100005 Uganda Country Assistance Evaluation, 2001-2007 Joint IEG/OPEV Country Assistance Evaluation 2009 The World Bank http://www.worldbank.org/ieg Washington, D.C. International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: feedback@worldbank.org All rights reserved 1 2 3 4 13 12 11 09 This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank Group. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data in this work. The boundaries, colors, deno- minations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a viola- tion of applicable law. The International Bank for Reconstruction and Development / The World Bank encourages a dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; Internet: www.copyrights.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street, NW, Washington, DC 20433, USA: fax:202-522-2422; email:pubrights@worldbank.org. ISBN: 978-1-60244-141-5 Library of Congress Cataloging-in-Publication data have been applied for. World Bank InfoShop Independent Evaluation Group E-mail: pic@worldbank.org Communications, Strategy, and Learning Telephone: 202-458-5454 E-mail: ieg@worldbank.org Facsimile: 202-522-1500 Telephone: 202-458-4497 Facsimile: 202-522-3125 ii Contents ABBREVIATIONS ............................................................................................................................................... VII  ACKNOWLEDGEMENTS .................................................................................................................................... IX  FOREWORD......................................................................................................................................................... XI  PREFACE ........................................................................................................................................................... XIII  SUMMARY OF WORLD BANK PROGRAM OUTCOME RATINGS* ................................................................. XV  SUMMARY OF AFRICAN DEVELOPMENT BANK PROGRAM OUTCOME RATINGS* ................................ XVII  EXECUTIVE SUMMARY .................................................................................................................................... XIX  MANAGEMENT ACTION RECORD................................................................................................................. XXV  CHAIRPERSON’S SUMMARY: COMMITTEE ON DEVELOPMENT EFFECTIVENESS ............................... XXIX  CHAPTER 1............................................................................................................................................................1  COUNTRY BACKGROUND ...................................................................................................................................1  Country Context ...................................................................................................................................................... 1  Conclusions from Previous Evaluations .............................................................................................................. 2  Study Approach and Report Structure.................................................................................................................. 2  CHAPTER 2............................................................................................................................................................5  STRATEGY AND ASSISTANCE PROGRAM ........................................................................................................5  Objectives of the Assistance Program ................................................................................................................. 5  Translating Objectives into Programs .................................................................................................................. 6  Overall Assessment .............................................................................................................................................. 12  CHAPTER 3..........................................................................................................................................................13  PROMOTING GOOD GOVERNANCE .................................................................................................................13  Key Governance Challenges................................................................................................................................ 13  iii World Bank and AfDB Governance Strategies ................................................................................................... 14  Achievement of Objectives and Assessment of Outcomes .............................................................................. 15  Conclusion ............................................................................................................................................................. 19  CHAPTER 4..........................................................................................................................................................21  THE GROWTH AGENDA .....................................................................................................................................21  Key Challenges ..................................................................................................................................................... 21  World Bank and AfDB Strategies ........................................................................................................................ 22  Achievement of Objectives and Assessment of Outcomes .............................................................................. 22  Conclusion ............................................................................................................................................................. 35  CHAPTER 5..........................................................................................................................................................37  THE CHALLENGE OF HUMAN DEVELOPMENT ...............................................................................................37  World Bank and AfDB Strategies ........................................................................................................................ 37  Achievement of Objectives .................................................................................................................................. 39  Assessment of Country Outcomes ..................................................................................................................... 43  Conclusion ............................................................................................................................................................. 51  CHAPTER 6..........................................................................................................................................................53  EVALUATION OF IFC ACTIVITIES .....................................................................................................................53  Background ........................................................................................................................................................... 53  IFC Objectives ....................................................................................................................................................... 53  Achievement of IFC’s Objectives and Assessment of Outcomes .................................................................... 54  The IFC’s Contribution to Private Sector Development .................................................................................... 59  IFC Additionality in Uganda ................................................................................................................................. 64  Assessment of IFC Performance ......................................................................................................................... 65  Lessons.................................................................................................................................................................. 67  CHAPTER 7..........................................................................................................................................................69  HARMONIZATION AND PARTNERSHIP ............................................................................................................69  Background ........................................................................................................................................................... 69  Harmonization Mechanism in Uganda ................................................................................................................ 71  World Bank and AfDB Support for Harmonization ............................................................................................ 72  iv Donor Alignment and the UJAS ........................................................................................................................... 75  Assessment of Relationship Management ......................................................................................................... 78  Conclusion ............................................................................................................................................................. 80  CHAPTER 8..........................................................................................................................................................81  CONCLUSIONS AND RECOMMENDATIONS ....................................................................................................81  Overall Assessment .............................................................................................................................................. 81  Lessons.................................................................................................................................................................. 85  Recommendations ................................................................................................................................................ 86  ANNEXES ANNEX A: STATISTICAL SUPPLEMENT ...........................................................................................................89  ANNEX B: GUIDE TO INDEPENDENT EVALUATION GROUP’S (WORLD BANK) COUNTRY ASSISTANCE EVALUATION METHODOLOGY .......................................................................................................................114  ANNEX C: STRATEGIC OBJECTIVES AND BENCHMARKS..........................................................................118  ANNEX D: ACHIEVEMENT OF OBJECTIVES ..................................................................................................125  ANNEX E: THE POVERTY REDUCTION SUPPORT CREDITS, I-VI................................................................134  ANNEX F: GOVERNMENT COMMENTS ..........................................................................................................145  ANNEX G: LIST OF PEOPLE CONTACTED.....................................................................................................146  ANNEX H: REFERENCES ................................................................................................................................154  Boxes Box 1. Recommendations of Previous Country Assistance Evaluations.................................................................3  Box 2. A Bank Study of the 2005 Assessment of the Uganda Analytic and Advisory Activities ..............................9  Box 3. Power Sector Reforms ...............................................................................................................................30  Box 4. Examples of Additionality Identified in Uganda’s Operations ....................................................................65  Box 5. Findings of the World Bank’s Client Survey ...............................................................................................78  v Tables Table 1: World Bank Commitment by Sectors, Fiscal Years 2001–07 (in US$ million) .........................................7  Table 2: World Bank Summary of Evaluation Findings ..........................................................................................8  Table 3: World Bank –Costs of Operations and Analytic and Advisory activities, Fiscal years 2001–07 (as percentage of total commitment) ..........................................................................................................................10  Table 4: AfDB—Summary of Evaluation Findings ................................................................................................11  Table 5: World Bank: Support for the Governance Agenda .................................................................................15  Table 6: AfDB Support for the Governance Agenda ............................................................................................17  Table 7: Poverty and Income Inequality Trends, 1999/2000—2005/2006 ........................................................... 23  Table 8: World Bank Support for Growth and Macroeconomic Stability ..............................................................24  Table 9: AfDB Support for Growth and Macroeconomic Stability.........................................................................25  Table 10: World Bank Support for Enhancing the Economy’s Competitiveness ..................................................26  Table 11: AfDB Support for Enhancing the Economy’s Competitiveness .............................................................28  Table 12: World Bank Project-Based Support for Human Development..............................................................41  Table 13: Ratings of AfDB-Supported Projects on Human Development ............................................................ 43  Table 14: Health Performance Indicators 2001-07 ..............................................................................................44  Table 15: Education Performance Indicators Fiscal Years: 2001–07 ..................................................................45  Table 16: World Bank Support to the Human Development Agenda ....................................................................47  Table 17: AfDB Support to the Human Development Agenda .............................................................................50  Table 18: New Investments in Uganda Benchmarked against Comparator Countries, Fiscal Years 1999–2008 56  Table 19: Overview of Development Partners’ Current Engagement ...................................................................77  Table 20: Summary of Outcome Ratings for World Bank Assistance ..................................................................82  Table 21: Summary of Outcome Ratings for African Development Bank Assistance ..........................................84  vi Abbreviations AfDB African Development Bank ADF African Development Fund AEF Africa Enterprise Fund APL Adjustable program loan CAE Country Assistance Evaluation CAS Country Assistance Strategy CASCR Country Assistance Strategy Completion Report CSP Country Strategy Paper DFCU Development Finance Company of Uganda Limited FDI Foreign direct investment GBS General Budget support GDP Gross domestic product GNI Gross national income HIPC Heavily Indebted Poor Countries HSSP Health Sector Strategic Plan IDA International Development Association IEG Independent Evaluation Group IFC International Finance Corporation of the World Bank Group IMF International Monetary Fund LGDP Local Government Development Project M&E Monitoring and evaluation MAAIF Ministry of Agriculture, Animal Industry and Fisheries MDG Millennium Development Goal MDRI Multidonor Debt Relief Initiative MTEF Medium-Term Expenditure Framework MW Megawatt NEMA National Environmental Management Agency ODA Official development assistance OECD Organization for Economic Cooperation and Development OPEV Operations Evaluation Department of the AfDB PAF Poverty Action Fund PEAP Poverty Eradication Action Plan PCR Project Completion Report PER Public Expenditure Review PMA Plan for Modernization of Agriculture PPAR Project Performance Assessment Report PRGF Poverty Reduction and Growth Facility PRSC Poverty Reduction Support Credit PRSL Poverty Reduction Support Loan PRSP Poverty Reduction Strategy Paper PSD Private Sector Development SIL Specific investment loan SME Small and Medium Enterprise SWAp Sectorwide approach UA Unit of Account (for the ADF) UEB Uganda Electricity Board UJAS Uganda Joint Assistance Strategy WSS Water Supply and Sanitation All $ amounts are U.S. dollars. vii Acknowledgements The report was prepared by James Sackey (Task Manager for IEG) and Foday Turay (Task Manager for OPEV), with background papers and other substantive inputs from Luis Alva- ro Sanchez, Svenja Weber-Venghaus, Tim L. De Vaan, Albert-Eneas Gakusis, Erisa Ochieng, Yona Kanyomozi, and Bernard Bashaasha. This evaluation benefited from the comments from peer reviewers Ray Rist (Consultant, IEG) and Getinet Giorgis (Consultant, OPEV). In addition to line managers, the following World Bank staff provided written comments: Peter Nigel Freeman, Denise Vaillancourt (IEGSE), Andrew Warner (IEGCG), and Alex Mckenzie (IEGKE). In addition, the following African Development Bank staff also pro- vided comments: Douglas Barnett (OROR), Damoni Kitabire (OSGE), and Puetz Detlev (OPEV). Cecilia B. Tan provided administrative support, Tom Yoon and Nik Harvey set up the team Web site, and William Hurlbut provided editorial support. Kechelf Sarhan compiled the AfDB references and data, and Joseph Mouanda assisted in validating the AfDB’s assistance performance ratings. The report includes a contribution (as Chapter 6) by the Independent Evaluation Group- International Finance Corporation (IEG-IFC), prepared by Maria Elena Pinglo (Evaluation Analyst – Task Manager), Asita De Silva (Senior Evaluation Officer), and Jan-Peter Wogart (Consultant) under the direction of Stoyan Tenev (Head, Macro Evaluation) and Amitava Banerjee (Manager). Director-General, Evaluation: Vinod Thomas Director, Independent Evaluation Group— World Bank: Cheryl W. Gray Senior Manager, Independent Evaluation Group—World Bank: Ali Khadr Director, OPEV—African Development Bank: Colin Kirk Task Manager, Independent Evaluation Group—World Bank: James Sackey Task Manager, OPEV—African Development Bank: Foday Turay ix Foreword This joint Country Assistance Evaluation (CAE) report has been prepared by a joint team from the Independent Evaluation Group (IEG) of the World Bank and the Operations Evaluation Department (OPEV) of the African Development Bank (AfDB). It reviews the assistance provided by the World Bank and the AfDB to Uganda during 2001-2007 based on the fiscal years 2001-03 World Bank Country Assistance Strategy, the 2002-04 AfDB Country Strategy Paper, and the Ugan- da Joint Assistance Strategy. These strategies focused on promoting governance, growth, and hu- man development, and were pursued through a net commitment of $2.1 billion by the International Development Association (fiscal years 2001–07) and $732 million equivalent (2002-07) by the Afri- can Development Fund. The assessment concluded that the World Bank’s assistance strategies showed strong client orientation and were aligned with Uganda’s poverty reduction strategy. The programs were substan- tially effective in decentralization, public sector reform, growth and economic transformation, educa- tion, and water and sanitation. However, more could have been done to help: (i) counter the percep- tion of increasing corruption; (ii) improve power supply; (iii) reduce transport costs; (iv) enhance agricultural productivity and; (v) help with family planning and reproductive health. The assessment also concluded that the assistance provided by the AfDB was relevant and aligned with the government’s development goals. AfDB support substantially achieved its objec- tives for decentralization, public sector finance, growth and economic transformation, improved competitiveness, agriculture, and water and sanitation, as well as education and health. However, there were some shortcomings in the assistance provided for power and roads and in reducing cor- ruption. Based on lessons from the evaluation, many of which reinforce those of previous separate IEG and OPEV country assistance evaluations, IEG recommends that the World Bank: (i) support the development of an analytic framework to guide Uganda’s decisions on governance reform; (ii) encourage and help the government in developing medium-to-long-term master plans for infrastruc- ture; and (iii) assist in coordinating ongoing monitoring and evaluation initiatives through a single framework. OPEV recommends that the AfDB relocate sector specialists closer to the client; seek dee- per engagement in a limited set of priorities; and undertake regular (perhaps joint) analytic work and project self-evaluation to underpin its strategy and project assistance. It is also recommended that both banks reinforce the effectiveness of general budget support as an instrument for minimizing transaction costs and facilitating the use of country systems. xi Preface This joint Country Assistance Evaluation (CAE), prepared by the Independent Evaluation Group (IEG) of the World Bank and the Operations Evaluation Department (OPEV) of the African Development Bank (AfDB), reviews the assistance provided by the World Bank and the AfDB to Uganda during 2001-07. Since the assistance provided by the two banks was not jointly-financed, the report examines whether: (a) the objectives of the assistance of the two banks were the “right” ones given the country context and the mandate of each bank; (b) the designs of the banks’ assistance programs were appropriate, effective, and consistent with their associated objectives; and (c) the program and interventions of each bank achieved their objectives and contributed (or are likely to contribute) to the intended out- comes. Examining these questions allows the joint CAE to draw lessons and recommenda- tions for future assistance, either individually or collectively. Annex B describes the metho- dological framework. The joint CAE is based on a comprehensive review of relevant documents and evaluations: (i) IEG/OPEV background papers covering the main building blocks of the banks’ support to Uganda; (ii) relevant parts of recent sectoral, thematic, and “corporate” evaluations; (iii) project assessments, including Implementation Completion Reports, Project Completion Reports (PCRs), and IEG reviews and Project Performance Assessment Reviews (PPARs). In addition, interviews were conducted with senior Ugandan government officials, representa- tives of the private sector and civil society (including local and international nongovern- mental organizations), bilateral and multilateral development partners, World Bank and In- ternational Monetary Fund (IMF) staff in Washington and in Uganda, and the AfDB staff in Tunis and Uganda. A list of persons interviewed during report preparation, including those in Uganda during the IEG/OPEV mission in January/February 2008, is provided in Annex H. Comments from the World Bank and AfDB operational teams were received on November 21, 2008, and November 30, 2008, respectively, along with the World Bank and AfDB operational teams’ responses to the Management Action Record (MAR). These comments have, to the ex- tent possible, been addressed in the report. A draft of the joint CAE was shared with the gov- ernment, but no official comments were received. The Chairman’s Summary of the Commit- tee on Development Effectiveness (CODE) is also attached. xiii Summary of World Bank Program Outcome Ratings* IEG’s Country Assistance Evaluations (CAEs) assess and rate the outcomes (the “results”) of a given World Bank country program relative to its