insignificant unless disciplined by hard budget constraints. Therefore another critical element of the planning framework is the medium term expenditure framework (MTEF). Since 1992, MFPED has been ripening an MTEF, which is presented to Cabinet as part of the annual Budget Framework Paper (BFP), covering common chord fiscal years. Preparation of the annual BFP includes detailed word of honors with sector on the job(p) groups each year to monitor performance of current programmes and projects.These discussions identify implementation bottlenecks, inefficiencies in existing operations, and potentially unsustainable imbalances in the size of the recurrent and development programmes. The discussions also take account of any upcoming policy initiatives in order to ensure that all new polic ies are comprehensively costed to reveal the full consummation of their fiscal implications, and in order to propose how the Governments expenditure programme can be adjusted in light of new policy priorities, both within and between sectors.The important point is that, in the medium term, creation resources can be redeployed in accordance with changing strategic priorities it only requires development of the capacity and willingness to reprioritise spending needs and reallocate expenditures in a disciplined way. More recently, there have been attempts to broaden the consultation of the BFP process by change magnitude discussion with donors, peculiarly on the sectoral priorities of Government expenditure and on the lieency of Government assumptions regarding external financing with actual donor financing plans.Steps are also being taken to involve civil society in the consultation process. An abbreviated version of the BFP (the version that goes to Cabinet before the expenditur e allocations are approved by Cabinet) is published in the annual Background to the Budget, and a detailed summary of the composition of expenditure for all sectors for the three year MTEF is published as an appendix table in the Budget Speech document. In 1999, a start was made on extending the BFP process to the districts, when training workshops were organised for the local Governments.Technical expertise is being provided by the central ministries to help district judicatures to prepare their own three year expenditure planning frameworks consistent with resource availability. Government hopes that in due course this capacity can be extended to lower level local councils. The final element of the planning framework is an assessment of the clash of plans and budgets on civil society and beneficiaries, shown at the bottom of Chart 1 as civil society.There are a variety of monitoring techniques, such as technical assessments of project/programme performance, statistical surveys, and more participatory methods to complement the traditional nursing home survey methods such as the Uganda Participatory Poverty Assessment Project, which is attempting to bring the voice of the poor into national, district, and lower level planning. The results of monitoring activities provide feedback at all levels of the planning system.The revision of the PEAPWhile the basic principles behind the 1997 PEAP tolerate valid, there have been significant developments since its preparation both in outcomessuch as the huge increase in educational historysand in the preparation of sectoral plans and the information available about poverty. Hence, to bear relevant, the plan has to be revised. It is envisaged that the revision of the PEAP will be a regular process carried out every two years, draft on the results of the Poverty Status Report which will also be prepared every two years.Preparation of the revised PEAP remains a super participatory process. Government recognises that the planning system does not consist of decision-making by a single institution at the centre. Rather, the system involves the interaction of a number of processes within an overall framework. As such, the process is much more dynamic and responsive to changes in policy priorities and/or resource constraints. The involvement of a much larger number of agencies in the planning process makes it important that planning linkages are clearly specified and understood.Substantial crusade is being made to improve the partnership process in Uganda. As mentioned above, participatory approaches have increasingly been adopted both for sector plan preparation and monitoring and appraisal exercises. In revising the PEAP we have summarised and consolidated the results of previous consultations and research findings. The revised PEAP builds on an ongoing process of consultation. An initial discussion draft was circulated to a wide range of stakeholders to stimulate chat and debate.Later drafts i ncorporate the results of this wide consultation. In order to ensure reasonable levels of participation in preparation of the revised PEAP, the editorial team prepared a Participatory Action Plan. This includes consultations at the central government level as well as with local governments, with donors, with Parliamentarians, and with civil society, as well as the development of comme il faut feedback mechanisms to ensure that all stakeholders have contributed effectively to the drafting process.General informatory workshops the revision process includes two major consultative meetings involving wide representation of stakeholders (politicians ministries donors NGOs private sector civil society urban and local authority representatives, media). The objective of these workshops is to review current drafts and to provide detailed comments on policy issues arising from the drafts. Regional meetings for district officials MFPED, working with the Ministry of Local Government, has alrea dy undertaken some regional work to explain the PEAP, UPPAP findings and budget issues.District officials will be presented with drafts of the revised PEAP at a series of regional workshops. As mentioned above, the CSO Task Force will also be promoting discussion of PEAP related issues within districts and communities. Donor consultations in addition to participation in the full general consultative workshops, the current draft has been presented at the Donor Consultative Group meetings in March 2000. Political consultation In addition to attendance at the general consultative workshops, another meeting for members of all Parliamentary sessional committees was held in February 2000.This will be followed by further briefing sessions for specific sessional committees on issues relevant to their sector. Feedback mechanisms It is very important to ensure that there is adequate time for written responses and contributions. Drafts have been widely circulated for the consultative workshop s in February and April. There will be active follow-up, oddly at the district level, to ensure that written responses are received from every district and sector ministry.Building on existing consultative processes Issues raised(a) during the revision process will not only be followed up at the general consultative meetings, but also raised through existing consultative fora (such as the sector working groups for the budget framework process NGO consultative meetings and regular donor meetings). Contents2. National vision and overall goalsPoverty has many proportionalitys including low and exceedingly variable levels of income and consumption, physical insecurity, poor health, low levels of education, disempowerment, a heavy burden of work or unemployment, and isolation (both social and geographical).Drawing on recent evidence (including household surveys and the Uganda Participatory Poverty Assessment Project), the PEAP laid-backlights the many dimensions of poverty in the Ug andan context. It recognises the importance of increasing income to poor households, and places a high priority on eradicating income poverty. It also views ignorance as a particularly constraining feature of the lives of poor people, and is concerned to improve literacy and educational achievement among the population at large.Health is another central concern for the poor, and the Government has established clear goals for ameliorate the health of Ugandans. It is essential that poor people have an effective voice in the design and implementation of public policy. The objective of the PEAP is to marshal public effort at improving these dimensions of household wellbeing. Reducing absolute income povertyIncome levels are low in Uganda, and large sections of its population are unable to buy the basic necessities of lifefood, clothing, and shelter. Low incomes also lead to poor health and limited education. Consumption poverty levels are high.In 1997, 44 part of the population was es timated to consume less than what is required to meet the basic needs of life. Low rates of economic growth, and the effects of civil disorder, are important historical factors ca exploitation poverty in Uganda. Incomes are also highly unequally distributed, which reduces the impact of economic growth on poverty reduction. At the level of the household, poverty is related to rural residence (specifically to living in the north or the east), to grease shortage, to low levels of education, to being headed by a female widow woman or by someone old, and to limited access to marketplaces.Unequal sharing of resources within the household reflects not only cultural factors but unequal access to education and physical assets such as land, in which women are disadvantaged. Poverty also reflects society-wide phenomena including insecurity, the quality of public services, the availability of productive employment, macroeconomic stability and the functioning of markets, health information, an d the technical information available throughout society. But there are clear signs of improvement * The proportion of Ugandans in consumption poverty fell from 56 percent in 1992 to 44 percent in 1997. Average real household consumption locomote by 17 percent over the period, and rose in every year (this is confirmed in the national accounts data). * The expenditures of the bottom 20 percent rose even more those of the bottom 10 percent rose by 29 percent, and those of the of the following 10 percent by 23 percent over the period. * A major factor in the reduction of poverty was the benefit farmers gained from the increase in coffee prices, reflecting the combined effect of the boom in world coffee prices and the liberalisation policy, which passed the price increase on to farmers. There was no systematic trend in inequality in the 1990s. But although inequality is not definitely getting worse in Uganda, it would be desirable to reduce it. These data are encouraging incomes are rising without a significant increase in inequality, and therefore poverty is precipitationing. However, not all groups participated equally in the growth in incomes. Although poverty fell in all regions, average incomes grew fast-paced in the regions which were initially better off. So although overall inequality did not increase, regional inequality increased significantly (Table 2. 1). Table 2. Household consumption gains by region Region Percentage of population in consumption poverty Percentage growth in real consumption 1992 1997 19921997 Central 45. 5 27. 7 21. 4 West 52. 8 42. 0 15. 9 East 59. 2 54. 3 11. 0 North 71. 3 58. 8 14. 4 The income group which benefited most dramatically was cash crop farmers, reflecting the increase in cash crop prices. Poverty in this group fell from 60 percent to 44 percent between 1992 and 1996 (Table 2. 2). Income poverty among food crop farmers remained by and large unchanged (falling marginally from 64 percent to 62 percent).Table 2. 2 Household consumption gains by economic sector Sector of household head percent of population (%) Percentage of population in consumption poverty 1992 1996 1992 1996 Food crop 47. 2 44. 2 63. 7 62. 2 Non-food cash crop 23. 4 26. 7 60. 1 43. 7 Manufacturing 3. 7 3. 3 44. 8 27. 4 Trade 6. 7 6. 9 25. 9 19. 4 Government services 6. 8 5. 5 35. 0 28. 0 Not working 4. 3 4. 9 60. 2 63. 