objectives. This differs from rating country outcomes or Bank or client government performance. The central question underlying the table that follows is: “To what extent did the World Bank program achieve the outcomes that it set out to achieve?” Distinct ratings and sub-ratings are typically assigned to each “pillar” or set of strategic goals outlined in the relevant Bank strategy document(s) (see annex B). Country Assis- Achievement of Associated Country Assistance Strategy tance Strategy World Bank Program Results Goals Outcome Ratings Moderately Governance Satisfactory Financial management and accountability reforms supported under local gov- ernment yielded positive results in building institutions and enhancing capacity. Decentralization Satisfactory Program achieved targets established under Local Government Development Project grant. Limited capacity in ministries, departments, and agencies did not permit the Public Sector institutionalization of the results-based approach to public service manage- Moderately Reform ment. Expected pay reform was also not fully achieved. Support for financial Satisfactory management reforms yielded positive results. Support to improve accountability has not significantly reduced the perception of high corruption. Government effectiveness is perceived not to have im- Moderately Anti-Corruption proved. Use of Poverty Reduction Support Credit did not facilitate governance Unsatisfactory reform, as the direct links between Bank support and outcomes were not clear. The analytic basis for governance reform was limited. Moderately Growth Satisfactory Growth was moderate and only slightly off expected target, but World Bank analytic support was not particularly timely. Fiscal prudence was maintained, Growth & although arrears remained due to implementation weaknesses with the Me- Satisfactory Macro-Stability dium-Term Expenditure Framework. Domestic revenue mobilization was mod- est. The government’s aid dependence remains high with likely implications for “Dutch disease.” World Bank support, with IMF collaboration, helped to deepen the financial sector, promote privatization, and improve the regulatory environment. None- PSD and Moderately theless, the economy’s competitiveness was not significantly enhanced be- Competitiveness Satisfactory cause of failure to resolve the power issue, substantially reduce road transport cost, and improve access of SMEs to financial sector services. Support for agriculture, although focused, emphasized institutional capacity- building too heavily. Support for the National Environmental Management Agriculture and Moderately Agency has improved the focus on the preservation of the natural environment. Environment Satisfactory But the analytic work was not matched by comparable operations. Current sta- tus of agriculture productivity is unknown. Human Moderately Development Satisfactory Despite improved access and citizens’ satisfaction with public health service delivery, there remain unsatisfactory outcomes in family planning and reproduc- Moderately Health tive health. Poverty Reduction Support Credits have declined as effective in- Unsatisfactory struments for dealing with specific health sector issues. xv CHAPTER 1 COUNTRY BACKGROUND Country Assis- Achievement of Associated Country Assistance Strategy tance Strategy World Bank Program Results Goals Outcome Ratings Support has: (i) yielded equitable coverage, especially for girls; (ii) provided institutional strengthening by meeting output targets established in the Poverty Eradication Action Plan; and (iii) sustained resource flow to the sector through Moderately Education Poverty Reduction Support Credits. Support was unable to deal with inefficien- Satisfactory cy issues and concerns with Uganda’s attainment of the Millennium Develop- ment Goal 2. Support through the Poverty Reduction Support Credits to local governments helped exceed all Country Assistance Strategy performance targets (protected springs, boreholes drilled, and new wells constructed). Both rural and urban Water & Sanitation access to safe water showed major improvement, on track to exceed the corre- (service delivery Satisfactory sponding Millennium Development Goal targets. There was limited progress in aspects) sanitation provision and hygiene mitigation, with potential negative effects on the achievement of Millennium Development Goals in the area of infant, child and maternal mortality. * As emphasized in several places in the CAE, the World Bank and AfDB ratings should not be compared. Notes: AfDB=African Development Bank; CAE=Country Assistance Evaluation; IMF= International Monetary Fund; SME=small and me- dium enterprises. xvi Summary of African Development Bank Program Outcome Ratings* The African Development Bank’s (AfDB) Operations Evaluation Department’s Country Assistance Evaluations (CAEs) as- sess and rate the outcomes (the “results”) of a given African Development Bank country program relative to its objectives. This differs from rating country outcomes or AfDB Bank or client government performance. The central question underlying the table that follows is “to what extent did the African Development Bank program achieve the outcomes that it set out to achieve?” Distinct ratings and sub-ratings are typically assigned to each “pillar” or set of strategic goals set out in the rele- vant Bank strategy document(s) (see annex B). AfDB Program Country Strategy Outcome Achievement of Associated Country Strategy Paper Results Paper Goals Ratings Moderately Governance Satisfactory Assistance provided by the AfDB helped strengthen institutions and human capacity in fi- Decentralization nancial management and accountability of local government. This contributed to improved Satisfactory access to basic services. Public Sector Support for procurement reform has not yet yielded the expected results. Support for finan- Moderately Management cial management has helped the government to achieve expenditure targets with respect to Satisfactory Reforms poverty spending. Support for accountability and training to facilitate the reduction in corruption has not Moderately Anti-corruption helped to reduce significantly the perception of high corruption. Government effectiveness Unsatisfactory is perceived not to have improved through the assistance provided for audit systems. Moderately Growth Satisfactory Growth, Fiscal AfDB’s contribution was substantial in achieving poverty-reducing expenditure targets. Fis- Reform, and Export cal prudence was maintained, although arrears remain. Revenue mobilization remains Satisfactory Diversification weak. Substantial progress was made on export diversification. Private Sector Devel- Focus on rural finance helped improve availability of lines of credit to SMEs. Support for Moderately opment/SME Devel- communal roads is helping open up the rural areas. Overall, the economy’s competitive- opment and ness was not significantly enhanced because of the failure to resolve the power issue and Satisfactory Competitiveness to substantially reduce transport costs. Diversified approach to supporting agriculture yielded mixed results: sustained growth of agriculture of 3 percent has not been achieved, but the integrated approach is helping re- Satisfactory Agriculture duce soil degradation, commercialize traditional agriculture, and develop fisheries and li- vestock. Human Moderately Development Satisfactory Improvements in regional access to mental health and primary health care services were achieved. But severe shortages of staffing and drugs continued to limit effective access to Moderately Health Satisfactory mental health care. The lack of adequate monitoring and evaluation program support was also a shortcoming. Increases to both access and quality of education occurred, but quality improvements were limited by the timeliness and quality of the delivery, as well as by the relatively high demand Moderately Education Satisfactory for education. The education system in Uganda still faces high drop-out rates and low tran- sition rate from primary to post-secondary education. Water & Sanitation Support from the Small Towns Water project helped exceed all Country Strategy Paper (service delivery as- performance targets (protected springs, boreholes drilled, and new wells constructed). Both Satisfactory pects) rural and urban access to safe water showed major improvement, on track to exceed the xvii CHAPTER 1 COUNTRY BACKGROUND AfDB Program Country Strategy Outcome Achievement of Associated Country Strategy Paper Results Paper Goals Ratings corresponding Millennium Development Goal target. Relative neglect of sanitation provi- sion and hygiene mitigation could have potential negative effects on achievement of Mil- lennium Development Goals in the area of infant, child and maternal mortality. * As emphasized in several places in the CAE, the World Bank and AfDB ratings should not be compared. Notes: AfDB= African Development Bank; CAE=Country Assistance Evaluation; SMEs= small and medium enterprises. xviii Executive Summary The World Bank and the African Development Bank programs in Uganda covering the years 2001– 07 were contained in the fiscal year 2001–03 World Bank Country Assistance Strategy (CAS), the 2002-04 AfDB Country Strategy Paper (CSP), and the Uganda Joint Assistance Strategy (UJAS). These strategies focused on promoting governance, growth, and human development. Net program commitments of $2.1 billion by the International Development Association (fiscal year 2001–07) and $732 million equivalent (2002–07) were made by the African Development Fund. The World Bank’s assistance strategies showed strong client orientation and were aligned with Uganda’s poverty reduction strategy. The programs were substantially effective in decentralization, public sector reform, growth and economic transformation, education, and water and sanitation. However, more could have been done to help counter the perception of increasing corruption, im- prove power supply, reduce transport costs, enhance agricultural productivity, and help with family planning and reproductive health. The AfDB’s assistance was also relevant and aligned with the government’s development goals. Its support substantially achieved its objectives for decentralization, public sector finance, growth and economic transformation, improved competitiveness, agriculture, and water and sanitation, as well as education and health. However, there were some shortcomings in the assistance provided for power and roads and in reducing corruption. The International Finance Corporation’s (IFC’s) main contribution has been in telecommunications, as well as in playing a substantial role in providing assistance for institutional and regulatory reforms in leasing, and in supporting the supply response to these reforms. Limited impact was seen in small and medium enterprise (SME) access to finance, despite significant joint effort with the World Bank. The Independent Evaluation Group (IEG) of the World Bank recommends that the World Bank sup- port the development of an analytic framework to guide Uganda’s decisions on governance reform; en- courage and help the government in developing medium-to-long-term master plans for infrastructure; and assist in coordinating ongoing monitoring and evaluation initiatives through a single framework. AfDB’s Operations Evaluation Department (OPEV) recommends that the AfDB relocate sector spe- cialists closer to the client; seek deeper engagement in a limited set of priorities; and undertake regular (perhaps joint) analytic work and project self-evaluation to underpin its strategy and project assistance. It is recommended that both banks reinforce the effectiveness of general budget support as an instru- ment for minimizing transaction costs and facilitating the use of country systems. This report evaluates World Bank and African Development Bank assistance to Uganda during 2001–07. The motivation to undertake a joint evaluation was the shift to a common strategic frame- work, the Uganda Joint Assistance Strategy (UJAS), to guide the formulation and delivery of their programs. Under a common strategic framework joint evaluation is, in principal, more cost effective than the equivalent separate evaluations, since at least some aspects of the evaluation can be done together. This also helps to reduce government transaction costs. The evaluation discusses the outcome of the support of each bank, rates each independently, noting that the two banks are of different size, capacity, and institutional setting. In addition, the two banks xix CHAPTER 1 COUNTRY BACKGROUND have programs that were not implemented jointly but in parallel, although they regularly engaged with one another as development partners. The outcome ratings for the two institutions are there- fore not comparable and should not be used to imply that one institution did “better” than the other. Country Background With a population of 29.9 million (2006 estimate) and per capita income of $300 (Atlas method, 2006), Uganda is considered one of the world’s poorest countries; it is ranked 154 out of 177 coun- tries by the UN Human Development Index (2007). In 1986, Uganda emerged from civil war with an economy shattered by misrule and conflict. The new government’s post-conflict program was directed at economic rehabilitation and stabilization and resulted in a per-capita growth rate of 3.3 percent in the 1990s, a rate that exceeded the average for sub-Saharan Africa. Sound macroeconomic policies contained debt and stabilized prices, and po- verty rates declined (with the head-count ratio of poverty falling from 56 percent in 1992 to 34 per- cent of the population in 2000). World Bank and AfDB Assistance Assistance during the period 2001–07 was delivered under the fiscal year 2001-03 World Bank Coun- try Assistance Strategy (CAS), the 2002–04 AfDB Country Strategy Paper (CSP), and the first two years of the UJAS, 2005–2009. All the strategy documents emphasized the promotion of good go- vernance, support for growth and poverty reduction, and the enhancement of service delivery in education, health, and water and sanitation. Although the CAS and CSP were aligned with Uganda’s Poverty Eradication Action Plan (PEAP, the title of its Poverty Reduction Strategy Paper), the UJAS was also the mechanism for enhanced donor alignment on a common set of priorities. The World Bank and AfDB together disbursed about $1.9 billion ($1.6 billion from the International Development Association and $282 million from the Africa Development Fund), constituting about 29 percent of total overseas development assistance to Uganda during calendar years 2001-06. Commitments of IDA credits and grants totaled $2.1 billion during Fiscal year 2001–07, about 40 percent of which was budget support provided through Poverty Reduction Support Credits. Apart from a single Poverty Reduction Support Loan of UA40 million, the AfDB focused on investment projects, with total commitment of UA492 million, or $732 million, during 2002–07. The World Bank also carried out an extensive program of analytic and advisory activities dominated by diagnostic economic and sector work, most notably annual public expenditure reviews. Although these had significant impact, the relevance of the Bank’s analytic and advisory activities could have been en- hanced with studies focused on anti-corruption, civil service reforms, and population growth, and with more timely coverage of growth issues, as was done in the 2007 Country Economic Memorandum. The AfDB delivered a few pieces of analytic work, but depended largely on the World Bank and other development partners for such analysis. Assessment of the World Bank’s Contribution The overall outcome of the World Bank’s support is rated “moderately satisfactory.” This reflects the combined ratings for the relevance of objectives, design factors, choice of instruments, and efficacy. Regarding relevance, the World Bank’s strategies and supporting programs showed strong client orien- tation and emphasized technical quality, especially the analytic work and project preparation that un- derpinned its interventions. Moreover, by addressing complex policy and institutional development is- sues in governance, growth, and human development, the level and scope of support was comparable xx CHAPTER 1 COUNTRY BACKGROUND to what the World Bank provided to countries with development needs similar to that of Uganda. Al- though it is not possible to evaluate the efficiency of the World Bank’s support, the resources were used to meet the targets proposed in the CAS and reflected CAS objectives. The analytic and advisory activities were cost-effective and complemented the lending program, and portfolio performance was close to the World Bank’s average. The World Bank’s assistance was substantially effective and achieved its objectives for decentraliza- tion, public sector reform, growth and economic transformation, education, and water and sanita- tion. Public sector reform, including financial management and accountability reforms, supported by general budget support and capacity-building, helped enhance institutions and service delivery in ra- pidly expanding local government structures. Along with the International Monetary Fund (IMF) and other development partners, the World Bank’s policy dialogue helped the government maintain a prudent fiscal stance throughout the period, although analytic work on the slow-down of growth was not timely. Support for education and health helped to increase coverage, improve access, and establish a framework for better service delivery. Bank support achieved modest outcomes in key areas of the government’s poverty reduction agenda. The support was not fully successful in helping to counter the perception of increasing corruption, promoting a competitive business environment through improved supply of power and reduced transport costs, enhancing agricultural productivity, or helping with family planning and reproductive health. Assessment of the AfDB’s Contribution The overall outcome of AfDB’s support is rated “moderately satisfactory.” This rating should be con- sidered against a backdrop of AfDB’s limited resource base, its strategic selection of areas in which to intervene, and the role played by other development partners. The AfDB aligned its strategies with the Poverty Eradication Action Plan (PEAP) and provided selective assistance by complementing the ac- tivities of other development partners, including the World Bank. However, the efficiency of resource use on targets set in the CSP was lower than expected given the long project effectiveness and gesta- tion periods, which tended to impede the timely realization of project benefits. AfDB’s assistance was substantially effective in achieving its objectives for decentralization, public sector reform, growth and economic transformation, improved competitiveness, agriculture, water and sanitation, and health and education. The AfDB complemented the efforts of other develop- ment partners, notably the World Bank, in supporting decentralization through capacity building and institutional support. Its assistance was particularly important in improving access to potable water supply through its small-town and rural water projects, as well as to mental health, primary health care, and education services. Its diversified approach to agriculture through support for fisheries and livestock is likely to improve rural incomes. In other areas, AfDB’s support was less effective. For example, its anti-corruption efforts needed refocusing and quality issues in healthcare and primary education needed to be addressed. IFC’s Assistance The IFC’s activities in Uganda covered the period between 1999 and 2008. IFC’s set of objectives included support for the development of infrastructure, financial and social sectors, and the growth of small scale enterprises, with special emphasis on empowering women entrepreneurs. During this period, the IFC invested US$178 million in 10 projects in Uganda, encompassing: power, telecom- munications, financial sectors, and small investments in agribusiness and education. xxi CHAPTER 1 COUNTRY BACKGROUND The IFC also undertook advisory services operations that focused predominantly on infrastructure (52 percent) and access to finance (33 percent). These operations supported privatization, large infra- structure projects, telecommunications, small and medium enterprise (SME) growth, access to finance for woman entrepreneurs, and mortgage finance. Assessment of IFC’s Contribution The IFC’s main contribution has been in telecommunications, where it helped restructure the sector and expand access to mobile communications. In addition, the IFC played a substantial role providing assistance to institutional and regulatory reforms in leasing and supported the supply response to these reforms by helping clients introduce new financial products in the market. These included: (i) pioneer- ing of the leasing industry in Uganda; (ii) introduction of mortgage programs; (iii) introduction of a trade finance program; and (iv) the piloting of a program targeting women’s access to finance. In these instances, the IFC’s additionality was in the provision of long-term finance and expert advice in busi- ness development which were critical in mitigating the risks of entering new untested sectors. Despite significant joint efforts with the World Bank, the desired results in the energy sector have yet to be seen. Limited impact was seen in SME access to finance and in developing housing finance, despite re- forms in these areas. Factors of success included: sustained involvement in priority sectors such as energy, telecommunications, and financial services; a government committed to policy and institutional reform; and a close and well-established relationship with clients. Alignment and Harmonization Although aid alignment and harmonization were not explicit aims of any strategy, they were impor- tant drivers for the support provided by the two banks. Alignment behind a common set of priorities was facilitated by the first PEAP in 1997, in which the government encouraged the development of sectorwide approach (SWAp) arrangements and the introduction of general budget support (which includes sector budget support, support notionally earmarked to the Poverty Action Fund, and sup- port not earmarked to any sector, such as Poverty Reduction Strategy credits and loans). Further progress on alignment occurred when a group of seven development partners, including the World Bank and the AfDB, completed the UJAS in 2005. That document included a common policy matrix corresponding to the results matrix in the PEAP. Although the PEAP and the UJAS have facilitated the adoption of common development priorities among development partners, the alignment process has led to a large number of sectoral working groups, which—at least in the view of some—is negating the anticipated reduction in transaction costs for the government and its partners. In addition, although the UJAS partnership has increased its membership to 11, is still small relative to the 42 development partners providing assistance to Uganda. So, even as the UJAS has been a major move in the right direction, it would benefit from clarification of the main principles underlying the partnership along the lines of the 2005 Paris Dec- laration of Donor Harmonization and Aid Effectiveness. The aid harmonization mechanism in Uganda is also making progress. With general budget support currently accounting for about half Uganda’s official development assistance, the use of country sys- tems for procurement and other processes is expanding. Progress notwithstanding, development partners’ mix of aid delivery mechanisms still varies widely. Some, such as Ireland and the United Kingdom, have moved predominantly toward budget support, and others, such as Germany, provided only a small portion of their assistance as budget support. The World Bank has markedly shifted emphasis toward budget support, but still provides almost half of its support through projects. The AfDB provided one round of budget support through the xxii CHAPTER 1 COUNTRY BACKGROUND Poverty Reduction Support Loan (in 2002). However, because of restrictions on procurement of items from non-AfDB member countries, the AfDB is unable to participate in SWAps and contin- ues to provide almost all of its support through projects. Overall, although efforts at alignment and harmonization have been substantial, both UJAS (on alignment) and the procedures around the general budget support instrument (on harmonization) need further refinement in order to attract increasing participation from all development partners. The World Bank and the AfDB, along with other multilateral institutions, can lead in this area. Recommendations Two sets of separate recommendations are provided, one for the World Bank and the other for the AfDB. The third recommendation applies to both banks. These all build on the recommendations provided in the earlier 2001 IEG and the 2004 OPEV Country Assistance Evaluations. The review notes that the recommendations in both documents were not fully implemented, especially those with respect to the World Bank taking a stronger stance on governance and the AfDB deepening it’s economic and sector work. Regarding the World Bank, program implementation was reasonably on target, commitments reflected the objectives of the program, analytic work was relatively cost effective, and portfolio performance was close to the World Bank average. From this, it may be concluded that resources were adequately directed to their intended use. World Bank assistance could continue to:  Support government efforts to develop an analytic framework to guide decisions on gover- nance reforms. Such a framework would help define the causal links between various interven- tions and expected outcomes related to improved governance.  With the help of development partners, encourage and support government efforts to develop medium-to-long-term master plans for infrastructure development in order to promote private sector participation, competition, and regulatory reform.  Encourage the government to coordinate ongoing monitoring and evaluation initiatives by its development partners in order to secure reliable monitoring and evaluation of its overall poverty reduction strategy. Regarding the AfDB, concern with program effectiveness could be raised given the long project effec- tiveness and gestation period, which could in turn reduce the timely outcome of project benefit. In this respect, the AfDB could:  Strengthen its presence by relocating sector specialists to the country in order to raise its profile and improve policy dialogue. This is particularly important in the areas where the AfDB plans to stay engaged. To avoid spreading staff too thinly, one option may be to dep- loy sector specialists to regional hubs.  Use limited resources more effectively by seeking deeper engagement in a limited set of areas.  Undertake regular (perhaps joint) economic and sector work and project self-evaluation to underpin strategy and project assistance. xxiii CHAPTER 1 COUNTRY BACKGROUND Regarding both the World Bank and the AfDB:  Seek to reinforce the effectiveness of general budget support as an instrument for minimizing transaction costs and facilitating the use of country systems. Channeling funds through the re- cipient country’s institutions helps to strengthen the governance structures and capacities and facilitates aid harmonization. This will require a greater focus on reaching agreement with oth- er UJAS members on a joint budget support mechanism and assisting the government in budget prioritization, and monitoring and evaluation. xxiv Management Action Record For the World Bank: IEG Recommendations Requiring a Response Management Response Support the government in developing an analytic framework to The government will be supported to strengthen its moni- guide decisions on governance reforms. Such a framework will toring and evaluation system to ensure that it: (a) identi- help define the causal links between various interventions and fies both institutional and management constraints that expected outcomes in terms of improved governance. affect achievement of outcomes at all levels, and: (b) can link the achievement of results to the budgeting process. There is ongoing work in a number of sectors to link the results-oriented management framework to budget moni- toring; this will help define the link between reforms in these sectors and improved service delivery, that is, im- proved governance in terms of accountability. The World Bank will assess opportunities to integrate cross-cutting governance indicators in developing a new Country Assistance Strategy for Uganda as well as ap- plying a governance lens at the sector and project levels. With the help of other development partners, encourage and The World Bank, in collaboration with other development support the government to develop medium-to-long-term mas- partners, is already working with the government on mas- ter plans for infrastructure development in order to promote pri- ter plans for infrastructure development as outlined be- vate sector participation, competition, and regulatory reform, as low: well as to enhance the process of timely institutional building.  A sector working group was put in place in 2006, to allow for more formal coordination between the stakeholders involved in the sector, so as to en- hance the efficiency and effectiveness of its devel- opment.  The World Bank is supporting the preparation of a Sector Investment Plan under the ongoing Power Sector Development operation.  The government, with the support of the World Bank (under the financing of Energy for Rural Transformation I), has prepared an Indicative Rural Electrification Master Plan which operationalizes the Rural Electrification Strategy and Plan (in- creased rural access to electricity).  The World Bank is helping Uganda to put in place a legal and regulatory framework for the implementa- tion of Public-Private Partnerships. In the transport sector a master plan has been put in place that calls for substantial private sector participation. In addition, endeavors are being made to create a Multi-Sector Regulatory Authority. The government, with support from the World Bank, has contributed to the East African Community Railways Master Plan focusing on extending and improving nation- xxv CHAPTER 1 COUNTRY BACKGROUND IEG Recommendations Requiring a Response Management Response al and regional railway coverage. Encourage the government to coordinate major ongoing moni- The World Bank, in collaboration with other development toring and evaluation (M&E) initiatives supported by its devel- partners, is closely following and supporting the govern- opment partners in order to secure reliable M&E of its overall ment in the process of improving and harmonizing the poverty reduction strategy, thereby helping to facilitate ade- existing M&E initiatives in Uganda as part of the devel- quate sequencing of policy reform. opment and finalization of the new Poverty Reduction Strategy Paper – the National Development Plan. It is expected that the process will contribute to the comple- tion and application of an M&E framework that will be much more closely linked with budgeting, policy reforms, and implementation, unlike many of the previous M&E systems in the Poverty Eradication Action Plans. Regarding concrete measures, the World Bank is actively participating in the recently revived National Monitoring and Evaluation Technical Working Group (NMETWG) under the Office of the Prime Minister. One of the tasks of the NMETWG is to design and manage support in the preparation of the M&E matrix and strategy for the 5-year National Development Plan. In addition, the World Bank has initiated a one-week training in monitoring and evaluation systems for the NMETWG in December 2008, thus strengthening the ca- pacity of members of this group to carry out its tasks. Seek to reinforce the effectiveness of general budget support The World Bank is working closely with the government as an instrument for minimizing transaction costs and facilitat- and other UJAS members in designing a Joint Budget ing the use of country systems, as channeling funds through Support Framework that is aligned to the budget cycle the recipient country’s institutions helps strengthen the gover- and sector processes. At the core of this is a multi-annual nance structures and capacities and facilitate aid harmoniza- Joint Assessment Framework focusing on efficiency in tion. This will require a greater focus on reaching agreement public spending and enhanced service delivery, in sup- with other Uganda Joint Assistance Strategy (UJAS) members port of the government’s own value-for-money agenda. on a joint budget support mechanism and assisting government The Joint Budget Support Framework is being imple- in budget prioritization, monitoring, and evaluation. mented in phases and will need to be closely aligned to the coming National Development Plan and the corres- ponding monitoring and evaluation structure, avoiding overlapping frameworks. The findings of the Country Economic Memorandum, together with recent and ongo- ing Public Expenditure Reviews, are feeding into all these processes. The coming Poverty Reduction Support Cre- dit 8, starting a new Poverty Reduction Support Credit series, will be designed within the structure of the Joint Budget Support Framework. xxvi CHAPTER 1 COUNTRY BACKGROUND For the African Development Bank: OPEV Recommendations Requiring a Response Management Response Strengthen AfDB’s presence in-country by relocating sector We agree. The number of professional staff in Uganda specialists in order to raise its profile and ensure improved pol- Country Office has grown from only five in 2005 to eight icy dialogue. This is particularly important in the areas where (including two internationally recruited and three locally the AfDB plans to stay engaged. To avoid spreading AfDB’s recruited) in 2008 (of whom three are infrastructure ex- staff too thinly, one option may be to deploy sector specialists perts). The relocation of internationally recruited sector to regional hubs. staff is planned as part of our ongoing decentralization. A social sector expert (based in Nairobi) but covering the region including Uganda has already been relocated. To use its limited resources more effectively, seek deeper en- We concur. During African Development Fund XI, greater gagement in a limited set of areas. selectivity is planned, with 69 percent of the indicative program focusing on Infrastructure (energy, sanitation, transport, and rural infrastructure). Undertake on a regular basis (perhaps jointly) sufficient eco- We agree. This is consistent with the High Level Panel nomic and sector work and project-level self-evaluation, to un- Report (2007) that recognized the need for an enhanced derpin its strategy and project assistance. role in knowledge and analytical work. The Uganda Oil Seminar (July 2008) emphasizes the Bank’s timely re- sponse to the government’s request for knowledge shar- ing and dissemination. Planned analytical work on re- gional integration in 2009-10 is also in line with this recommendation. Seek to reinforce the effectiveness of general budget support AfDB remains committed to partnering with other UJAS as an instrument for minimizing transaction costs and facilitat- members to minimize transaction costs. At the request of ing the use of country systems, as channeling funds through the government, infrastructure remains the priority focus the recipient country’s institutions helps strengthen the gover- for the Bank and general budget support is thus not envi- nance structures and capacities and facilitate aid harmoniza- saged during African Development Fund XI (2008-10). tion. This will require a greater focus on reaching agreement with other UJAS members on a joint budget support mechan- ism and assisting government in budget prioritization, monitor- ing, and evaluation. xxvii CHAIRPERSON’S SUMMARY: COMMITTEE ON DEVELOPMENT EFFECTIVENESS Informal Subcommittee’s Report: Uganda Country Assistance Evaluation, 2001-2007 (Meeting of May 20, 2009) On May 20, 2009 the Informal Subcommittee of the Committee on Development Effective- ness (CODE) considered the Uganda Country Assistance Evaluation (CAE) prepared by the Independent Evaluation Group (IEG). Summary of the Uganda CAE. A joint team from the World Bank Group’s IEG and the African Development Bank’s (AfDB) Operations Evaluation Department (OPEV) prepared the CAE. The overall outcome of the World Bank Group’s (hereinafter referred to as the Bank) program was rated moderately satisfactory. IEG recommended that the Bank contin- ue to support the Government to: (i) develop an analytic framework to guide decisions on governance reform; (ii) develop medium to long-term master plans for infrastructure devel- opment with the aid of other development partners; and (iii) coordinate ongoing monitoring and evaluation (M&E) initiatives by development partners. In addition, IEG urged the Bank, together with other development partners, to reinforce the effectiveness of general budget support. Management’s Comments. Management noted the relevance of the CAE findings for the next Uganda Country Assistance Strategy which is expected to go to the Board in December 2009. There were no major areas of disagreement, and Management elaborated on its ongo- ing and planned work responding to each area of IEG’s recommendations. Government’s Comments. The Representative of the Constituency emphasized the positive partnership between the Ugandan authorities and the Bank, AfDB, and other development partners. She indicated that support in the following areas would be welcomed: (i) more analytical work in specific sectors and tailored to the country context; and (ii) focus on infra- structure. She also encouraged the Bank, together with other development partners, to con- tinue efforts towards greater alignment and harmonization. The Bank’s contributions to Uganda’s development goals were appreciated, and the importance of strong client orienta- tion and selectivity in future assistance was emphasized. Main Conclusions. The Informal Subcommitee welcomed the CAE and broadly supported the findings and conclusions. Members positively noted the collaboration with AfDB’s Op- erations Evaluation Department and the CAE’s timeliness and relevance for preparing the next Country Assistance Strategy. Management’s candid response, including reflections on xxix CHAPTER 1 COUNTRY BACKGROUND how to strengthen Bank support, was appreciated. Although commending the achieve- ments in Uganda, some members noted the country’s high aid dependency, and expressed some concerns about external debt sustainability. The main comments and questions re- lated to the donor harmonization and coordination, use of budget support, importance of infrastructure development, and support to governance and health. Interest was also ex- pressed in the International Finance Corporation’s (IFC) operations. The following issues were raised: Donor Support and Coordination. The CAE insights on strengthening donor partnerships including the Uganda Joint Assistance Strategy (UJAS), was welcomed. A few members sought additional information on plans to strengthen harmonization and alignment among donors participating in the UJAS with regards to their overall support, predictable aid flow, and M&E. Management described the ongoing consultations to prepare the next Country Assis- tance Strategy, as well as to ensure appropriate framework to monitor its implementation. Some members remarked on Uganda’s high aid dependency, and raised some concerns about the country’s external debt sustainability including the possible impact of the infrastructure in- vestment (for example, the Bujagali Hydro Power Project). Management believes that Uganda continues to merit substantial concessional resource flows for the medium term, with the Internation- al Development Association (IDA) amount determined by the performance-based allocation (PBA). It noted that the Bank, together with the International Monetary Fund (IMF) just completed the debt sustainability analysis, and Uganda is doing well as a post-Multilateral Debt Relief Initiative (MDRI) country. Management reassured the members that the Bujagali project is not adding very much to Uganda’s public sector debt since most of the financing is private. Budget Support. A few members commented on the need for appropriate balance between budget support and investment lending and also cautioned on overemphasizing budget support as a means for aid harmonization. A speaker raised concerns about its use in the absence of more robust fiduciary safeguards and a member considered budget support as a fundamental means of support to a country, ensuring that such support is provided judi- ciously. The speaker emphasized the need to focus on how countries do rather than on ab- solute levels of budget support. Management considered the current level of budget support as justified by Uganda’s performance under the PBA in terms of economic efficiency and enabling alignment to the country’s development objectives. It also acknowledged that perhaps the Bank’s as- sistance may have focused too much on budget support, and the balance is being reconsidered. Under the new Country Assistance Strategy, Management expected that 30 to 35 percent of annual gross IDA flows to Uganda would be to budget support. Management elaborated on the joint budget sup- port framework, which focuses on fiduciary procedures, and is linked to progress in public financial management. Management concurred on the need to improve domestic resource mobilization, as emphasized by a few members who also stressed appropriate division of labor between the Bank and AfDB in the area of tax policy and administration. In response to a question about tax-to-gross domestic product (GDP) ratio in Uganda, Management informed that this was currently less than 15 percent and the Bank was providing support to help Uganda improve this ratio. Sectoral and Thematic Areas. A few speakers noted the importance of addressing the bind- ing constraints to development, with a member underlining the need to focus on infrastruc- ture development. Management said the next Country Assistance Strategy is moving toward pro- viding additional support to infrastructure. Although welcoming public-private partnerships xxx CHAPTER 1 COUNTRY BACKGROUND and involvement of the private sector in infrastructure development, it was suggested that more public sector participation may be merited. More information was sought regarding support to governance, and a note of caution was expressed regarding inclusion of “percep- tion” in evaluating the outcomes of the Bank’s anti-corruption initiatives. Management noted that Uganda’s performance on public financial management is relatively positive within the region, and there have been significant achievements in fighting corruption. IEG clarified that perceptions of corruption is considered as they drive behaviors of individuals vis-à-vis the Government, including the private investors. A member noted the importance of underpinning Bank support with analytical work. A few questions were raised about weaker health outcomes and lessons for AfDB from the Bank’s work on decentralization. IFC Contributions. Some speakers expressed interest in the findings related to IFC’s opera- tions. Responding to a question about the CAE’s reference to IFC’s cumbersome procedure and whether this referred to its environment and social safeguards, IFC Management said that this was a general issue raised by private sector clients, which is being addressed through decentrali- zation efforts and reviewed on internal business processes. Important lessons emerging from the CAE included how to promote private investment in infrastructure and improve effectiveness in agribusiness, and described its ongoing efforts in these areas. On the question of its plans for an IFC Country Manager, IFC Management said Uganda is not yet on the priority list of countries to deploy one. General Comments on the Evaluation. A few members asked about IEG’s experience and its plans to carry out joint evaluations, to which IEG said that it is learning how to effectively evaluate with its counterparts in other institutions, given the challenges and constraints such as their limited resources. The upcoming CAE for Bangladesh is based on a common evaluation framework. A member wondered about the possibility of moving toward risk-weighted evaluation, to draw out more clearly the value-added of the Bank given the risks and difficulties asso- ciated with each sector. Regarding any lessons that may be applicable regionally, IEG noted that it may be able to draw lessons in certain cases but for CAEs, it tried to ensure specific recom- mendations applicable to the country. Giovanni Majnoni, Chairperson xxxi Chapter 1 Country Background Since independence in 1962, Uganda’s economy has been subjected to shocks, some of which derive from conflict and some from misrule. With a population of 29.9 million (2006 estimate) and a per capita gross national income of $300 (Atlas method), Uganda is consi- dered one of the world’s poorest countries, ranked 154 out of 177 countries by the United Nations Human Development Index (2007). However, the country has economic possibili- ties in the form of substantial natural resources, including fertile soil, high but sometimes irregular rainfall, sizable deposits of copper and cobalt, and largely untapped reserves of crude oil and natural gas. Agriculture is the most important sector of the economy, employ- ing over 80 percent of the workforce, with coffee accounting for the bulk of export revenues. Country Context Economic Environment. Although the focus of this evaluation is the period 2001-07, eco- nomic and political developments since 1986 influenced developments during the period reviewed. Uganda emerged from civil war in 1986 with an economy shattered by misrule and conflict: gross domestic product (GDP) was more than 20 percent below its 1970 peak, inflation was rampant, the official exchange rate was grossly overvalued, exports (primarily coffee) had shrunk drastically, budgetary discipline had seriously declined, and much of the economic infrastructure had been destroyed.1 The new government’s post-conflict recovery program was directed at rehabilitation and sta- bilization of the economy. Macroeconomic performance during the 15-year period 1986-2000 was noteworthy. Per capita GDP growth exceeded the average for sub-Saharan Africa, and international reserves were rebuilt.2 Sound macroeconomic policies contained debt and stabi- lized prices—important factors in Uganda’s growth and poverty reduction record. Develop- ment partners consistently funded a significant part of public spending: aid flows during the period averaged 11 percent of GDP and 50 percent of public expenditure. A flexible exchange rate regime allowed Uganda to weather fluctuations in coffee prices and aid inflows and re- tain international competitiveness. Most markets were liberalized, and the banking system and some state-owned enterprises were privatized. Poverty rates came down (the headcount ratio for poverty fell from 56 percent in 1992 to 34 percent in 2000), and social spending was increased. More recently (2001-06), per capita growth and poverty reduction have lost momentum. Per capita GDP growth during 2001-06 averaged 2.2 percent per annum, compared to average growth rates of 3.3 percent during the 1990s. The headcount ratio for poverty rose to 38 percent of the population in 2003, but fell back to 31 percent in 2005/06 (Annex A and World Bank 2006). Apart from the moderation in economic growth, poverty trends were adversely affected by declining terms of trade and widening income inequalities. The fall in per capita growth could be explained by declining contribution from the positive post- conflict “catching-up” effect (that is, by using existing capacity), relatively low productivity 1 CHAPTER 1 COUNTRY BACKGROUND