4 Participatory data from the UPPAP indicate that many communities consider that poverty is increasing. This probably reflects two differences from the household survey.First, the participatory assessment was confined to poor, mainly food-producing communities, which gained the least from recent improvements. And the perceptions of poor people covered in the UPPAP were probably based on a broader view of poverty, encompassing more than simply low income. The Government of Uganda considers that absolute poverty must be eradicated. It has set itself the objective of simplification the headcount of inco me poverty to 10 percent of the population by 2017. Raising educational achievement of UgandansThe PEAP aims to raise educational achievement of the Ugandan population, especially among infantren of poor households.The significance of education is that it increases incomes and economic growth, and it offers an intrinsic benefit in itself. In 1997, the policy of free education for four children in every family was introduced and principal(a) enrolment increased enormously from 2. 6 gazillion in 1996 to 6. 5 million currently. Almost three million children entered the indoctrinateing system and the gross enrolment rate, using school-based data, rose to 128 percent in 1997 and 145 percent in 1999. Participatory evidence clearly shows that this increase is greatly appreciated by poor people.These data show that the main issue in primary education is no longer increasing quantity, but maintaining quantity while enhancing quality. It is generally agreed that the quality of education in Uganda lessend seriously between the mid-1970s and the late 1980s, and the increased enrolment is now straining the system. While the 1998 National Integrity Survey found that 60 percent of parents were satisfied with the quality of their childrens education, the UPPAP investigation found widespread concern with schooling quality among the poor communities contacted.This is borne out by more formal investigations of schooling quality. The heavily burdened primary schooling system cannot meet the immediate demands for classrooms, teachers, and teaching/learning materials. Educational policy thus faces two central challenges first, how to constrain the increased number of children in school and secondly, how to ensure that quality is maintained and improved given the expansion in the system. Enrolment rates in supplemental and tertiary education remain low, although they have increased in recent years.Total secondary enrolment rose from 336,022 in 1997 to 427,592 in 1999. The dr aft strategic plan for secondary education estimates that only 10 percent of the secondary school age population is in school and that only 6 percent of the poorest 25 percent complete secondary education whereas 22 percent of the best-off 25 percent do so. Whereas Uganda is now well ahead of most countries in Africa in primary education, it is behind the others in secondary education.Although current policy will be focussed on achieving sustainable universal proposition primary education, the requirements of a growing modern economy will place increasing emphasis on secondary schooling, and such schooling is certain to figure prominently in rising PEAP revisions. The Government of Uganda has achieved its objective of universal primary education. The challenge it now faces is to encourage children to remain in school, and to acquire relevant skills for adult life.This implies the following objectives * Maintain universal primary school enrollment (including poor households) * Redu ce drop out rates and raise completion rates * Raise the cognitive skills of primary school graduates (as reflected in results from the National Assessment of Progress in Education). Improving the health of the peopleLife expectancy in Uganda has been estimated at just 42 years in 1997 (World Development Indicators). This is exceptionally low, mainly because of the AIDS epidemic. infant deathrate is high, though it fell significantly from 180 per thousand in 1989 to 147 in 1994.In addition to increasing mortality, illnesses such as AIDS and malaria incapacitate large numbers of people. Trends in AIDS incidence are presented in the Poverty Status Report there is a marked fall in incidence in urban areas, where the range of prevalence rates in ante-natal clinic attenders in six urban centers fell from 1228 percent in 1991 to 715 percent in 1997. In rural areas there is no clear trend. Illness is a dimension of poverty which affects all income groups in Uganda, although it affects the poor particularly badly.Health outcomes depend on at least six factors incomes, education, information, health services, water supply and sanitation. Studies of household data in Uganda have shown that both education and specific information about the causes of illness significantly reduce child mortality. For instance, one ingest (using 1992 data) found that if a mother has good information about malaria and diarrhea, this reduces the under-five mortality of her children by 0. 045, compared with the overall mortality rate of 0. 18. The same study found that child mortality was much more strongly related to education than to incomes.Mothers in the top expenditure quartile had lost near the same proportion of their children as mothers in the bottom expenditure quartile, but child mortality dropped at every level of maternal education and mothers with further education had only a quarter as high a rate of child mortality as mothers with no education. More recent data suggests that the link between incomes and mortality has grown stronger (Table 2. 3). Between 1988 and 1995, while under-three mortality fell by 6 percentage points for the poorest 20 percent, it declined by almost 60 points for the richest quintile. Table 2. Under-three mortality by wealth quintile 1988 1995 Poorest quintile 188. 5 182. 5 Second quintile 163. 9 154. 5 Third quintile 184. 9 168. 1 Fourth quintile 180. 6 134. 3 Richest quintile 157. 6 99. 7 Source Sahn et al (1999) Adult mortality may be more powerfully affected than child mortality by income and access to curative services. The most commonly named consequence of poverty in the UPPAP study was ill health, and the third most commonly named was death. It may also be more powerfully affected by the presence of health services, especially for maternal mortality.In the case of AIDS, cultural factors interact with poverty. In some parts of the country, single women cannot get access to land finding a partner then becomes a matter o f survival and people in these circumstances take risks which they would otherwise avoid. A World Bank study has developed projections of under-five mortality in Uganda. Using international data, it has been shown that child mortality responds to the effects of technical progress in preventive and curative care over time, and to female education and income growth within the economy. Using relationships estimated using international data, the ollowing projections are derived Table 2. 