growth, very high population growth (now over 3 percent, among the highest in the world), and persistent conflict in the northern part of the country that drained budget resources and limited agricultural production. Political Environment. Since assuming power, President Yoweri Museveni and his govern- ment have promoted press freedom and initiated political reforms to complement their eco- nomic reform program. But they still have to deal with the Lord’s Resistance Army (LRA), which has controlled parts of the north and east since 1986 and sought to overthrow the gov- ernment.3 LRA violence at one time displaced up to 1.7 million people, creating a humanita- rian catastrophe, particularly when the displaced were forced into camps for protection. The Uganda Peoples Defense Force (UPDF) launched Operation Iron Fist against LRA rebels in northern Uganda in 2002 and conducted operations against LRA sanctuaries in southern Su- dan with the permission of the Sudanese government. Recent peace talks have defused those threats, and Uganda appears focused on seeing the talks to conclusion. In a 1986 measure designed to reduce sectarian violence, political parties were restricted in their activities. A constitutional referendum on July 28, 2005, voted to restore unrestricted multiparty politics. The referendum was followed by a presidential election in February 2006, which was won by Museveni’s National Resistance Movement (NRM). Although the political environment is now characterized by greater representation and media freedom, observers continue to have concerns about Uganda’s political process. Conclusions from Previous Evaluations The Independent Evaluation Group (IEG) has completed two evaluations on World Bank assistance to Uganda: a Country Assistance Evaluation (IEG-CAE) covering the period for fiscal years 1987-99, and a Country Assistance Strategy Completion Report (CASCR) Review for fiscal years 2001-05. The Operations Evaluation Department (OPEV) of the African Development Bank (AfDB) completed three reviews during 2002-06: a Country Assistance Evaluation covering 1986- 2001 (OPEV-CAE) in 2004; a review of AfDB Strategy in Uganda in 2004; and a review of AfDB’s role in the Uganda Joint Assistance Strategy (UJAS) process in 2006. The recom- mendations of the previous evaluations (summarized in Box 1) highlight the main issues for World Bank and AfDB assistance for the period covered by the present evaluation. Study Approach and Report Structure Approach. This evaluation is a joint product of the IEG and OPEV. An IEG-OPEV team vi- sited Uganda in January 2008 and subsequently prepared the report using terms of refer- ence set out in an Approach Paper endorsed on a no-objection basis by the relevant commit- tees of the two institutions’ Board of Executive Directors. The decision to undertake a joint evaluation was motivated by the two institutions’ shift to using a common strategic frame- work, the UJAS, to guide the formulation and delivery of their programs. The use of a common strategic framework means, at least in principle, that joint evaluation is more cost- effective (notably in terms of the transaction cost for the host country government) than the 2 CHAPTER 1 COUNTRY BACKGROUND equivalent separate evaluations, since at least some aspects of the evaluation can be done together. Box 1. Recommendations of Previous Country Assistance Evaluations World Bank (IEG) African Development Bank (OPEV) General:  Deepen economic and sector work and make Country Strategy Papers (CSPs) more stra-  Help the government strengthen its aid man- tegically oriented through the adoption and agement capacity. use of results-based Country Assistance IDA’s efficiency: Strategies.  Handle procurement and disbursement more  The government needs to address some of flexibly. the systemic constraints facing the economy,  Define IDA’s role within a more comprehen- including: its narrow export base, low tax sive assistance strategy for rural develop- revenue, weak institutional capacity, the po- ment. verty situation, low productivity in agricul- Institutional development: ture, private sector development, the HIV/AIDS pandemic, and the conflict in the  Encourage the government’s coordination of north. major reforms.  Take stock of technical assistance and train- ing programs and their impact on capacity building.  Take a stronger stance on governance.  Promote monitoring and evaluation for transparency, accountability, and a culture of results. Private sector development:  Seek the help of partners in encouraging the government to move ahead with infrastruc- ture investments, private sector participation and competition, and regulatory reform. Sources: World Bank (2001) and AfDB (2004) Notes: AfDB= African Development Bank; IDA= International Development Association; HIV/AIDS= human immunodeficiency/virus autoimmune deficiency syndrome; IEG= Independent Evaluation Group; OPEV= Op- erations Evaluation Department of AfDB. This joint CAE is best seen as an exploratory move toward pooling certain aspects of evalua- tion. However, it was only toward the end of the period reviewed that the use of a joint strategic framework was activated among development partners. Moreover, the evaluation covers the programs of only 2 of the 12 partners of the UJAS.4 The second, more significant, point is that despite their use of a joint strategic framework, the partners continue to deliver support to Uganda through separate instruments, rather than through joint instruments us- ing comingled funds. Only when the latter case applies will joint evaluation of partners’ support become truly meaningful—in fact, it becomes the only meaningful way to conduct evaluation, since attribution to individual partners’ support becomes meaningless. 3 CHAPTER 1 COUNTRY BACKGROUND For these reasons, this evaluation is a hybrid between one joint and two separate evalua- tions. In fact, to some degree, several parts of the CAE are parallel but separate evaluations of the two programs. These parts of the CAE, which provide ratings of the outcome of each institution’s program by strategic objective, have major limitations. Given the underlying concept of evaluation relative to objectives, the CAE rates the outcome of each institution’s program against the objectives that the institution had set itself. This CAE makes no syste- matic attempt to judge the degree of ambition underlying the institutions’ program goals. However, this should not be interpreted to mean that IEG and OPEV judge the two institu- tions to have had equal “stretch” goals relative to their respective, and very different, ana- lytical and financial capacities. As a result, the program outcome ratings for the two institu- tions cannot be meaningfully compared with one another or used to imply that one institution did “better” than the other. In addition to the assessment of the World Bank and AfDB support, IEG has also evaluated the outcomes of International Finance Corporation (IFC) investments and advisory services, which were covered by the same strategic documents as World Bank support. Report Outline. Chapter 2 of the report provides a broad overview of World Bank and AfDB strategies during the review period. The subsequent three chapters cover the three main pillars of the banks’ assistance programs: good governance (Chapter 3), growth (Chap- ter 4), and human development (Chapter 5). Chapter 6 assesses the IFC contribution to the development of Uganda’s private sector. Chapter 7 reviews the role of the World Bank and AfDB (parallel and jointly) in aid harmonization and development partnership in Uganda. The final chapter summarizes the outcome of the assessments, identifies lessons that apply collectively and individually to the World Bank and AfDB, and provides recommendations for the two institutions. 4 Chapter 2 Strategy and Assistance Program This chapter examines the objectives and programs of the World Bank and the AfDB in their assistance to Uganda during 2001-07. Because of differences in programming periods, the review period for World Bank assistance is fiscal years 2001-07, and 2002-07 for AfDB assis- tance.1 The banks’ assistance programs during these periods were guided by the respective country assistance strategies up to 2005, and then from 2006-07 by the Uganda Joint Assis- tance Strategy (UJAS).2 The World Bank’s Country Assistance Strategy (CAS) for fiscal years 2001-03 was de facto extended to fiscal year 2005. Similarly, the AfDB’s Country Strat- egy Paper (CSP) for 2002-04 was de facto extended to 2005. The fiscal year 2001-03 World Bank CAS and the 2002-04 AfDB CSP are discussed separately, before moving on to the UJAS. Objectives of the Assistance Program The fiscal year 2001 World Bank Country Assistance Strategy. The overarching objective of the 2001 CAS was supporting Uganda’s economic transformation and poverty reduction strategy articulated in the government’s 2000 Poverty Eradication Action Plan (PEAP), its poverty reduction strategy paper.3 The pillars in the CAS, which are aligned with the PEAP, support government actions to:  Increase the ability of the poor to raise their income by focusing on agricultural per- formance, natural resource management, rural roads, rural energy, and reduced re- gional disparity in poverty.  Improve the quality of life for the poor by strengthening health care services, prima- ry education, and water supply and sanitation.  Create a framework for structural transformation and economic growth.  Ensure good governance and security by supporting decentralization and public ex- penditures that are transparent, efficient, and poverty-focused. The 2002 AfDB Country Strategy Paper. The overall objective of the 2002 AfDB CSP was to promote economic growth and reduce poverty in line with the PEAP goals by focusing, like the World Bank, on four thematic areas:  Agriculture and rural development, aimed at increasing the productivity of small farmers by supporting the government’s Plan for the Modernization of Agriculture (PMA), which was designed to transform subsistence agriculture into commercial agriculture. 5 CHAPTER 2 STRATEGY AND ASSISTANCE PROGRAM  Physical infrastructure development, aimed at facilitating growth by addressing in- frastructure constraints in water supply and sanitation, transport networks, and the power sector.  Human and institutional capacity, aimed at providing assistance to improve human capital and technological development, with an emphasis on increasing skills at the local government level in the context of decentralized responsibilities for service delivery.  Private sector development, aimed at supporting the government’s implementation of the Medium-Term Competitive Strategy, with the objective of enhancing the poli- cy and regulatory environment. In addition, the AfDB Group’s Private Sector De- partment aimed at supplementing the effort by helping improve access of small and medium enterprises (SMEs) to commercial bank credit. The 2005 Uganda Joint Assistance Strategy (UJAS). Increased donor coordination, most notably in the alignment behind a common set of priorities, culminated in the UJAS, which was brought to the Boards of the two banks in December 2005. The UJAS aligns the partners’ support with the government’s 2004 PEAP, which argues for a shift from recovery to sustain- able growth and structural transformation, and presents government policies to accelerate poverty reduction. It has five pillars: (i) economic management, with a focus on macroeco- nomic stability consistent with rapid private sector-led growth; (ii) enhancement of produc- tion, competitiveness, and incomes; (iii) security, conflict resolution, and disaster manage- ment; (iv) good governance; and (v) human development. Within the context of the UJAS, the World Bank program4 was based on the five pillars with the same results matrix, except for a handful of objectives and targets that are left out be- cause they are not considered to be within the World Bank’s mandate (for example, human rights).5 The AfDB UJAS strategy is restricted to the first two years of the UJAS period (2005-07) and focuses on only two of the five UJAS pillars: enhancing production, competi- tiveness, and incomes (Pillar 2) and human development (Pillar 5). The selection of pillars was based on AfDB’s perception of their importance for pro-poor growth and poverty re- duction, and was guided by AfDB’s assessment of its comparative advantage in Uganda. Annex C outlines the details of the three strategy documents for the two banks along with the associated targets proposed for monitoring progress in achieving program outcomes. Translating Objectives into Programs Planned Level and Composition of World Bank Commitment. Although the efficiency of World Bank support cannot be assessed with available data,6 discussion of the lending pro- gram and portfolio management provides insights into the appropriateness of the use of re- sources. During the period reviewed (fiscal years 2001-07), the World Bank committed $2.1 billion in 23 operations, and $44.5 million in 3 supplemental operations. The 2001 CAS envi- saged 15 operations for $1.1 billion, and delivered 14 operations worth $915.7 million. The two-year extension of the CAS resulted in 5 projects with a total commitment of $502.6 mil- lion. Under the UJAS the World Bank proposed 19 operations totaling $1 billion. For 2006- 07, 11 operations worth $500 million were planned, with actual commitments of $660 mil- lion for 5 operations. Except for initial delays, the program was on target. 6 CHAPTER 2 STRATEGY AND ASSISTANCE PROGRAM World Bank Commitment by Sector. The largest proportion of World Bank resources (about 27.3 percent) was allocated to public sector reform, specifically public administration, law, and justice. This includes resources channeled through the Poverty Reduction Strategy Credits (PRSCs) (an estimated 34.4 percent of PRSC resources supported public sector re- forms, although PRSC resources are not earmarked).7 The relatively large resource flow to support public sector reforms is consistent with the World Bank’s strong focus on streng- thening institutions and capacity building and the relative emphasis on governance. Energy and mining had the second largest allocation (19 percent), which was entirely channeled through investment projects. This supported the commitment of the CAS to help reduce constraints to growth. Finally, consistent with the human development focus of the World Bank strategy, health and other social services also received a substantial share of commit- ments (15 percent of total lending and 20.8 percent of the PRSC notional resources). A sub- stantial part of the PRSC’s notional resources (17.3 percent) supported education alone (ta- ble 1). Table 1: World Bank Commitment by Sectors, Fiscal Years 2001–07 (in US$ million) All lending All PRSC 1-6 Fiscal Years lending Fiscal Years PRSC 1-6 Sector 2001–07 % of total 2001–07a % of total Agriculture, fishing and forestry 146.8 7.0 75.0 8.7 Public administration, law, and justice 573.3 27.3 296.2 34.4 Information and communications 5.4 0.3 0.0 0.0 Education 220.1 10.5 149.0 17.3 Finance 15.3 0.7 0.0 0.0 Health and other social services 315.7 15.0 179.0 20.8 Industry and trade 35.1 1.7 0.0 0.0 Energy and mining 398.8 19.0 0.0 0.0 Transportation 202.2 9.6 12.0 1.4 Water, sanitation, and flood protection 189.9 9.0 149.0 17.3 Total commitments 2,102.8 100.0 860.0 100.0 a. These data are taken from sectoral allocations for each loan as provided by the World Bank internal database. Although no earmarking of funds takes place in PRSCs, task team leaders make notional allocations for up to five sectors. The allocation for PRSCs should therefore be seen as an approximation of the likely flow to sectors. Notes: PRSC= Poverty Reduction Support Credit. World Bank’s Portfolio Performance. Another insight into the appropriate use of World Bank resources comes from how the portfolio performed during the implementation process. IEG ratings of Uganda’s closed projects were better than the average for the Africa Region, but below the Bank-wide average. During fiscal years 2001-07, IEG reviewed 27 closed IDA- financed projects in Uganda, representing $1.66 billion in commitments (table 2). The out- come was rated satisfactory for 71.4 percent of the closed projects (by commitments), below the Bank-wide average of 81.7 percent and slightly above the 69.0 percent average of the Afri- ca Region in the World Bank. Overall, the resources provided were directed to the intended uses, given that program implementation was reasonably on target, commitments reflected 7 CHAPTER 2 STRATEGY AND ASSISTANCE PROGRAM the objectives of the program, and portfolio performance was close to the World Bank aver- age. Table 2: World Bank Summary of Evaluation Findings Total evaluated ($M) a Total evaluated (No.) a Outcome % Outcome % satisfactory ($) b satisfactory (No.) b Uganda 1664 27 71.4 76.9 Africa 18380 450 69.0 66.1 Region World 127818 1881 81.7 77.1 Bank-wide Source: World Bank internal database. Notes: a. For projects that exited in fiscal years 2001-07. b. Ratings are weighted by commitments. Nature of World Bank Nonlending Services. The nonlending services provided by the two banks include: technical assistance (not financed through loan or credit), economic and sec- tor work, and policy dialogue (project supervision and diagnostic missions, consultative group meetings, conferences, and workshops). Together, they are referred to as analytic and advisory activities. The bulk of the World Bank’s economic and sector work, consistent with the Bank’s empha- sis on governance, focused on the strengthening of public expenditure and financial man- agement systems, most notably through annual Public Expenditure Reviews (PERs). These reviews, carried out in the context of Uganda’s Medium-Term Expenditure Framework (MTEF) exercise, complemented the PRSCs as they enhanced transparency, monitoring, and donor harmonization, and helped increase participation by the Ministry of Finance, Plan- ning, and Economic Development and other stakeholders in the dialogue on public financial management. Another notable economic and sector work product was the 2004 Country In- tegrated Fiduciary Assessment that consisted of a consolidating report, a Public Expenditure Review, a Country Procurement Assessment Report, and a Local Government Integrated Fiduciary Assessment. A 2004 PRSC stocktaking study was undertaken with a view to drawing lessons from the first three PRSCs, and to help formulate the fourth PRSC. Although adequate, the focus of the World Bank’s analytic and advisory activities program could have benefited from some adjustment to enhance its timeliness. For instance, there were no free-standing economic and sector work studies on corruption—although there was partial treatment of the theme in the PERs and Country Procurement Assessment Report (and a num- ber of related workshops). This deficiency became apparent when a decision to include prior actions on asset verification in the PRSCs subsequently proved difficult to verify as it was not adequately informed by targeted diagnostic work. Growth issues also needed timely analytic work. Following the 1996 Country Economic Memorandum, it took until 2007 before the World Bank delivered another Country Economic Memorandum with in-depth coverage of the growth theme. Although probably seminal, the 2007 Country Economic Memorandum may not be able to fully make up for the void in the dialogue on growth issues prior to the 2005 PEAP, on which the UJAS rests. Aside from the failure to make up the void, starting a major reform without proper analytical background is often costly to discontinue when found wanting. 8 CHAPTER 2 STRATEGY AND ASSISTANCE PROGRAM Overall, the World Bank’s analytic and advisory activities, especially the economic and sec- tor work, was of good quality and was undertaken according to plan in the CAS—although there were some slippages toward the end of the evaluation period (see Annex A, table 6 for an overview of economic and sector work). This conclusion is also supported by a Bank study of the quality of analytic and advisory activities (seebox 2). Box 2. A Bank Study of the 2005 Assessment of the Uganda Analytic and Advisory Activities A Bank study reviewed eight analytic and advisory activities tasks completed during fiscal years 2001-04. It rated four highly satisfactory, two satisfactory, and two marginally satisfactory. Overall, the study found the analytic and advisory activities satisfactory, based on highly satis- factory ratings for strategic relevance (reflecting the close linking of the CAS and analytic and advisory activities program with the PEAP) and coherence and integration (based on the inte- grating processes involving the government, World Bank Group, and other partners, and the link into the World Bank’s resource transfers through the PRSCs and sectoral operations), and satisfactory ratings for the other dimensions. The study noted that the substantive government involvement in formulating the conclusions and recommendations of the PERs posed a trade-off between ensuring implementation of rec- ommendations, and having an arms-length World Bank view in what is also meant to serve as due-diligence/fiduciary economic and sector work. Finally, noting that a Country Economic Memorandum was underway, the study identified four areas of priority: resource mobilization and aid dependence, labor markets and employment, agriculture and rural development, and regional comparative experience. Source: World Bank internal database. Finally, the cost of analytic and advisory activities relative to the total World Bank commitment for Uganda compares favorably with that of other countries in the region (table 3). The ratio is also lower than those for supervision and lending activities. In addition, the average relative costs of the analytic and advisory activities program (and its components) for Uganda during fiscal years 2001-07 are below those of the whole World Bank and the Africa Region during the period reviewed. The reason for these lower relative cost figures is not clear, but two hypo- theses could be advanced. First, Uganda could be benefiting from economies of scale of a larger commitment relative to the minimum needed to sustain an economic and sector work opera- tion. Second, based on a Bank study (box 2), the partnership could be providing the World Bank with substantial savings in implementing its analytic and advisory activities program. 