4 Projections of Child Mortality in Uganda, 2017 Child mortality in 1995 160. 2 Child mortality in 2015 assuming time trend alone assuming increased female education assuming female education and 3% per capita income growth assuming female education and 5% per capita income growth 118. 9 117. 6 110. 2 85. 2 These projections show that child mortality could be halved by the end of the period. However, there are three caveats * the impact of female education may be underestimated, especially given UPE. AIDS will tend to increase child mortality more than these data suggest. * Most importantly, the best international performersmany of whom have been socialist countries such as China and Cubahave achieved much faster improvements in health outcomes. It is important to recognize that energetic public action can produce very fast improvements in health even at low income levels, as the examples of China, Cuba and Sri Lanka show Ugandas primary education enrolment, though not its health status, is now much better than most countries at its income level.The lessons suggested by these countries include the enormous importance of getting simple health messages out to the population, and the importance of community-level vigilance using very cheap personnel sometimes known as barefoot doctors. The very strong emphasis on preventive health messages in the minimum package is an attempt to reorientate the health system to increase its effects on health outcomes. Improving the health of the Ugandan population is a priority objective of the Government of Uganda.The Health Sector Strategy sets targets of reducing child mortality from 147 to 103 per thousand, maternal mortality from 506 to 354 per 100,000, to reduce HIV prevalence by 35%, reducing the total fertility rate to 5. 4, and reducing aerobatics to 28% by 2004/5. Giving voice to poor communitiesPoor people suffer directly from being disempowered. Powerlessness, described as inability to affect things around one, was reflected in the findings of UPPAP. The National Integrity Survey also found that 40 percent of the users of public services had to pay bribes.Such experiences are not only materially impoverishing they are also demoralising. More broadly, people experience frustration when they cannot perceive their influence over public policy. UPPAP reported, for instance, that poor people saw no effective mechanisms to hold service deliverers accountable. The Government of Uganda aims to implement further ad ministrative and political remediates which will increase poor peoples control over their own lives and the policies and services which affect them. Contents3.The Poverty Eradication StrategyThe overall poverty eradication strategy is based on the following principles * The public sectors role is to intervene in areas where markets function poorly or would produce very inequitable outcomes. * Where the public sector intervenes, it should use the most cost-effective methods, including the use of NGOs for service speech communication where appropriate. * Poverty-eradication is a partnership and should involve the impending possible integration of the efforts of government with its development partners. All government policies should reflect the importance of distributional considerations, of gender, of childrens rights, and of environmental impacts. * Each area of public action will be guided by the formulation of desired outcomes and the designs of inputs and outputs to promote th em. Strategic public action for poverty eradication is established on four pillars * creating a framework for economic growth and transformation * good governance and security * actions which directly increase the ability of the poor to raise their incomes * actions which directly improve the quality of life of the poor.It is important to note that these four elements interact. For instance, although primary education is discussed under quality of life, it also has implications for all the other three goals. The distinction between the goals helps to focus attention on the actions which most directly affect poverty, but the interactions between the objectives need to be borne in mind. Creating a framework for economic growth and transformation. Economic growth and employment-generation are required conditions for poverty-eradication.The PEAP must be based on an understanding of the growth potential of the Ugandan economy, and of the public interventions needed to achieve it. .Work at Ugandas Economic Policy Research Centre has communicate the growth of incomes and investment over the next twenty years. The EPRCs model has three main components an investment function, a balance-of-payments constraint, and a production function. Economic growth in the model is driven by three main factors the accumulation of human and physical capital, and the shift of stab from agriculture to manufacturing, in which it is assumed to be more productive.Estimates of the coefficients are derived from a sixteen-country panel data set. The projections for Uganda include a low-case, based on existing trends, large(p) 5. 56. 5 percent annual growth in GDP over the period (giving a GDP per capita of $550 in constant prices in 2020). They also provide a high-case, based on an increase in the productivity of aid and the diversification of the productive structure. This yields 78 percent per annum growth, giving a GDP per capita of $700 in 2020. This model therefore gives potential an nual per capita GDP growth of between 2. percent and 4 percent. A very recent study at the World Bank takes a larger cross section to explain why growth rates vary across countries, and focuses more on institutional determinants. It identifies a number of factors which constrain growth, and assesses by how much economic growth could be raised if Uganda could close the gap in these factors compared with average set for developing countries (controlling for income levels). Some factors (such as trade openness and macroeconomic stability) are already better than average, and cannot yield higher future growth.Uganda must maintain the good performance of these indicators. But othersclosing the gap in educational attainment, deepening financial institutions, and improving property and contract rightscan yield significant gains. The study estimates such gains could produce an additional GDP annual growth per capita of 1. 