9 CHAPTER 2 STRATEGY AND ASSISTANCE PROGRAM Table 3: World Bank –Costs of Operations and Analytic and Advisory activities, Fiscal years 2001–07 (as percentage of total commitment) Analytic and Analytic and Analytic and Advisory Advisory Activities Advisory Activities (Technical Total Activities (Economic and Assistance, Operations Supervision Lending (Total) Sector Work) Aid Coordination) Other Uganda 2.22 0.92 0.68 0.47 0.41 0.06 0.15 Kenya 3.44 0.97 1.13 0.98 0.66 0.32 0.37 Ethiopia 1.62 0.62 0.51 0.37 0.34 0.03 0.12 Malawi 5.03 1.92 1.51 1.28 0.77 0.51 0.32 Tanzania 1.97 0.75 0.66 0.40 0.37 0.04 0.16 Burundi 3.42 1.05 1.14 0.99 0.58 0.41 0.24 Africa 5.01 1.20 1.38 1.59 0.70 0.89 0.84 Region Bank-wide 3.58 0.97 0.89 1.09 0.62 0.47 0.64 Source: World Bank internal database. Note: Costs include both Bank budget and trust funds. Planned Level and Composition of AfDB Commitment. The assessment of the use of AfDB resources in Uganda follows the same framework as that of the World Bank. Howev- er, it is limited by the lack of data on the cost of delivering the AfDB’s assistance. Uganda is an African Development Fund (ADF)-eligible country in the AfDB. During the period re- viewed (2002-07), the AfDB (including its multinational and private sector windows) com- mitted UA492 million, $732 million equivalent, in 19 operations (Annex table 4a Part 1). The CSP covering 2002-04 planned, under the base case, for UA118 million. This was in- creased to UA191.8 million—with the total amount committed to nine operations, including budget support. Three operations (two through the multinational window and one through the private sector window) for the amount of UA13.8 million were also committed. For the period 2005-07 of the UJAS, seven projects, one earmarked for budget support for rural water supply and sanitation, and one for a general budget support operation were en- visaged, totaling UA264.9 million (of which UA91.6 million were grants). Actual commit- ments for that period were UA220.2 million (UA62.3 million of which were grants) for seven projects, with the rest for infrastructure following its reallocation from the planned budget support operation. In addition, the AfDB’s private sector facility approved the Bujagali Hy- dro Power Project (UA72.17 million). AfDB’s total commitment during the period was satis- factory. However, it experienced considerable delays in project effectiveness, an issue that affected the timeliness and development impact of the AfDB’s contribution. During this period, the AfDB provided general budget support only once through the Po- verty Reduction Support Loan (PRSL), which was delivered in two tranches. Apart from this support, AfDB assistance was exclusively through investment projects (figure 1). The agriculture and rural development sector accounted for the bulk of assistance (26.0 percent), followed by transport (24.3 percent), power (17.6 percent), water and sanitation (11.8 per- cent), multisector (9.9 percent), and social (education and health; 8.1 percent). Infrastructure (transport and power sectors) dominated AfDB’s commitments and, along with heavy sup- port for agriculture, emphasized the focus on growth and income generation. AfDB’s con- cern in human development was mainly with service delivery, followed by a minimal role 10 CHAPTER 2 STRATEGY AND ASSISTANCE PROGRAM for governance issues (through reforms of public finance pursued through, for example, the Institutional Support Project for Good Governance). Figure 1: AfDB Commitment by Sectors, 2002-07 (in UA million) Industry S ocial Multi-S ector W ater & S anitation Power Transport Agriculture 0 20 40 60 80 100 120 140 Commitments (UA million) Source: AfDB project database. AfDB’s Portfolio Performance. Only two of the committed projects in the CSP 2002-04 were closed, only one of which has been rated. However, 11 of the delivered projects in 2002-07(valued at UA247 million), including those committed during the preceding period, have been rated. More than two-thirds of the rated projects (by commitment and number) had satisfactory outcomes (table 4). This project performance was relatively better than av- erages for the Eastern Region, ADF-wide, and AfDB-wide outcomes. Although the portfolio performance during the period was satisfactory on average, it does not reflect the combined long project effectiveness and gestation period, which reduces the timely outcome of project benefits. In addition, the program did not achieve the planned commitment anticipated in the strategy documents. Table 4: AfDB—Summary of Evaluation Findings Total evaluated Total evaluated (No.)a Outcome % Outcome % Satisfactory (UA Millions)a Satisfactory (UA)b (No.)b Uganda 247.0 11 72 73 Eastern Region 732.6 33 55 61 ADF-wide 2366.3 136 49 50 AfDB-wide 4625.9 171 75 61 Notes: a. For projects that exited in 2001-06. b. Ratings are weighted by commitments. Source: OPEV Database, May 2008. Notes: AfDB=African Development Bank; OPEV= Operations Evaluation Department of the African Development Bank; UA= Unit of Ac- count (for the African Development Fund). Nature of AfDB Nonlending Services. Except for analytic work performed for project prepa- ration and to evaluate the performance of past operations, the AfDB conducted very little eco- nomic and sector work in Uganda. Instead, AfDB relied mostly on analytical work provided by other development partners, especially the World Bank and the International Monetary 11 CHAPTER 2 STRATEGY AND ASSISTANCE PROGRAM Fund (IMF). AfDB delivered a handful of economic and sector work products, including the 2005 Multi-Sector Country Gender Profile that reviews the status and challenges to main- stream gender issues in AfDB interventions at the country level, and a 2005 report with the In- ternational Labor Organization on Support for Growth-Oriented Women Entrepreneurs in Uganda. Looking forward, the AfDB-specific UJAS includes several economic and sector work proposals for fiscal year2005-07, including: a Country Governance Profile; a study on the prospects for diversification of the agricultural sector; and a study to provide directions for future projects on the basis of the 2005 gender profile. Overall Assessment During the period reviewed the two banks aligned their strategies to the PEAP and pro- vided assistance under common pillars, thus complementing each other. Under UJAS, the selectivity of the banks reflected their ongoing interventions. Because of similarities in the strategies of the two banks during the period, the assessment of their contribution would be best summarized under the combined objectives of governance, growth, and human devel- opment. The evaluation distinguishes between the program outcomes in the pre-UJAS pe- riod (up to fiscal year 2006) and assessment of the startup and implementation issues of the UJAS period (fiscal year2006-07). Finally, in assessing the use of resources by the banks, it may be concluded that with respect to the World Bank’s program of intervention, it has not been possible to conduct a rate of re- turn analysis on the complex set of interventions. Given that the program implementation was reasonably on target, commitments reflected the objectives of the program, the analytic and advisory activities were relatively cost effective and largely complemented the lending program, and portfolio performance was close to the World Bank average, it may be con- cluded that the resources were adequately directed to their intended use. With respect to the AfDB, concern with program effectiveness could be raised given the long project effectiveness and gestation periods, which could reduce the timely outcome of project benefits. 12 Chapter 3 Promoting Good Governance Key Governance Challenges Governance and security concerns have dominated much of Uganda’s development efforts, hence it is a key theme in the PEAP. Three aspects of governance (political, economic, and corporate) can be highlighted. From the political governance perspective, Uganda has expe- rienced conflicts within its borders and with all its neighbors at different times and for dif- ferent reasons. The country has encountered major challenges in the management of such conflicts. In addition, upholding the separation of power of the state at the same time as promoting and protecting the rights of individuals (including women, children, vulnerable groups, and disabled persons) remains a challenge. In addition, acute and inadequate staff- ing and funding of key institutions has compromised the quality of services. Political go- vernance therefore is very high on the development agenda.1 Similarly, the accountability, effectiveness, and efficiency of the public sector in Uganda were undermined by three decades of weak internal governance. Attracting and retaining staff is difficult and challenges abound in fighting corruption, including inadequate funding for anti-corruption institutions. Economic governance, requiring sound public financial management, transparent and predictable economic policies, and an effective regulatory framework for the promotion of economic activities, has thus been high on the govern- ment’s agenda since the mid-1980s. The government’s approach has also internalized con- cerns about corporate governance, which has become increasingly important given the on- going effort to promote domestic and foreign private sector development. Nonetheless, IEG’s previous review of World Bank assistance to Uganda during fiscal years 1986–98 concluded that the World Bank’s approach to governance has been narrow, primar- ily via its support to improve the transparency and accountability of budget processes and the capacity of the civil service, legal systems, and the planning and financial systems (World Bank-CAE 2001). Independently, a targeted approach to governance was underta- ken by the World Bank Institute, which focused on the government’s anti-corruption cam- paign through a number of workshops on national integrity. Despite this, the World Bank- CAE (2001) concluded that the World Bank had not yet identified effective instruments for intervention on governance prior to 2001. Similarly, for the AfDB, there were no explicit references to governance in previous strategy documents for Uganda, except for the 2002 CSP (AfDB 2004). The CSP only identified go- vernance as a key reform issue when it aligned its objectives with the government’s 2002 PEAP. These concerns underpinned the nature of the World Bank and AfDB interventions on governance during the period reviewed. 13 CHAPTER 3 PROMOTING GOOD GOVERNANCE World Bank and AfDB Governance Strategies The 2001 World Bank CAS highlighted two main governance concerns in Uganda. First, it noted that corruption is systemic and negatively affects private sector development by rais- ing the cost of doing business, consequently constraining growth. Second, it noted that se- curity remained a serious developmental constraint, as demonstrated by the results of the participatory poverty assessment. Consequently, the fourth pillar of the fiscal year 2001 World Bank CAS—ensuring good governance and security—focused on improving public service delivery and decentralization, reducing corruption, ensuring law and order and se- curity, and supporting disaster management. The focus on governance in the 2002 AfDB CSP was through the capacity-building and pri- vate sector development pillar. Under this pillar, AfDB proposed to provide legal support for functional markets; improve the governance framework and the policy environment for enhancing the capacity to make decisions, allocate resources efficiently, and deliver public services effectively, particularly in the districts. The strategy developed by the AfDB is simi- lar to that of the World Bank (though on a smaler scale) in that it focused on economic go- vernance and sought to achieve fairness and equity in the access to public services through non-corrupt and transparent procurement and financial management reforms. Relevance: The governance strategies of both banks during the review period remained narrow, within the mandates of the banks, and have not changed significantly from past policy stances. Both banks continue to support transparency and accountability through re- forms of public financial management systems (though relatively different in scope). The difference this time is that support has been extended to local government entities through decentralization programs. However, though these strategies are relevant and aligned with the PEAP, they failed to define the causal links between the interventions and their expected outcomes. For example, the expected outcomes from World Bank and AfDB support for transparency and accountability reforms (especially as they pertain to public financial man- agement) were indirect and distant in dealing with the problem of corruption. In addition, the strategies could be deemed narrow in scope (especially with respect to the AfDB’s interventions) because they only consider selected components (transparency of public financial management, corruption, and decentralization) of the broad range of eco- nomic governance issues, with a limited emphasis on issues related to political governance, which could have economic implications. Gender equity issues, for example, have substan- tial political governance characteristics that could restrict access to service delivery, under- mining equity. The World Bank assisted in this area through its support for the National Gender Policy (2006), but it is too early to assess the likely impact on governance policy. Fi- nally, because of their concern with restrictions posed by their mandates, the approaches to governance supported by the two banks remain largely technical. The reason for this is found in the absence of a conceptual underpinning for Uganda, which explains the role of World Bank and AfDB assistance relative to that of other development partners. Because governance issues are cross-cutting, developing a conceptual framework that explains the role of other development partners is necessary for an understanding of the likely impact of policy reforms and their development effectiveness. 14 CHAPTER 3 PROMOTING GOOD GOVERNANCE Achievement of Objectives and Assessment of Outcomes World Bank Interventions. The World Bank used two main instruments to support the government of Uganda in meeting its governance objectives. They were specialized sectoral investments, supplemented by the PRSCs and analytic and advisory activities (annex D). The PRSCs provided the framework for addressing cross-cutting public sector management reforms targeted at increasing accountability, reducing corruption, and thereby improving public service delivery. The effort focused on the reform of public procurement, public sec- tor pay, personnel management and accountability, and improved monitoring and evalua- tion (M&E). The PRSCs complemented support for financial accountability provided in the previous period under the World Bank-supported Second Economic and Financial Man- agement Project and the Local Government Development Project (LGDP). Table 5 outlines the achievement of objectives relative to expected outcomes. Table 5: World Bank: Support for the Governance Agenda CAS Pillar Expected Outcome Actual Outcome Contribution Effective Increased number of Financial management and accountability World Bank lending decentralization districts eligible for reforms under local government yielded operations (LG SIL, LGDP II, District Development positive results in building institutions and and PRSC 1-6) supported the Grant under LGDP (see supporting capacity to permit the achievement process (see annex D). annex C) of LGDP grant targets. Transparent, Improved procurement There is scope for improvements in IEG’s country review and efficient, and system procurement reform. performance ratings of the poverty-focused Economic and Financial public expenditure Implementation of Capacity limitations in ministries, department, Management Project and results-based and agencies constrained the PRSC 1-6 suggest management institutionalization of the results-based moderately satisfactory World approach to public service management. Bank contribution. Established sustainable Pay reform not fully achieved. pay reform program (see annex C) Anti-corruption Reduction in Improved accountability has not significantly Strategic approach by World perceptions of reduced the perception of corruption. Bank was not informed by corruption Government effectiveness is perceived not to sufficient analysis and have improved. unambiguous measurement of corruption. The direct links between World Bank support and outcomes were not clear. Sources: Annexes C and D. Notes: CAS=Country Assistance Strategy; IEG= Independent Evaluation Group; LGDP=Local Government Development Project; LG SIL= Local Government Specific Investment Loan; PRSC= Poverty Reduction Support Credit; World Bank. The LGDP (fiscal years 1999–2004) contributed to improving the performance of local gov- ernments with respect to meeting their statutory service obligations through more effective, efficient, and participatory planning, budgeting, and resource allocation. Government re- views indicate that improved local government procurement capacity and ability to manage investments has led to greater impact and allocative efficiency. The proportion of local gov- ernments with functional Planning Committees and three-year development plans in- creased from 30 percent at the start of the project to 89 percent by 2004. The project estab- 15 CHAPTER 3 PROMOTING GOOD GOVERNANCE lished rotational Project Technical Committee meetings at which district teams evaluated each other’s activities. This approach proved effective and has been adopted in a similar project in Tanzania. The project’s outstanding M&E component enhanced its development impact. The results of this project were considered sufficiently positive by the World Bank that a follow-up, second Local Government Development Project (fiscal year 2003) was ap- proved by the Board to sustain improvements in local government institutional perfor- mance and decentralized service delivery. In the area of public financial management (PFM), World Bank support facilitated the gov- ernment’s effort to: (i) improve legislation (for example, the enactment of the budget code) and create a more coherent and strategic fiscal framework; (ii) create an enhanced Integrated Financial Management System; (iii) improve cash, commitment control, and accountability mechanisms; and (iv) upgrade the budget, accounting, and auditing skills of government staff. In terms of procurement reforms at the central government level, all of the ingredients for an efficient, transparent, and accountable system are now in place, though there are im- plementation bottlenecks. A shortcoming of the PFM system is the persistence of budgetary arrears, elimination of which is one of the objectives of improved budget management. The use of a Poverty Action Fund (PAF), in principle, helped to protect poverty-reducing expenditures. However, the PAF is essentially a transitory instrument and protection of poverty-reducing expenditures needs to be a permanent aspect of the budgetary system. Overall, the existence of budgetary arrears implies that the oversight function of the budget needs more attention. The Medium-Term Expenditure Framework (MTEF) has played a major role in budget allo- cation and is taken seriously by the government. The government has maintained a tight macroeconomic policy stance, driven in part by the central bank and guided by the MTEF. Adherence to the MTEF improved the efficiency of budgetary allocation, but the system is under pressure from many sources—for example, excess aid supply from development partners during implementation has implied occasional bypassing of the strict MTEF budget envelopes. These vertical funds introduce severe distortions in expenditure management— distortions with which the MTEF is not structured to deal. In addition, the emphasis on tracking budgetary flows (through the Public Expenditure Tracking Studies), which is good for transparency, is not the same as the tracking of development effectiveness, which is ne- cessary for deciding on budget allocation. In any case, the Public Expenditure Tracking Studies should be part of an audit function and not an independent exercise. Achievements under public sector reform occurred in two phases: the first in the decade be- fore 2000, and the second during 2001–07. During the first phase, World Bank assistance helped redefine the role of government. Indeed, its scope, functions, and employment numbers were substantially reduced. In addition, the LGDPs (fiscal year 2000–2003) in- itiated the devolution of functions and improvements to the incentive framework at the lo- cal government level. World Bank assistance also supported the introduction of the results- oriented management approach in which the ministries, departments, and agencies, includ- ing the local councils, were required to plan, implement, monitor, and evaluate performance quarterly and annually. However, the implementation of the first phase was undermined by weak government commitment, low capacity, and an inadequate incentive system on the 16 CHAPTER 3 PROMOTING GOOD GOVERNANCE part of the ministries, departments, and agencies (especially with respect to low pay and shortfalls in disbursements against budgets) to the extent that it stalled the second phase of the program. The World Bank also used analytic and advisory activities to advance its support, especially with respect to decentralization, promoting accountability, and helping to reduce corrup- tion. The economic and sector work products focused on the performance of public sector service delivery systems to inform World Bank support for decentralization. This was sup- plemented by training programs on decentralization conducted by the World Bank in part- nership with the Rockefeller Foundation and Makerere University to build capacity for pub- lic officers at the district level. Accountability and corruption issues were pursued through expansion of the Public Expenditure Tracking Studies and a conference on corruption in 2001. AfDB Intervention: The support by the AfDB, especially through the Institutional Support Project for Good Governance and the Poverty Reduction Strategy Loan (PRSL), yielded sub- stantial outputs with respect to mechanisms for reducing corruption and improving public fi- nancial management (table 6). Programs for reducing corruption included completion of draft statutes for: (i) the enactment of a Leadership Code and establishment of Government Inspec- torate; (ii) the development of a anti-corruption and whistleblower protection legislation; (iii) the promotion and dissemination of integrity surveys; and (iv) improved access to govern- ment information through assistance for the adoption of principles governing access by ordi- nary citizens. The whistleblower protection legislation has yet to be enacted. Table 6: AfDB Support for the Governance Agenda Country Strategy Expected Actual Outcome Contribution Paper Pillar Outcome Decentralization: Improved Financial management and accountability The PRSL and the Institutional Strengthen local access to and reforms under local governments yielded Support Project for Good government quality of basic positive results in building institutions and Governance supported this institutions and services helping improve access to basic services. objective. OPEV human capacity review rated as satisfactory the PRSL’s outcome and Institutional Support Project for Good Governance’s progress. Public sector Improved Reform programs on procurement yielded The PRSL and the Institutional management procurement modest results. Support Project for Good reforms: system Governance Improve public supported this process. procurement and Improved financial Improved financial management has financial management to helped the government to achieve management achieve poverty expenditure targets with respect to system spending targets poverty spending. Combating Reduced perception Support for accountability and training as The PRSL and the Institutional corruption: of corruption instruments to facilitate reduction in Support Project for Good Strengthen capacity through improved corruption has not helped to significantly Governance constituted the key of anti-corruption accountability and reduce the perception of corruption. support. institutions better audit Government effectiveness is perceived systems not to have improved through the assistance provided for improving audit systems. Sources: Annexes C and D. 17 CHAPTER 3 PROMOTING GOOD GOVERNANCE Notes: AfDB= African Development Bank; OPEV= Operations Evaluation Department of the African Development Bank; PRSL= Poverty Reduction Support Loan. The PRSL also complemented the effort of other development partners, especially the World Bank and the Department for International Development (UK) in the area of public financial management with outputs including: (i) support for the adoption of a Public Finance Bill to improve the legislative and regulatory environment; (ii) the implementation of an Integrated Financial Management System , which has resulted in the production of more timely and reli- able central government public accounts on budget implementation; (iii) capacity building through the provision of accounting staff to the 10 weakest districts; (iv) the conducting of tracking surveys in the service sectors by the Ministry of Finance, Planning and Economic De- velopment and the sectoral ministries; (v) improved audits in the priority ministries, including education, health, and water and sanitation; and (vi) the development of a legislation to trans- form the Office of the Auditor General. Other public sector management reform results associated with AfDB support include the implementation of salary adjustments during fiscal year 2001-02, the decentralization of teachers’ payroll, and the reform of public procurement, especially with respect to the Central Tender Board and the decentralization of the procurement system.2 Assessment of Outcomes. The World Bank and AfDB support for governance improve- ment was aligned with the objectives of the PEAP. The interventions, executed in parallel, focused on financial management and accountability reforms, decentralization and local government development, and public sector reform. However, the strategic relevance of the support was weakened by the absence of a clear conceptual and analytic underpinning. The assessment of IEG and OPEV is that, over the period reviewed, the contributions by the two banks for the first two reforms (financial management and accountability reforms and de- centralization and local government development programs), have yielded satisfactory out- comes. Despite the differences in the scope of interventions, the contributions of the banks have been substantial in the building of institutions and in providing the intellectual back- stopping through capacity building and reform implementation. The outcome of the banks’ support to other areas of public sector reform, especially improved efficiency and reduced perception of corruption, is rated moderately satisfactory. During the period reviewed, the combination of low capacity and weak incentive system in the minis- tries, departments, and agencies (especially in the failure to sufficiently reform the pay and in- centive system) have severely constrained progress in institutionalizing a results-based ap- proach to public service management. Furthermore, the absence of demonstrable results in budget execution (especially in dealing with the divergence between budget agreement and actual allocation) undermined commitment and support for the public sector reforms by both political and technical leaders across government. This could explain the government’s re- quest for additional development partner support to revamp its Public Sector Reform pro- gram. World Bank assistance is currently being provided under the Public Service Perfor- mance Enhancement Project, approved by the Board in fiscal year 2006. The UJAS also notes the nature of unfinished reform in this area and highlights the need for comprehensive public service reforms. 