7 percentage points. Mean per capita growth of 3. 2 percent per annu m (which is what was achieved in the 1990s) could be raised to around 4. 9 percent (assuming no deterioration in the external terms of trade).This translates into a GDP growth rate of 7. 8 percent per annum. These studies show that GDP growth of the order of 7 percent per annum is executable over the longer term in Uganda. But such economic growth will not be automatic. It will call for public action today to build the institutions needed for higher growth. Economic growth in Uganda requires a framework within which the private sector can expand. The first essential element is macroeconomic stability. Without this, economic growth will not be sustainable.The revised PEAP therefore includes a commitment to maintain macroeconomic discipline which has underpinned the fast economic growth of recent years. The second key element is setting appropriate macroeconomic incentives. This involves economic openness, which encourages exports and labor-intensive investments. The future for Ugand an industry is not reliance on a wall of high tariff aegiswhich encourages capital-intensive investment which does minor for employmentbut open competition in a market which is being expanded by rising incomes from plain modernisation.Thirdly, the framework for economic development also includes the equitable and efficient collection and use of public resources. On the revenue side, independent research has shown that recent tax reforms, including the introduction of VAT have made the incidence of taxes more progressive. Local taxation, however, may need review in order to make it more progressive. The use of the nest egg made available by external debt relief for poverty-reducing purposes and the development of a sound strategy for external borrowing are essential.On the expenditure side, the Poverty Action Fund has been employ to reallocate expenditures to directly poverty-reducing services primary education, primary health, agricultural extension, feeder roads. Equalisation grants are gradually being introduced these are intentional to make the delivery of services more equals across the country. The aim is that a poor woman in a remote rural area should be able to demand the same standard of service from the public sector as a man in the most affluent urban setting. The budgetary reform under the MTEF is central to implementing the PEAP.Finally, in order to promote economic transformation, the constraints on private sector competitiveness need to be removed. Surveys of business people in Uganda have shown that they face severe constraints on their operations. Infrastructure is a major constraint firms experience of power cuts significantly reduces their investment, and the development of internal markets is impeded by the limitations of the road network. Hence the sector-wide transport strategy and the ongoing process of utility reform are key.Another constraint is the difficulty that business people experience in enforcing contracts this will be ad dressed by the programme of commercial justice reform which the government is beginning. The weakness of the financial sector is also a serious constraint. correct of these sectors is essential for the development of the private sector. This is a poverty issue, because the expansion of formal employment is a central part of the strategy. A crucial component of the PEAP is accelerating economic growth. The actions outlined above can be expected to raise GDP growth performance to a potential as high as almost 5 percent per capita per year.Good governance and securityGood governance is increasingly recognised as a prerequisite to economic growth and development. In Uganda, consultations with the poor have shown that insecurity is among their most pressing concerns. Work by the Human Rights Commission, the Law and Order Sector Working Group and the Governance Action Plan project has identified the main priority areas in this sector. Conflict cloture and effective support to conflict-a fflicted areas are essential. Armed conflict has been a decisive factor in the impoverishment of the North and the East.In 1999 the internally displaced population of Uganda is estimated at 622,000, and in addition insecurity affects many people who are not actually displaced. So the successful resolution of conflicts is a necessary part of poverty-eradication. The democratisation of Uganda has been pursued in a context of decentralisation. The process involves the transfer of responsibilities to district level. Participatory work has shown that the most highly appreciated level is the Local Council 1 or Village Council (LC1), the level which is closest to the people.The implications of decentralisation for ministries of central government have been reflected in the government restructuring, but the extent to which they are now ready to fulfil their new role needs to be assessed. Good governance involves making public expenditure luculent and efficient. Many reforms have been under taken to make it harder to misuse public funds with impunity, including the establishment of the Ministry of Ethics and Integrity and the design of a new regulatory structure for procurement. inspection and repair delivery on the ground urgently needs improvement, as various surveys have shown.This is to be addressed by the introduction of results-orientated management, by pay reform designed to increase and simplify public sector remuneration, and by strengthening bottom-up accountability communities must be able to hold service deliverers accountable through the Village Councils. Law and order is being addressed by the