18 CHAPTER 3 PROMOTING GOOD GOVERNANCE These conclusions are reflected in public opinion surveys, which note that overall govern- ment performance with respect to governance reform has not been as impressive as in other areas of reform. For example, according to the World Bank worldwide governance indica- tors, government effectiveness has failed to improve since the beginning of the decade (an- nex A, table 1).3 Although changes in the worldwide governance indicators are subject to caveats common to perception indices, they suggest that between 1998 and 2006, out of six of the indicators, Uganda improved its standing in voice and accountability, political stabili- ty, rule of law, and control of corruption, but with no improvement in government effec- tiveness and regulatory quality.4 The indicators suggest that governance concerns, especial- ly with respect to public sector management, remain paramount. Conclusion The contributions of the World Bank and the AfDB, although different in scope and magnitude, were substantial in helping to build institutions and capacity in government in the three strateg- ic areas of focus on governance and are thus rated moderately satisfactory overall for both banks (see annex D for details on the ratings). The impact of the assistance was lower than expected for two reasons. First, there was no clear analytic or conceptual governance framework to guide the strategic effort and the choice of interventions undertaken by the two banks. There were multiple policy frameworks and matrices that failed to define the causal links between pro- posed policy reforms and anticipated outcomes. Second, the absence of a clear governance framework hampered efforts to measure and monitor progress. For example, there was no adequate diagnosis of corruption in Uganda to permit clear benchmarking. Under such circumstances, the perception that corruption is increasing, al- though possibly correct, was not grounded. In addition, despite substantial effort by the World Bank and the AfDB to support M&E processes for governance purposes, the system continues to be characterized by isolated approaches to the measurement of aspects of governance (such as national integrity surveys, inter-agency forum and review mechanisms, and newspaper opi- nion surveys). Thus, although the Office of the Prime Minister is charged with coordinating M&E (with finance and technical support from Department for International Development (UK)), further support to help the government to formulate a measurable framework for dealing with governance issues would be desirable. 19 Chapter 4 The Growth Agenda Key Challenges At the beginning of the year 2000, the government was faced with the need to sustain im- provements in poverty reduction over the previous 15 years. The proportion of the popula- tion below the poverty line had declined from 56 percent in 1992 to 33.8 percent in 2000, on- ly to rise to 37.7 percent in 2003 before declining again to 31 percent in 2005. Sustaining improvements in poverty reduction depended on resolving three challenges identified in the 2001 World Bank CAS: maintaining the high pace of economic growth experienced in the 1990s, spreading the benefits of the growth nationwide, and dealing with high popula- tion growth. Growth in the 1990s relied on the use of existing capacity.1 The CAS deemed the pattern of growth unstable due mostly to changing weather patterns and price shifts in agricultural production, which grew, on average, at a pace lower than the rest of the economy and just about at the rate of population growth. It was clear that Uganda’s reliance on unused capac- ity was not sustainable—the low investment-to-GDP ratio (around 12 percent of GDP in 2000) was an important concern. Increasing investment to sustain a high rate of economic growth was therefore a priority. To achieve this objective, the PEAP noted that Uganda needed to: (i) maintain a macroeconomic framework supportive of economic growth; (ii) remove barriers to the creation and operation of private business; and (iii) address con- straints, such as the low availability of electricity, high cost of finance, and poor transport connection with regional and global markets. The creation of conditions for sharing the benefits of growth nationwide required focusing attention on agriculture, which is the source of income for the majority of the population. Achieving this objective was demanding because past growth in agriculture was driven by expansion in land use, and because of the extensive employment of traditional technology associated with very low productivity. Production was also largely undertaken to meet subsistence needs as farmers’ access to markets was limited by poor transport and market- ing services. The role of weather in production (yields) and marketing (transport) remains unclear, as a recent study by the Ministry of Agriculture, Animal Industry and Fisheries (Uganda Bureau of Statistics, 2006) found no significant relationship between rainfall and agriculture GDP. In addition, the rural economy other than agriculture was quite undeve- loped except for cash crops (coffee, tea, and cotton). Finally, the high rate of population growth posed a challenge. The high dependency ratios burdened household incomes and public service delivery. A rapidly growing labor force, yet to reach its peak, called for ra- pidly expanding income-generating opportunities. The 2000 PEAP clearly identified these challenges and the 2005 PEAP reiterated them. 21 CHAPTER 4 THE GROWTH AGENDA World Bank and AfDB Strategies The 2001 World Bank CAS and the 2002 AfDB CSP aligned their growth strategies with the growth and structural reform pillars of the 2000 PEAP. The growth pillar focused on “creat- ing a framework for economic growth and structural transformation.” Under this pillar, both banks subscribed to policies to promote growth and achieve macroeconomic stabiliza- tion, facilitate competitiveness, and support agriculture and environmental sustainability. The second pillar provided assistance to the government’s effort to increase the ability of the poor to raise their income. Under this pillar, both banks focused on support for the gov- ernment’s Plan for the Modernization of Agriculture (PMA), environment, improved rural roads, and the provision of energy for the rural sector. In addition, the World Bank sought to provide assistance to help reduce the regional disparity of poverty. The UJAS built upon the 2005 PEAP (with the introduction of a results framework) thus enabled the two banks (and the UJAS partners) to monitor the performance of their assis- tance programs. The UJAS did not entail a significant change in the thrust of the assistance of either the AfDB or the World Bank, as the pillars on the growth agenda are similar to those of the 2002 CSP and the 2001 CAS. Relevance of the Strategies. In aligning their assistance to corresponding government strate- gies, the two banks responded to the need to meet ownership concerns. The emphasis on agriculture and rural incomes was appropriate, as was the emphasis on improving basic ser- vices such as energy and transport. Both banks relied for the design of their strategies on pre- vious or concurrent evaluations. For example, the World Bank’s strategy reflected the rec- ommendations of the 2001 CAE, which pointed to the challenges of sustaining economic growth—infrastructure, macroeconomic environment, finance, and so on. The 2001 CAS also emphasized improving governance, which was seen in the 2001 CAE not only as a necessity for growth, but also for the sustainability of Uganda’s recovery efforts. The strategies also were informed by the available analytical work. However, some impor- tant pieces of analysis of the challenges and constraints to growth were not provided in time, particularly in agriculture. Hence, development partners in strategic initiatives, such as the PMA, lacked a clear sense of priority and guidance in selecting the most critical inter- ventions for poverty reduction. AfDB’s analytical work on agriculture in 2004 (under the Farm Income Enhancement Project) and 2005 (Agriculture and Rural Sector Review), on the other hand, helped to refocus its agenda. However, despite the negative stocktaking of the CAS Completion Report (CASCR) in 2005, particularly on growth, the strategy of World Bank support (2005 UJAS) remained roughly unaltered on growth, with the emphasis on developing a joint framework for donor alignment (along the lines of the Paris Declaration). The CASCR does not raise the lack of analytical work, but the UJAS did call for economic and sector work, and the analytical deficit has since been addressed. Achievement of Objectives and Assessment of Outcomes The evaluation is based on the pillars defined in the strategies of the World Bank and the AfDB. These are summarized under three themes: growth and structural transformation, enhancing competitiveness, and modernizing traditional agriculture and preserving the en- 22 CHAPTER 4 THE GROWTH AGENDA vironment (annex C). In the absence of result matrices for the 2001 CAS and the 2002 CSP, except for few defined targets in the strategy documents of the two banks, the benchmarks contained in the UJAS are used to guide the evaluation process. Growth and Macroeconomic Stability. The World Bank and AfDB had similar growth and stabilization agendas, which were developed in consultation with the IMF. As indicated in table 8 (for World Bank) and Table 9 (for AfDB), the expected outcomes are similar and re- flect the PEAP goals. Most of the targets established under the PEAP, and therefore for the CAS and CSP, were met. On the basis of the old National Accounts series, economic growth from 2000 to 2007 is estimated at 5.8 percent per annum, marginally slower than in the 1990s and below the CAS/CSP target of 7 percent per annum. Adverse terms of trade (mostly on coffee) in the early 2000s contributed to slower growth than expected. On the basis of the revised series of National Accounts, however, growth during fiscal years 2001-07 (Uganda’s fiscal year, not calendar year) averaged 7.5 percent (in excess of the target established in the PEAP). Since the PEAP targets were based on the old National Accounts series, the discus- sion in this CAE is based on the old series (annex table 2). Macroeconomic stability was largely attained through an effort to maintain low inflation (at 5 percent per annum), a sta- ble and nonappreciating exchange rate, improved fiscal management with an emphasis on revenue mobilization, and expenditure management. Table 7: Poverty and Income Inequality Trends, 1999/2000—2005/2006 1999/2000 2002/2003 2005/2006 Povertya National 34 38 31 Rural 37 42 34 Urban 10 12 14 Central 20 22 16 Eastern 35 46 35 Northern 64 63 61 Western 26 31 21 Inequalityb National 0.395 0.428 0.408 Rural 0.332 0.363 0.363 Urban 0.426 0.477 0.432 Sources: PEAP (2004) and World Bank (2007c). a. Proportion of the population living below the national poverty line (excluding Kitgum, Gulu, Bundibugyo, Kasese, and Pader). b. Income inequality as measured by the Gini coefficient. The proportion of the population living below the national poverty line rose from 34 percent in 1999/2000 to 38.8 percent in 2002/03, and declined to 31 percent in 2005/06 (table 7). The deterioration in poverty during the period 1999/2000—2002/03 was due to a rise in income poverty in rural areas, where the proportion of people living below the poverty line rose from 37 percent in 1999/2000 to 42 percent in 2002/03. Poverty was often transitory for those with incomes outside of crop agriculture, but it tended to be chronic for those who relied primarily on crop agriculture for their livelihood. Income inequality (as defined by the Gini coefficient) 23 CHAPTER 4 THE GROWTH AGENDA followed the poverty trends during the period by worsening during 1999/2000—2002/03, and improving by 2005/06. The conflict-affected north remained the poorest region (with 60 per- cent of the population living in poverty in 2005/06). Overall, the medium-term trends show signs of improvement in poverty. The World Bank supported growth and stability through PRSCs and analytical work, as well as coordinating with other development partners, notably the IMF and the AfDB. Gov- ernment officials noted that although the World Bank was very active in providing macroe- conomic advice during the 1990s, it was less so in the 2000s when the analytic support dimi- nished. The two banks benefited from the IMF’s leadership in macroeconomic stabilization and foreign exchange issues that sought to minimize the onset of “Dutch disease.” The World Bank complemented the IMF with the necessary institutional assurances of the PRSC series. The 2005 PRSC and the UJAS brought the link between macroeconomic policies and growth to the forefront, and the World Bank played a vigorous leading role. Table 8: World Bank Support for Growth and Macroeconomic Stability Country Assistance Expected Outcome Actual Outcome Contribution Strategy Pillar Economic growth High real GDP growth Perception of slowing The PRSC 1-6, the Oil Shock (7 percent) growth and stalled poverty Supplemental (fiscal year 2001), Reduce regional disparities reduction was not dealt supplemented by the Poverty in poverty with before the completion Assessment report and the fiscal year of the 2004 PEAP mainly 2006 Country Economic Memorandum due to delayed analytic supported the dialogue along with other support. Effort made to development partners. The Northern deal with regional disparity Uganda Review (fiscal year 2007) in poverty was substantial. provided a framework for support in reducing regional disparity in poverty. Macroeconomic Inflation of 5 percent Fiscal prudence was Same as above. AfDB, UK Department stability Nonappreciating exchange maintained; although for International Development, and the rate arrears remain due to IMF complemented the World Bank’s implementation effort. 5 months import coverage on weaknesses with MTEF. balance of payments Revenue mobilization Increased revenue/GDP ratio remains weak and the government’s aid Reduced fuel levies dependence remains high. Increased PAF share of total expenditures Sources: Annexes C and D. Note: African Development Bank; GDP=gross domestic product; IMF= International Monetary Fund; MTEF= Medium-Term Expenditure Framework; PAF= Poverty Action Fund; PEAP=Poverty Eradication Action Plan; PRSC= Poverty Reduction Support Credit. The AfDB supported the government’s macroeconomic policy implementation mainly with the Institutional Support Project for Good Governance (table 9), which emphasized institu- tional and capacity building for public financial management. Jointly with the IMF and the World Bank, the AfDB supported Uganda’s participation in the Heavily Indebted Poor 24 CHAPTER 4 THE GROWTH AGENDA Countries (HIPC) process, beginning in 1998 and culminating in 2006 with the Multidonor Debt Relief Initiative (MDRI). Resources from MDRI (including future interest) delivered in 2005/06 and 2006/07 amounted to $3.6 billion. As a result, Uganda’s external debt dropped to 13 percent of GDP at the end of 2006/07, compared to 47 percent a year earlier. The HIPC dialogue contri- buted important byproducts such as pro-poor budgeting and the capacity to track these ex- penditures. The resulting PAF has grown to 65 percent of the budget and execution of the expenditures included in the PAF has been on track. On the other hand, AfDB support has not been able to help improve internal revenue mobilization (taxation), which has increased marginally from 10.3 percent of GDP in 2001 to 12.6 percent of GDP in 2007. Flows of donor assistance have remained relatively stable at around 9 percent of GDP. AfDB also provided assistance for export diversification through its support for agricultural modernization, the outcome of which was substantial. Table 9: AfDB Support for Growth and Macroeconomic Stability Country Expected Outcome Actual Outcome Contribution StrategyPaper Pillar Promote fiscal Real GDP growth of Despite its narrow and focused support, Program of support was sustainability 7 percent AfDB’s contribution was substantial in driven by the Institutional Improve tax Inflation contained to achieving the poverty-reducing expenditure Support Project for Good administration 5 percent targets. Fiscal prudence was maintained, Governance (2004) and Public expenditure Stable and though arrears remain. Revenue complemented by a part of reform nonappreciating mobilization remains weak. the PRSL that supported exchange rate financial management Increase tax reforms. revenue/GDP ratio PAF share of total expenditure increases to at least 25 percent from current base Diversify exports Foreign reserves at Progress on export diversification The area-based 5 months of imports occurred, which cushioned the wide Agricultural Modernization fluctuations in export prices and Program (2000) and other unfavorable terms of trade. International support for diversification reserves increased to 6.5 months of accounted for progress. imports cover by fiscal year 2007. Sources: Annexes C and D Notes: AfDB=African Development Bank; GDP=gross domestic product; PAF= Poverty Action Fund; PRSL=Poverty Reduction Support Loan. In general, the use of budget support (World Bank PRSCs and the AfDB’s PRSL) failed as an in- strument to coordinate assistance on growth. Perception of slowing growth and stalled poverty reduction informed the preparation of the 2005 PEAP, and its call for the government to refocus its efforts on faster growth. The World Bank analytical work on growth was delivered too late to be of use; the Country Economic Memorandum was only initiated in 2005 and not published until 2007.2 This explains the failure of the 2005 PEAP and the UJAS to make a major drive in support of growth. 25 CHAPTER 4 THE GROWTH AGENDA Despite the relatively weak focus on growth, substantial progress was made on macroeconomic stabilization and fiscal prudence, and IEG rates the outcome of World Bank support in this area as satisfactory. Even with its narrowed and focused interventions, AfDB’s contribution sub- stantially helped the government to meet its poverty-reducing expenditure targets. Overall, the contribution of the AfDB is also rated satisfactory. Enhancing Competitiveness. The World Bank and AfDB support to promote the econo- my’s competitiveness was built on three infrastructure components required to support pri- vate sector development: (i) financial sector development and privatization, (ii) reform of the energy sector, and (iii) support for transport, especially road construction. The two banks collaborated in these areas and were complemented by the IFC (on finance, privatiza- tion, and the power sector) and the IMF (on finance). An evaluation of the program for the IFC during 1999-2008 is contained in Chapter 6. The outcome of World Bank support is summarized in table 10, and the outcome of AfDB sup- port in table 11. A review of country outcomes provides the backdrop for assessing the con- tributions of the two banks. Table 10: World Bank Support for Enhancing the Economy’s Competitiveness Country Expected Outcome Actual Outcome Contribution Assistance Strategy Pillar Private No defined benchmarks Administrative constraints to private sector Private sector sector and targets development have improved, but not significantly. competitiveness project, development Key market ratings showed marginal improvement. supplemented by a number World Bank support for industrial zone and land of economic and sector work cadastre experienced delays. products on private sector development, including investment climate assessment. Financial sector Sustained supervision of Although intermediation and interest rates remain Country Financial development commercial banks high, credit grew fast, leading to substantial financial Accountability Assessment, Increased financial intermediation. World Bank support in areas such as Counrty Procurement sector competition pension reform is behind schedule. Assessment Report, and Financial Sector Efficient handling of Assessment underpinned cases the Regional Trade Facilitation and Financial Market assistance project. Energy Increased rural access to Timing of successful unbundling of Uganda Wide-ranging power sector development electricity Electricity Board (UEB), coupled with supply crisis projects, including Separate UEB activities as a result of delayed completion of the Bujagali Privatization and Utility hydroelectric power plant and water shortage in Sector Reform Project (fiscal Increased private Lake Victoria constituted a strategic failure in risk year 2001), provided World investment in power assessment. Increases in rural access and private Bank leadership in the generation investment in power were limited. sector, complimented by IFC, and by AfDB. Transport & Improved rural roads Substantial improvements in road network. But high Road sector adjustable logistics through repair and institutional orientation of infrastructure support has program loans (APLs) were maintenance yet to yield results. High cost of transportation central to reform support by 26 CHAPTER 4 THE GROWTH AGENDA District roads fully continues to be major constraint to business World Bank in the sector. repaired by 2016 profitability. Other development partners included AfDB and the European Commission. Sources: annexes C and D. Notes: AfDB=African Development Bank; APL=adjustable program loan; IFC=International Finance Corporation; UEB=Uganda Electricity Board. A 2003 World Bank-IMF Financial Sector Assessment Program, a follow-up report in 2005, supplemented by the 2007 Country Economic Memorandum, noted progress in creating a sturdy financial sector and identified a reform agenda. However, the follow-up had mixed implementation outcomes, for instance, pension reform stalled. The intent to assist in the privatization of the Uganda Commercial Bank through a free-standing operation did not happen, as the Parliament did not approve it, though the privatization process went ahead.3 With respect to microfinance, the World Bank, working with German Technical Cooperation (GTZ), Swedish International Development Cooperation Agency (SIDA), and the UK De- partment for International Development, assisted in the design of a regulatory structure consistent with the macroeconomic framework. In terms of outcomes, although intermedia- tion and interest rates remained high, credit grew fast, leading to a substantial financial deepening. Sustained efforts at reform during the 1990s had produced a fairly robust finan- cial sector by the early 2000s, basically by clearing bad debts. The bulk of the banking sector became private with the privatization of the largest bank—the Uganda Commercial Bank. Access to finance is not a major problem for large firms, but it is for small and medium en- terprises. The nonbanking financial sector remains in its infancy and the availability of long-term fi- nancing is limited, although efforts are now underway to develop housing finance (mort- gages) and leasing. Since much of the gains made in the financial sector cannot be directly attributed to any operation supported by the AfDB, its contribution is not rated. On the other hand, World Bank assistance in the form of investment operations and analytic and advisory activities, supplemented by the IMF, could be rated satisfactory (table 10). The World Bank and AfDB, through independent vehicles, also facilitated improvement in the enabling environment for private sector development. They supported the government’s pri- vatization program, helped to deal with administrative constraints to business, and enhanced assistance to SMEs. The policy of privatization and private sector development implemented by the government in the 1990s was continued in the 2000s, with the liberalization of tele- communications and the participation of foreign private firms in railways, telecommunica- tions, and energy. The program of privatization, along with the broader reform of improving the business environment, yielded modest results. The ratio of private investment to GDP in- creased from 13.7 percent in 2002 to 19.1 percent in 2007; public investment showed a slight decline of about 1 percent of GDP between the beginning and the end of the period. On the other hand, the ratio of foreign direct investment (FDI) to GDP has remained stable at 3 per- cent of GDP, and only increased recently. 