introduction of a sector-wide approach in which reforms proposed for the criminal justice sector will be costed. The poor reputation of the police needs to be addressed by an improvement in service delivery.The relatively good reputations of LDUs and LC courts can be built upon. Public information is central to good governance and innovative methods of disseminatin g information should be explored by inter-sectoral cooperation. The special needs of the disabled require a community-based approach which deserves priority. Disaster management, which includes the handling of drought, floods, earthquakes and conflict, requires both preparedness and response the recently established Ministry within the Prime Ministers Office has prepared a national strategy.Actions which directly increase the ability of the poor to raise their incomesRecent empirical work (mentioned above) has established that GDP growth rates of over 7 percent per annum are feasible for Uganda, providing the needed public actions are taken. What does such growth mean for household income and poverty? The Government has prepared projections for GDP growth and other key macroeconomic variables. The model forecasts real GDP and real per capita private consumption up to fiscal year 2019/20, on the basis of a national accounts format.In these scenarios private incomes grow less fast tha n Government income. As a result, private consumption growth is slower than GDP growth. In real terms, consumption per capita grows by 3. 2 percent per annum for the high projection and 2. 5 percent per annum for the low one. How much poverty reduction are such consumption growth rates apparent to yield? Taking the structure and distribution of income (measured by household consumption) as given in the 1997 Poverty Monitoring Survey, an assessment can be made of the effect of such growth on income poverty.If we assume that every Ugandan household experiences per capita income growth of 3. 3 percent per annum, the income poverty headcount would fall to 10 percent by 2017. The MOFEP higher growth scenario (a growth of household consumption of 6. 2 percent per annum, or 3. 3 percent in per capita terms) is therefore consistent with the poverty goal of the PEAP, so long as such growth is distributionally neutral (all households benefit proportionately). Not all sectors, however, will e xperience such high growth. Taking past experience as a guide, a growth rate of 6. percent in aggregate consumption might involve agricultural incomes growing at only 4. 7 percent per annum (with services and manufacturing growth being respectively 7. 9 percent and 12. 4 percent). If households are locked in their sectors of employment (as reported in the 1997 household survey), those employed in agriculture would experience slower income growth. We estimate that in this limiting case, headcount poverty would only fall to 22 percent, even if aggregate household income growth were 6. 2 percent per annum. Low agricultural growth constrains the poverty reducing impact of economic growth.These qualified projections of potential poverty reduction under the Gvovernments assumptions for economic growth highlight the need for more targeted interventions, the effect of which would be to accelerate the incomes of the poor directly. Two main lessons emerge first, poverty reduction calls for h igher agricultural growth rates and non-farm employment must be increased in the rural areas where most poor people live. Most Ugandans are self-employed, mainly in agriculture. This gives the Plan for the Modernisation of Agriculture a central role in poverty-eradication.Despite the constraints of limited technology and market access, the potential of raising agricultural incomes is considerable. The PMA identifies six core areas for public action in agriculture research and technology, advisory services, education for agriculture, access to rural finance, access to markets, and sustainable natural resource utilisation and management. Employment outside agriculture can be promoted by microfinance, advisory services, and vocational training. Feeder roads remain a central priority as in the 1997 PEAP, since when nourishment expenditure has tripled.Labour-intensive methods have been found to be financially cheaper than other methods of road-building and will contribute to employment generation. Research on land shows considerable inequality, often resulting from administrative and political factors more than the operation of the market. The Land Act is designed to strengthen the land rights of the poor. Womens land rights need to be strengthened further public sensitisation for the purpose of the Land Act is needed a cost-effective structure for land administration is needed and the Land Fund needs to be operationalised, targeting the landless poor.The restocking programme for rural livestock has the potential to reduce poverty by restoring economically blue-chip assets, provided mechanisms are identified to target the poor. The Government is establishing a new regulatory and supervisory structure for microfinance in order to increase poor peoples access to financial services. The Government has withdrawn from the provision of capital for credit but will still provide support for capacity-building. Publicly supported research is coordinated by NARO. Research i s to be decentralised, and stakeholders are to be involved.The appropriate mix between national and international research needs consideration. The potential benefits of publicly provided advisory services vastly outweigh their costs. Strategy is now being reviewed. The advisory service must address issues relevant to poor farmers, using ideas developed by NGOs for low-input technologies which the poor can afford. The services need to address productivity-enhancing techniques for farmers at different levels of resources, drought-resistant crops where needed, nutritional issues, marketing, storage and processing, and soil-conservation.Livestock, fisheries and agroforestry will also be covered by the advisory services. The management of markets is a private sector role under the PMA. The public sector has a role in ensuring that market access is affordable for vendors, in improving access to market information throughout the country, and in formulating policy on genetic modification a nd on organic farming. Sustainable resource use will be promoted by raising awareness, including the encouragement of communal initiatives to protect common property resources.Forestry needs to be promoted by a mixture of public protection and investment in private forests. Valley dam schemes will be reviewed this is an important priority for addressing the poverty of the Karimojong and the insecurity associated with cattle-rustling. Energy for the poor will be promoted by encouraging the use of more efficient cooking technologies and by smart subsidies for rural electrification, which will encourage entrepreneurs to invest in power foundation in rural growth centres.This will make it easier for the rural poor to have their output processed, increasing their effective access to the market it will also enable more households to gain access to electricity in their homes. Actions which directly improve the quality of life of the poorHuman development outcomes in Uganda have been trans formed by the introduction of free primary education for four children in each family, which has lead to a massive increase in enrolment. Primary education is a central element of the PEAP. Now that quantity has increased so much, quality is critical.Challenges include the implementation of low-cost classroom construction and the management of the gap between teachers and classrooms including the use of double shifts where appropriate, measures for bottom-up accountability, and the possibility of using school gardens to educate children about agriculture while also providing some food. In secondary education, a strategy is in draft. Targeting gifted children from poor backgrounds is a poverty issue. Health care is being coordinated by the new health strategic plan. At the heart of this is the minimum health package.Service delivery is being improved by a number of mechanisms including better remuneration and training, better infrastructure, and better accountability to consumers thr ough village health committees. The pro-poor implementation of cost-recovery will require the successful identification of targeting mechanisms, perhaps geographically based. AIDS and population growth raise cross-cutting issues. Water and sanitation are being supported by major public interventions, with communities paying a small proportion of the investment costs and being responsible for the maintenance of the facilities.Community sensitisation on water-borne disease and on the need for maintenance is therefore critical. Adult literacy is likely to be made an element of PAF from this year its benefits are potentially very considerable, as literacy has been directly found to increase agricultural productivity and evidence suggests it will also influence health outcomes. Housing is a private sector responsibility, but the state can encourage the availability of low-cost housing. Contents4.Macroeconomic stability, medium- and long-term expenditure implications of the PEAPMacroecono mic stability and the macroeconomic frameworkIn the medium term (three years), Governments strategy for fighting poverty is reflected in the Medium Term Expenditure Framework (MTEF) and the expenditure priorities which are incorporated into the MTEF. The MTEF is itself fully integrated into a macroeconomic framework which is designed to ensure low inflation of no more than 5% and to support rapid broad based real GDP growth of 7% per annum. In the first year of the MTEF, 2000/01, inflation may be higher and growth lower than the medium term targets because of the lagged impact of the external terms of trade puff which Uganda suffered in 1999/2000). The transfer rate will continue to be market determined, with the Bank of Uganda intervening only to dampen excessive volatility in the exchange rate and to maintain net international reserves at a level which is consistent with the targets in the PRGF programme (these targets will be based on the objective of maintaining gross foreign reserves at a minimum of ive months of imports of goods and non factor services). Macroeconomic policy will be accompanied by a deepening of structural reforms in key areas including the banking and financial system, public utilities and the transport infrastructure, which are aimed at removing key constraints to private sector growth, and reforms to improve the efficiency and quality of public services. The key linkages between the MTEF and the macroeconomic framework are via the domestic borrowing requirement and the projected net inflows of external financing.The MTEF is consistent with both the levels of donor support projected over the medium term, relatively conservative projections of domestic revenue mobilisation and domestic bank borrowing which is consistent with the monetary objectives discussed in the next paragraph. The increased expenditures on programmes and projects specifically targeted on poverty reduction (for example, expenditures under the Poverty Action Fund (P AF) are projected to increase from 2. 9% of GDP in 1998/99 to 4. 6% of GDP in 2000/01) are fully consistent with the Governments macroeconomic objectives.Increased expenditures on the PAF will be funded by increased donor support, including debt relief made available under the enhanced HIPC initiative, and by restraint in the growth of non priority expenditures. The overall fiscal deficit, excluding grants, is projected to rise from the programmed 8. 1% of GDP in 1999/2000 to 9. 7% of GDP in 2000/01, before declining to 8. 7% and 8. 2% of GDP in 2001/02 and 2002/03 respectively. Donor support, net of external amortisation, is projected at 10. 4%, 10. 1% and 9. % of GDP respectively in 2000/01, 2001/02 and 2002/03, and will therefore more than cover the projected fiscal deficits, allowing Government to garner savings with the domestic banking system and the non bank private sector. Annex Table 2. 1 refers. The medium term monetary objectives are to maintain a rate of growth of broad money (M2) of 15% per annum which is required to hold core inflation (which excludes food crop and fuel prices) to no more than 5% per annum. This rate of money supply growth is consistent with the projected increase in money demand given projected growth of nominal GDP (averaging 12. % per annum) and a decline in the velocity of circulation of circulation of an average of 2. 