27 CHAPTER 4 THE GROWTH AGENDA Table 11: AfDB Support for Enhancing the Economy’s Competitiveness Country Strategy Paper Expected Outcomes Actual Outcomes Contribution Pillar Strengthen institutional UEB separated into Economy’s competitiveness was Support was provided capacity of regulatory entities responsible for not significantly enhanced through the Alternative agencies generation, transmission, because of failure to resolve the Energy Resources Access and distribution power issue, although support was and Utilization Study (2000), Increase investment in Generation capacity provided for alternative sources of which followed the Urban power generation capacity expands energy. Power Rehabilitation Project. Commercial generation and Increased access of rural distribution of energy in rural populations to power areas Rehabilitation and upgrading Inventory of main roads Road sector support has not Support came from the of national roads network classified as resulted in substantial cost Road Maintenance and satisfactory increases reduction, but support for Upgrading Project (2000) Rehabilitation and Increased accessibility in communal roads is helping open followed by the Transport maintenance of district roads rural areas up the rural area. Neither AfDB nor Development (2003) and the the World Bank has supported Road sector Support direct investment in new district Projects (2005/06). roads. Provide enabling Competition in financial Focus on rural finance has helped The Rural Microfinance environment for private sector increases improve availability of lines of Support Project (1999) and sector development Legal framework improves credit for on-lending to SMEs. the Sustainable Management of Mineral Improve access of SMEs to Availability of lines of credit Resources were critical commercial banks for on-lending to SMEs support programs. Source: Annexes C and D. Note; AfDB= African Development Bank; SMEs= small and medium enterprises; UEB=Uganda Electricity Board. . Overall, Uganda has not made any major gains in improving the business environment since 2000. The World Bank’s control of corruption indicator still has Uganda ranked at 147 out of 201 countries in 2006. The Institutional Investor country credit rating shows a marginal im- provement. However, the Index of Economic Freedom moves in the opposite direction. No major changes have taken place in the Political Risk Rating, and the Doing Business Ranking places Uganda at 118 out of 178 countries surveyed, two places down from 2006. Uganda’s ranking in the various components of Doing Business varies widely. The worst rankings are on registering property (163) and getting credit (158)—suggesting that access to finance may be the most critical problem that businesses face. Uganda also ranks poorly in trading across borders (141)—although there was a major improvement from 2006 when the ranking was (162), which tended to be the case for landlocked countries. Protecting investors (122) and starting a business (114) ranks around the average. The country ranks well in labor market flexibility. Based on country performance, assistance for the regulatory environment has not led to substantial reductions in the cost of doing business in Uganda. World Bank assistance, which provided grants for enterprise modernization, a popular program for Ugandan busi- nesses, aimed at substantive improvement in the business environment, which has not hap- 28 CHAPTER 4 THE GROWTH AGENDA pened. Attempts to create a Venture Capital Fund came to naught. A follow-up private sec- tor development (PSD) operation continued support for improving the business environ- ment and enterprise upgrading, as well as development of a land registry and the creation of an industrial park. In interviews, private sector representatives expressed regret that no major progress has been made on the latter. The support for improving the quality of the business environment produced mediocre results. On this basis, the outcome of World Bank support is rated moderately unsatisfactory. The AfDB’s involvement in PSD was highly limited relative to expectations. The AfDB CSP included a separate pillar on PSD, but the program of assistance was limited to SME devel- opment and discrete private sector investment (table 11). The AfDB was the official chair of the PSD working group, but it was one of the least active. Despite the absence of structured AfDB support for the private sector, the Bank’s assistance for improving access to credit for SMEs yielded substantial results. On this basis, the assistance provided by the AfDB for pro- moting privatization and private sector development is rated moderately satisfactory. The World Bank led in assisting with the institutional transformation of the power sector, but in this area the two institutions worked closely together. Apart from differences in the magnitude of financial and staff support, separate attribution would be difficult. The World Bank had provided technical assistance for the design of the institutional overhaul of the electricity system at the end of the 1990s that led to the Electricity Act. The 2001 CAE noted widespread frustration with the delays in refurbishing and increasing power capacity under the Uganda Electricity Board (UEB). After 2000, the World Bank focused its assistance on the implementation of the Electricity Act with the Privatization and Utility Sector Reform Project (fiscal year 2001), complemented by the Power Sector Investment Loan (fiscal year 2002). The World Bank and AfDB continued supporting the upgrading of electricity infra- structure. The World Bank, with other donors, supported the completion of the expansion of the Owen Falls hydroelectric power plant through the Power Sector III and Power Sector IV projects, with the latter still under implementation. The AfDB supported the UEB through the Urban Power Rehabilitation Project (1996) to im- prove the transmission network and to reduce losses, and unbundle its operation into sepa- rate entities. Beyond this action, both the World Bank and the AfDB supported the govern- ment in its efforts to get the Bujagali hydroelectric power plant project underway, following the failure of initial efforts to get private sector participation. The power crisis of 2005 led the World Bank and the AfDB to revamp their support for Bujagali hydroelectric power plant. With the crisis came an added awareness and prompt support of the government’s efforts to add to capacity on an emergency basis and to carry out a long-term strategy of capacity ex- pansion.4 29 CHAPTER 4 THE GROWTH AGENDA Box 3. Power Sector Reforms Uganda undertook transformation of its power sector institutions as part of its effort to increase supply and eliminate the need for public funds by involving the private sector. The transformation sought to ad- dress the economic and financial difficulties besetting the public monopoly (UEB) by putting into practice ideas from the 1980s and 1990s to improve the performance of the power sector. Unbundling the mono- poly, promoting private sector participation, and establishing the regulatory framework were important to the new paradigm. In this context, since 2000, Uganda: (i) unbundled the UEB into generation, trans- mission, and distribution companies; (ii) created a power regulator; (iii) created a Rural Electrification Agency after realizing that the new operators were not going to extend power to rural areas without heavy subsidies; (iv) placed the distribution and generating companies in private hands; and (v) sought to engage the private sector in the generation of additional capacity, although some of the foreign firms cur- rently involved are not private but quasi-governmental organizations. Severe risks that materialized during the period handicapped the capacity to deliver on the intended objectives of the original strategy: the Bujagali hydroelectric power plant, downstream from Owen Falls hydroelectric power plant, did not come on line by 2005 as originally planned—consequently, the 200 MW did not come into operation. The first attempt failed due to: (a) the withdrawal of the operator that was selected from the agreement; (b) civil society’s concerns about potential ecological conse- quences; and (c) delays on funding, tariff, and power purchase agreements. The water level in Lake Victoria began dropping in 2001, and a drought in 2004 further reduced the ca- pacity to generate electricity from Owen Falls and its extension. The expansion of Owen Falls during the late 1990s and early 2000 was undertaken as a stopgap until the Bujagali hydroelectric power plant could be brought on line. The expected generating capacity of the old dam and the extensions were estimated at up to 300 MW. The works were completed, but the effective capacity has been halved because of the low water level. Source: IEG interviews. Despite their efforts, the resulting institutional arrangements in the power sector promoted by the World Bank and the AfDB differed substantially from the original intentions. The ob- jective of minimizing government participation in the sector was not met. First, the gov- ernment continues to provide transfers to the distribution company as part of the agreement to raise tariffs to levels that make the operation profitable. Second, the budget continues to support transfers for the construction of the thermal plants. Third, to engage the private sector in generation, the transmission company (still owned by the government) has had to engage in power purchase agreements to ensure that all energy produced by the generators is purchased at the agreed price. A guarantee was extended to the distributor to ensure that tariffs meet costs and generate a profit. In addition, subsidies are to be extended to potential investors to reduce capital costs. The assessment of the risks to the strategy was weak. The risks of increasing energy short- falls at the beginning of 2000 were high, and the postponement of the Bujagali hydroelectric power plant added to the risks. Even at normal water levels, this risk could have materia- lized due to the growing demand for energy in the country. In addition, no account was taken of the risks implicit in the institutional design, most importantly the readiness of re- putable private operators to engage, without excessive caveats, given the institutional situa- tion in the country. Still, the contract with the distributor sets targets for increased connec- tion and these targets have been met. Efforts to increase access in the rural areas have also had limited achievements.5 30 CHAPTER 4 THE GROWTH AGENDA Because the two banks worked closely in the energy sector (especially on power), the weak- nesses in performance were equally reflected. For the World Bank, the timing of the suc- cessful unbundling of UEB, coupled with the supply crisis as a result of the delayed comple- tion of the Bujagali hydroelectric power plant and water shortage in Lake Victoria, constituted a strategic failure in risk assessment. Limited progress was also made on in- creasing rural access to power and promoting private sector participation in the sector. On this basis, the outcome of the World Bank support on energy is rated moderately unsatisfac- tory. The limitations identified for the World Bank in the power sector also applied to the AfDB. However, AfDB support extended beyond institutional reform and the focus on the hydroe- lectric power plant into other renewable energy sources, where substantial results were de- rived. Thus, the overall outcome of its support for the energy development is rated mod- erately satisfactory. As in the power sector, the World Bank and AfDB have been major partners in consistently supporting the government’s rehabilitation of the national roads network. World Bank support consisted of the Roads Development Adjustable Program Loan (APL) (fiscal year 1999), with a follow-up in fiscal year 2005. AfDB’s support was broad-based and comprised a Road Maintenance and Upgrading Project (2000), a Transport Sector Development Pro- gram (2003), and a Road Sector Support Project (2005). The main focus of these operations was the rehabilitation of selected roads within the national road network. The consultation with government and members of the sector working group has led to a clear strategy on the process for selecting roads to rehabilitate, with emphasis on major routes like the north- ern corridors linking Kampala to Mombasa, and the establishment of strategic linkages with the Democratic Republic of Congo, Rwanda, Sudan, and Tanzania. Limited support was provided to other components of the road network. Neither the AfDB nor the World Bank supported direct investment in district roads with new operations during the review period. However, the World Bank is exploring areas of potential intervention in district roads cover- ing over 1,000 kilometers. Similarly, the AfDB, based on the preparatory work done by the World Bank, is likely to return to financing district roads. Notwithstanding the absence of quantifiable outcome targets, the support by both the World Bank and the AfDB has helped to rehabilitate and build the road infrastructure as well as establish the relevant institutional and regulatory framework as defined in the 2001 CAS and the 2002 CSP. Despite these improvements, Ugandan entrepreneurs rank trans- portation as the greatest impediment to doing business. The cost of transporting goods from Kampala to Mombasa (the main seaport) — by road or rail—remains high. A limita- tion of World Bank and AfDB assistance has been an over-emphasis at the project level on meeting notional quantitative output targets rather than focusing on likely economic impact of network development. As a result, travel times and costs were not reduced as much as they could have been. The strategy for transport should have given equal emphasis to increasing effective access to regional and global markets for Uganda. In addition, better monitoring and evaluation would have been desirable. Detailed statistics to track progress on costs and travel times are lacking. Thus, although adequate progress was made on the partnership forum and in es- 31 CHAPTER 4 THE GROWTH AGENDA tablishing the institutional arrangements to make it possible to focus on economic impact as a key driver for investment and regulatory simplification, overall the support to transporta- tion and logistics is rated moderately satisfactory for both institutions based on the modest economic outcomes. Improving Income of the Poor. The support of both the World Bank and the AfDB for the development of agriculture was channeled through the PMA. Implementation of the PMA was partial, focusing mostly on the first two pillars, which covered developing and transfer- ring technology to the poor. The National Agriculture Research Organization was trans- formed into an apex institution to oversee a network of research centers and provide financ- ing through grants. The approach was intended to respond to demand and bring competition into research. In addition, the government used the National Agricultural Ad- visory Services to put into place a nationwide system to transfer technology to farmers at all levels. The World Bank support focused largely on institutional development, which helped generate a wide range of new technologies in crops, livestock, and fisheries. The AfDB adopted a more integrated framework with a wide range of operations covering smallholder agriculture (1999), agriculture modernization (2000), fisheries and livestock de- velopment (2002), and community infrastructure (2007). Building on analytical work done in 2005, the AfDB shifted to an integrated approach to rural development emphasizing mar- keting and infrastructure, including irrigation and communal roads. This is a welcome de- velopment that seeks to redress the unbalanced implementation of the PMA, but it is too early to assess results. Agricultural growth continues to lag with respect to the overall growth of the economy, as it did in the 1990s (figure 2). The sector is subject to price and weather shocks, and fluctua- tions in agriculture induce similar fluctuations in the overall economy. Much of the agricul- ture continues to be for subsistence, with limited market surpluses. There is a small pure cash economy around coffee, cotton, and tea, which accounts for around 9 percent of the value added in agriculture.6 Given the rapid growth of incomes in the urban economy, the Figure 2: Comparative Sectoral Growth of Real GDP 12 Agriculture 10 Industry Services GDP growth (p ercen t) 8 6 4 2 0 1999/2000 2000/2001 2001/2002 2002/2003 2003/2004 2004/2005 2005/2006 2006/2007 Source: Uganda Bureau of Statistics. 32 CHAPTER 4 THE GROWTH AGENDA growing markets of neighboring countries (Uganda is a net exporter of border trade to neighbor countries), and the improving terms of trade for important cash crops such as cof- fee, a secular stagnation of agriculture is unlikely. Therefore, it is reasonable to assume that traditional agriculture has grown with internal demand, which should be between 2.5 and 3 percent per annum, close to the level projected in the PEAP. Many reports point to the fail- ure of excess production to reach markets in Uganda or in neighboring countries. Indica- tions are that the farm-to-market linkage needs substantial improvement to realize the effec- tiveness of the strategy of raising the income of the poor. A weakness of the support by both the World Bank and the AfDB is the failure to comple- ment the assistance with timely economic and sector work. Until a 2007 review of the sec- tor, the last major formal review by the World Bank took place in 1993. The lack of good analytical work may have accounted for the limitations in the prioritization of the PMA and its unbalanced implementation. As reflected in the modest performance of the agriculture sector since 2000, the impact of the PMA has been uncertain. Progress was made in the areas that received assistance from development partners, namely, capacity building for the National Agriculture Research Organization and the expansion of the National Agricultural Advisory Services nationwide. However, their impact on the transformation of traditional agriculture, including productivity increases, remains undefined. Support for improving communal roads and rural infrastructure, especially by the AfDB, made substantial progress. In general, the World Bank and the AfDB have yet to develop a more integrated approach to supporting agriculture and rural development. The overall poverty impact of the assistance provided by the two institutions under this agenda is also not clear. Although the national level of poverty has fallen since 1999/2000, the decline in the percentage of households below the poverty line has varied across differ- ent occupation types (figure 3). Other than manufacturing (and construction and trade, in which the percentage of households below the poverty line actually increased), the decline in the percentage of households below the poverty line was lowest (2.2) among those en- gaged in crop farming. The decline in the percentage of households below the poverty line was highest for those engaged in non-crop agriculture (livestock, fishery, forestry, and so on). Since the majority of Ugandan smallholders are engaged in crop farming, the limited decline in the percentage of households below the poverty line in the crop subsector may re- flect the perceived slow rate of growth of the agriculture sector. 33 CHAPTER 4 THE GROWTH AGENDA Figure 3: Percentage of Households below the Poverty Line 100 80 1999/00 Percentage 60 2005/06 40 20 0 Crop Non-crop Manufacturing Construction T rade Gov't services Note: By occupational groups: Crop=Crop farmers; Non-crop=Non-crop farmers; Govt Serv=Government Services Source: Ministry of Finance, Planning and Economic Development (2006). The outcome of the World Bank support for improving the income of the poor through agri- culture productivity remains unclear. Support by the World Bank for agriculture, although well focused, was too heavily based on institution building and yielded limited evidence on the realization of its poverty-reducing objectives. The analytic underpinning was also not timely. On this basis, the contribution of the World Bank to improving the income of the poor through agriculture is rated moderately unsatisfactory. The AfDB had a largely rural focus to its support for improving the income of the poor through increased agriculture productivity, but the diversification program yielded mixed results. The expectation of a sustained growth of 3 percent per annum for agriculture was not achieved, but the integrated approach supported by AfDB is helping to reduce soil de- gradation, commercialize small-scale agriculture, and develop fish and livestock. Therefore, the contribution of AfDB is rated moderately satisfactory. Support for the preservation of the natural environment: The World Bank’s main assis- tance was in the form of institution building for the National Environmental Management Agency (NEMA), which oversees a well-articulated network of environment institutions in the country. NEMA plays an important role in assessing the environmental impact of in- vestment projects. It has carried out this responsibility judiciously despite occasional con- cern about objectivity. Support was also provided by the World Bank for establishing envi- ronmental benchmarks for Lake Victoria. However, the authorities expressed concern that excessive emphasis was placed on undertaking studies to construct benchmarks, rather than focusing on improvement in the livelihood of the communities that live around the lake. The outcome of World Bank support is rated moderately satisfactory. In the absence of specific AfDB operations to support the environment, its contribution to the integration of environmental concerns in development programs and to strengthen NEMA is not rated (non-evaluable) as these are embodied in projects that were supported. 