2% per annum. Private sector credit is projected to expand by 15% per annum in nominal terms. This will allow private sector credit to gradually increase as a share of GDP. The growth in the net foreign assets of the Bank of Uganda will be determined primarily by the objective of maintaining gross foreign reserves at a minimum of five months of imports. Consistent with these objectives, Government is projected to accumulate savings in the domestic banking system of Shs 14 billion (0. 14% of GDP) in 2000/01, Shs 89 billion (0. 1% of GDP) in 2001/02 and Shs 95 billion (0. 77% of GDP) in 2002/03. Annex Table 2. 4 refers. The trade deficit (denominated in dollars) is projected to widen in 2000/01 because of the impact of the external terms of trade shock, which will depress export earnings. However the increase in the trade deficit will be largely offset by the projected rise in official and private transfers. As a percentage of GDP, the current account deficit (including transfers and FDI) will rise from the outturn of 4. 1% in 1998/99 to a projected 4. 6% of GDP in 2000/01, before declining to 3. 8% and 3. % of GDP in the following two years. The capital account is projected to remain in surplus, which together with the debt relief provided under the HIPC and enhanced HIPC initiatives, will enable the Bank of Uganda to accumulate net international reserves of $58 million in 2000/01, $108 million in 2001/02, and $116 million in 2002/03. This is sufficient to maintain gross reserves at the target level of five months of imports of goods and non factor services. Annex Table 2. 3 refers. Annex Table 2. 1 summarises projected investment and savings. Public investment is projected at 7. 4% of GDP in 1999/2000 and 7. %, 7. 3% and 7. 0% in the next three years. Public savings are projected at 5. 1% of GDP in 1999/2000 and 5. 0%, 5. 0% and 4. 7% in the next three years. Private investment is projected at 10. 3% of GDP in 1999/2000, rising to 10. 5%, 12. 8% and 12. 9% in the next three years. Finally, private savings are projected to fall to 8. 1% of GDP in 1999/2000, recovering to 8. 7%, 11. 2% and 11. 5% in the next three years. The Medium-Term Expenditure FrameworkThose aspects of the PEAP which have implications for public expenditure will be implemented through the medium-term expenditure framework.This framework is presented to Cabinet as part of the annual Budget Framework Paper (BFP), covering three fiscal years. The objective of the MTEF is the design of all public expenditure by a clear analysis of the link between inputs, outputs and outcomes, in a framework which e nsures consistency of sectoral expenditure levels with the overall resource constraint in order to ensure macroeconomic stability and to exploit the efficiency of public expenditure in attaining predetermined utcomes. Ultimately, these medium-term objectives need to be consistent with the longer-term objectives defined by the PEAP so the PEAP will be used to guide reallocations of expenditure. The sectoral implications of the PEAP objectives are reflected in the design of sectoral strategies which in turn guide the expenditure allocations made each year under the MTEF. The MTEF is intended to guide all public expenditure including the use of resources committed by donors.For this reason, the Government is introducing a sector-wide approach wherever feasible, under which government and donors contribute to a common pool of resources used to achieve the sectoral objectives. The flexibility which this arrangement allows is essential to the efficient use of public expenditure,. because only in a sector-wide approach can the overall implications of a national programme within each sector be considered, and because a sector-wide approach can reduce duplications of effort by different projects and divergences of cost structure between projects and other public activities.Using the PAF to prioritise public expenditureThe PEAP of 1997 drew particular attention to the need for increased expenditure on the delivery of those services which directly benefit the poor. It was recognised that in Uganda, as in most other countries, there could be a tendency to neglect the interests of the poor unless a conscious effort was made this is one implication of the observation that powerlessness is one aspect of poverty. Since 1997, the institution of the Poverty Action Fund has been used to achieve the planned reallocations.The PAF has three essential elements for this objective. First, no expenditure is included in PAF unless its direct poverty benefits are clearly demonstrated. S econdly, the use of funds in the PAF is subject to particularly stiff monitoring procedures in which civil society actively participates. Thirdly, the use of funds for PAF activities is clearly additional to the levels achieved in the 1997/8 budget. Most of the areas included in the PAF consist of service delivery which directly benefits poor people, rather than administration.In order to achieve the increase in spending on service delivery and on infrastructure, it is necessary to keep administration lean. Government will continue to endeavour to make its administrative elements as lean as possible and to avoid the proliferation of administrative structures which can impose serious fiscal costs. Poverty priorities and the PAF The PAF (summarised in Table 4. 1) includes the most high-priority public expenditures from the poverty-eradication perspective.Inclusion of a particular sector or programme in the PAF is warrant by the high economic and/or social returns to the form of expe nditure, by the fact that a substantial proportion of the benefits of expenditure in that area are received by the poor, and by the priority which participatory work has shown the poor themselves attach to that area. Areas already included in the PAF include rural roads, agricultural extension, primary health, primary education, water supply, and equalisation grants whose purpose (defined in the Constitution) is to make the quality of service del