34 CHAPTER 4 THE GROWTH AGENDA Conclusion The overall rating for the outcome of support for the growth agenda is moderately satisfac- tory for both institutions, although there are nuances between the two. In agriculture, both institutions provided the right support but failed to significantly modernize the traditional agriculture. AfDB, building on its dialogue, emphasized support for rural infrastructure— communal roads, marketing, and irrigation—that has come to be seen as the basis for an ef- fective modernization of agriculture. Similarly, despite the efforts of the two institutions to help improve the coverage and availability of power and to reduce its cost, the current sta- tus is about a decade behind expectations. In terms of improving the environment for PSD, some progress was made in the environment for doing business, in linking Uganda to the rest of the world. Advances in road reform and other transport systems are underway. Yet, as costs remain high, entrepreneurs continue to rank transport services a major barrier to business. 35 Chapter 5 The Challenge of Human Development Context. The policy environment for human development was defined by the PEAP (2000, 2005). The national health policy was developed in the Health Sector Strategic Plan (HSSP- I) launched in 2000, which was followed by the HSSP-II in 2005. With the facilitation of the World Health Organization and the leadership of the Ministry of Health, a health sector- wide approach (SWAp) among development partners was launched in 1999. In education, two major policy events were critical to shaping the direction of the sector. A massive push was made toward the achievement of universal primary education following the President’s announcement of free primary education during an election campaign in 1996. Under the initiative, all school fees were waived for up to four children in a family, two of which should be girls.1 At the same time the government, introduced a SWAp that helped to sharply increase public spending on primary education.2 The impact of the universal pri- mary education initiative on demand for education was unparalleled. Within a year the number of children enrolled in primary school increased by almost 70 percent to a total of 5.2 million by 1998. Gender stereotypes are still deeply ingrained in Ugandan society. Among the measures put in place to address gender issues and improve women’s lives and position relative to that of men are the initiatives embodied in universal primary education—accompanied by a media campaign to promote education for girls and delayed marriage, which greatly benefited girls’ schooling—and the abolition of user fees for health services, which has been particu- larly beneficial for women’s health care needs. Provisions have also been made for affirma- tive action with regard to girls’ admission to higher education and quotas have been set for female political representation on the national and subnational levels. Gender considera- tions received a major boost during the 2005 PEAP revision, which introduced enhancement of gender equality as a key measure for economic growth. World Bank and AfDB Strategies Assessment of the Relevance of World Bank Strategy. The human development strategy of the World Bank, as defined in the 2001 CAS, was aligned with the fourth PEAP pillar (di- rectly increasing the quality of life of the poor). It focused mainly on access in the health and water sectors, and on access and quality in education. The main vehicle of support was a series of six Poverty Reduction Support Credits (PRSCs), which emphasized service deli- very. It included defined targets for immunization and trained staff in health, pupil resource ratios in education, and benchmarks for water supply (annex C). The PRSCs were sup- ported by investment operations in the context of the HIV/AIDS and capacity building in- terventions. World Bank assistance for human development was also undertaken within 37 CHAPTER 5 THE CHALLENGE OF HUMAN DEVELOPMENT the ongoing effort to strengthen local government capacity through decentralization. Streng- thening donor coordination at the sector level was also seen as a key component. The UJAS framework for human development builds on the PEAP and introduces addition- al focus on the quality of health and education and identifies high population growth as a risk to implementation, a risk that strategy partners are called to mitigate by encouraging the government to address political sensitivities around family planning. The results framework for UJAS is defined in a matrix largely taken from the PEAP, with well-defined targets (annex C). The World Bank’s specific support is focused on increasing primary net enrollment and completion rates, water supply and sanitation, the reduction of infant and maternal mortality rates, and the incidence of HIV/AIDS, malaria, and tuberculosis. The World Bank’s strategy for human development is substantially relevant for meeting Uganda’s development challenges and is closely aligned to government strategy as laid out in successive PEAPs and sector strategies. The strategy documents displayed selectivity within the relevant PEAP pillar by concentrating on primary health care and HIV/AIDS prevention and on primary and secondary education, leaving the lead in other areas to other development partners. The 2001 CAS results framework, which predated the results-based CAS requirement (in 2005), was adequate for monitoring country performance and was complemented by relevant expenditure tracking surveys. Although population growth was part of the PRSC discussions, some government officials felt that the approach adopted by the World Bank was not forceful enough. The 2001 Uganda CAE had highlighted the urgency for dealing with the issue in the previous CAS period: “The neglect of population and reproductive health issues in a country with a poor record of girls’ education and high rates of population growth, fertility, and maternal mor- tality is a striking gap.” Five years later, the UJAS notes that population growth constitutes a “risk to strategy implementation” and “poses a long-term challenge to growth and pover- ty reduction.” The World Bank’s approach during the period reviewed was understandably cautious because of the general lack of consensus among development partners on the issue. Assessment of the Relevance of AfDB’s Assistance Strategy. The human development strategy of the AfDB, like that of the World Bank, was formulated within the framework of the PEAP. The 2002 CSP shifted the AfDB’s focus from the provision of health and education in- frastructure to improving the quality of health and education services. This shift, promoted through reforms agreed in the PRSL, was considered important given the lack of progress on some of the social indicators. These reforms were also enacted to facilitate the implementation of: the health and education investment operations of the preceding CSP (1999–2001) (ii) sup- port the government’s first Support for the Health Sector Strategic Plan (SHSSP), and; (iii) support the Education Sector Investment Plan (Education II). In the water sector, the 2002 CSP set as an objective the improvement of access and equity in the provision of safe water and sanitation. Under the UJAS, AfDB assistance envisaged devoting close to half of its planned commitment to the human resource development pillar of the PEAP. This AfDB support was to enhance access to primary healthcare, quality post-primary education, and to safe water and sanitation. It was to be delivered through health and education investment projects and earmarked budget support for rural water supply and sanitation. 38 CHAPTER 5 THE CHALLENGE OF HUMAN DEVELOPMENT As in the case of the World Bank, AfDB’s strategy for human development is highly relevant to Uganda’s development challenges and is aligned to its strategic programs. A new health project was deliberately postponed in 2001 to make sure it met the government’s strategic ob- jectives for the sector. In education, the committed projects (investment and policy-based lending) were satisfactorily designed and aligned with the government’s strategies for the sec- tor. The CSP (2002-04) largely depended on the PEAP outcome targets and did not establish independent baseline and intermediate levels indicators. The AfDB’s aid delivery instruments were similar to those used by other development partners in the water sector, but in support- ing human development initiatives it demurred on the use of the SWAp and general budget support (GBS), which were the preferred instruments of the other development partners. Another weakness of the AfDB’s strategy was that it focused mainly on rehabilitation of infra- structure and access issues in earlier years, although strategic emphasis evolved toward quali- ty issues. Achievement of Objectives During fiscal years 2001-07, the World Bank committed an estimated $725 million (35 per- cent of total commitments) in investment operations and budget support (PRSCs) to aug- ment the government’s human development efforts. The AfDB committed an estimated UA98.4 million (excluding commitment for multisector operation, estimated at UA49.6 mil- lion) during fiscal years 2002-07. This constituted about 20 percent of total commitments during the period by the AfDB (or about 30 percent if all multisector operations are consi- dered human development assistance). AfDB’s commitments amounted to about 20-30 per- cent of World Bank support to the sector. The relative contribution of the two banks to the expected outcomes on the human development agenda should be seen in this light. The World Bank’s Assistance Program. IEG reviews of the first four PRSCs rated the out- comes of World Bank assistance satisfactory. The reviews also rated the outcomes mod- erately satisfactory for the first three PRSCs and moderately unsatisfactory for the fourth. In addition, several more comprehensive assessments and evaluations that looked at the achievements and limitations of budget support to Uganda in general and the PRSC instru- ment in particular also provided contrasting assessments.3 This review concurs with the findings of the earlier evaluations with respect to the role played by the PRSCs in World Bank support for human development. The evidence shows that general budget support operations (including PRSCs) contributed to a major expansion of basic service delivery at the subnational level in education, health, and water and sanitation. The expansion was largely pro-poor and equitable, but was offset by weak service quality and very limited impact on important outcome indicators. Howev- er, the PRSC had proven particularly beneficial for cross-cutting issues, one of the reasons for the considerable expansion of the PRSC’s policy action agenda. One oft-cited example from the education sector described how teacher recruitment and deployment, classroom construction and textbook publishing— all important elements of the education reforms led by the Ministry of Education and Sport— fall under the responsibility of three other minis- tries, making a PRSC policy action an important incentive for cooperation between the min- istries involved. 39 CHAPTER 5 THE CHALLENGE OF HUMAN DEVELOPMENT Although the use of the PRSC dominated the World Bank’s assistance for human develop- ment during the evaluation period, four investment projects in health and two in education were also instrumental. The District Health Services Project was by far the most important source of external financing for district health services in the country. Despite design flaws and failure to achieve many of its objectives, it contributed to more effective decentralization of the health sector and helped pave the way for a viable SWAp through strengthening poli- cy formulation and strategic sector management, as well as by successfully coordinating de- velopment partners. The Nutrition and Early Childhood Development Project yielded modest improvements in nutritional status and cognitive development in children, but had unclear outcomes for health status. The Sexually Transmitted Infections Project was the first free-standing HIV/AIDS project in Uganda. The project helped successfully decentralize the fight against HIV/AIDS, establish multisectoral interventions and civil society partner- ships, and build capacity in several relevant disciplines. It was followed by the Multi- Country HIV/AIDS Program.4 The outcome of the project was rated moderately unsatisfac- tory mainly because prevention objectives were not met (table 12). However, the project contributed to strengthening Uganda’s capacity to respond to the HIV/AIDS challenge at multiple levels. 40 CHAPTER 5 THE CHALLENGE OF HUMAN DEVELOPMENT Table 12: World Bank Project-Based Support for Human Development Institutional Development Bank Rating Project name Outcome Impact Sustainability Relevance Performance Source District Health Moderately Substantial Likely Substantial Unsatisfactory PPAR Services unsatisfactory Nutrition and Moderately Substantial Unlikely Substantial Unsatisfactory IEG Early Childhood unsatisfactory review Development Sexually Moderately Substantial Likely High Satisfactory PPAR Transmitted unsatisfactory Infections Multi-Country Moderately No rating; ID Risk to Substantial Moderately IEG HIV/AIDS unsatisfactory objective development satisfactory review Program Uganda substantially outcome rated achieved significant Education Sector Satisfactory Substantial Likely No separate Satisfactory PPAR Adjustment rating; Credit favorable review Primary Moderately Substantial Likely No separate Satisfactory PPAR Education and satisfactory rating; Teacher favorable Development review Makerere Satisfactory No rating; Risk to No separate Satisfactory IEG University favorable review development rating; review Training Pilot of ID aspects outcome rated favorable moderate review Source: Various World Bank: Implementation Completion Reports, IEG reviews, and PPARs. Notes: IEG= Independent Evaluation Group (World Bank); Multi-Country HIV/AIDS Program=African Multi-Country AIDS Program; PPAR=Project Performance Assessment Report. With respect to education, two projects that closed in fiscal year 2001 (Primary Education and Teacher Development and the Education Sector Adjustment Credit), were relevant as they paved the way for the PRSCs. The education project portfolio also included two inter- ventions with a focus on tertiary education. The Makerere University Training Pilot Project was a Learning and Innovation Loan, and its objective was to strengthen public service deli- very at local government levels by improving and restructuring relevant education and training services of higher education institutions. Despite some flaws in project design and weaknesses regarding timely evaluation of innovative mechanisms created under the project, this Learning and Innovation Loan was very successful in demonstrating the bene- fits of involving higher education institutions in creating knowledge on decentralization, and in providing civil servants with the necessary skills to improve local service delivery in a decentralized environment. AfDB’s Assistance Program. The AfDB’s support for human development also comprised four areas: health, education, water and sanitation, and gender. In this context, it paralleled the operations of the World Bank. The support for health was provided through the Sup- port to the Health Sector Strategic Plan (SHSSP, 2000). An AfDB internal evaluation (the 41 CHAPTER 5 THE CHALLENGE OF HUMAN DEVELOPMENT Project Completion Report, or PCR) rated the project outcome satisfactory, although this could refer only to the achievements of physical and training targets and their intermediate effects. The scarce outcome data presented in the PCR pointed to health outcome improve- ments (for example, fatality rates among children under five from anemia and malaria de- clined in the project district visited by the PCR team, and infant immunization coverage in- creased). This was limited by inadequate supply of staff and mental health drugs (especially for poor patients) and the late delivery of some equipment and furniture. None- theless, access to services for mental and primary health patients significantly increased. Also, utilization of the facilities provided under the project was strong and stakeholders in the Ministry of Health expressed satisfaction with the project to the CAE team. The succes- sor and ongoing project, SHSSP II (fiscal year 2006) continued support to expand access of the population to mental health services. It also aimed to improve reproductive health ser- vice delivery in order to reduce maternal mortality. AfDB support for education through the Strategic Investment Plan, Education II Project (2000) focused on improving access to quality primary education and reducing gender in- equality in secondary science education in rural communities. This project supported at the primary level, classroom construction, teacher and curriculum development, and textbook procurement, as well as the delivery of functional science laboratories and libraries to rural girls’ secondary schools.5 In addition, the PRSL (2001), which aimed at improving basic public services, supported education mainly through enhancement of capacity for primary education teaching, district management, and better distribution and utilization of text- books. The follow-up and ongoing support to the Education Strategic Investment Plan, Education III (2005), aimed at reducing imbalances in regional educational attainments by improving access to quality secondary education in remote communities. It also sought to contribute to enhancing access to relevant and effective business, technical, and vocational training and skills acquisition. The AfDB also provided support to advance gender equity and improve access to water and sanitation. The Rural Microfinance Support Project (1999) was the vehicle for this, followed bythe Poverty Alleviation Project (which closed in 1998 and successfully introduced rural banking services). The Rural Towns and Water Supply and Sanitation Study (2000) pro- vided the analytic basis for the Small Towns Water and Sanitation Projects of 2004 and 2005. Both projects are credited with helping exceed the CSP performance targets for protected springs, boreholes drilled, and new wells constructed. Overall, the performance of the AfDB’s project assistance was satisfactory—the project rat- ings reveal satisfactory outcome with substantial institutional development impact and like- ly sustainability (table 13). However, the performance for Education I and SHSSP I can only be considered as likely sustainable, as most of their outputs have yet to produce any sub- stantial effects. The overall performance of the education support from the PRSL was also rated satisfactory. A key success factor was the high commitment of the government to im- proving the policy environment and to ensuring the delivery of the funded outputs, as well as the high participation of the direct recipients of the project outputs. However, the effec- tiveness of the AfDB project assistance, as expressed in supervision mission reports between October 2000 and June 2007, suffered from delivery delays, inadequate counterpart funding, monitoring and reporting, and limited use of some of the deliveries. 42 CHAPTER 5 THE CHALLENGE OF HUMAN DEVELOPMENT Table 13: Ratings of AfDB-Supported Projects on Human Development Institutional Project development Bank Rating Project name outcome impact Sustainability Relevance performance source Support to the Health Satisfactory Substantial Likely Relevant Satisfactory PCR Sector Strategic Plan Review Health Services Satisfactory Substantial Likely Relevant Satisfactory PCR Rehabilitation Review Project Strengthening of Scientific Satisfactory Substantial Likely Relevant Unsatisfactory PCR and Technical Teacher Review Education Education II Satisfactory Substantial Likely Relevant Satisfactory Sector Review Source: OPEV PCR Review Note and Sector Review Notes: AfDB=African Development Bank; OPEV=Operations Evaluation Department of the African Development Bank; PCR=Project Completion Report. Assessment of Country Outcomes Assessment of Country Outcomes. Because the CAS and CSP were aligned to the PEAP, an assessment of overall country outcomes against the PEAP targets is necessary to understand the achievement of the subset of outcome targets supported by the World Bank and the AfDB. In general, during the period reviewed, access to basic services improved—more children are now going to school, more patients use health care centers, and more people use safe water sources and proper sanitation. This development is corroborated both by in- dicators as well as beneficiary surveys. In health, more staff are assigned to health facilities, and vaccination rates have increased considerably, thereby meeting the 2001 CAS/2002 CSP targets by 2003 (table 14). The increase in safe water and sanitation facilities, which is likely to lessen the burden of water-borne illnesses and diarrhea, is also important for health out- comes. In education (table 15), input-related indicators have improved and have largely met targets. In addition, learning outcomes show positive trends, indicating that the inputs are paying off. However, overall results in the health sector are disappointing. Drug shortages continue to be the norm, and staffing of health centers has stagnated at an insufficient level. More wor- risome still is the obvious lack of impact of health service expansion on key outcome indica- tors, in particular maternal mortality and associated factors, such as the total fertility rate and family planning uptake.6 The health system, in fact, seems only moderately improved over its status at the beginning of the evaluation period, with decreasing shares of the gov- ernment’s budget, increasing demand for medical services corresponding to increasing inci- dences of malaria, and signs that HIV infections may be on the rise again. Yet, findings from the most recent National Strategy for the Development of Statistics indicate increasing beneficiary satisfaction with health services, including quality. About two-thirds of the households surveyed reported that health services, particularly for immunization, had im- proved compared to 2000. However, lack of drugs in public health facilities is a common 43 CHAPTER 5 THE CHALLENGE OF HUMAN DEVELOPMENT complaint. The beneficiary survey data on quality are somewhat contradictory, but overall there is a sense of appreciation among beneficiaries for services provided that should not be underestimated. Table 14: Health Performance Indicators 2001-07 Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal year year year year year year year PEAP/UJAS/PRSC indicators 2001 2002 2003 2004 2005 2006 2007 Infant mortality rate 88 76 Maternal mortality rate 505 435 Outpatient department utilization rate (new attendance) 0.43 0.6 0.72 0.79 0.9 0.9 0.9 HIV prevalence rate (%) 6.1 6.5 6.2 6.4 Health facilities without stock-outs of tracer medicines/supplies (%) 40 42 53 35 27 35 Approved posts filled with trained health workers (%) 40 42 66 66 68 68 38* Deliveries in health units (%) 23 19 20 24 25 29 32 Couple years of protection (‘000) 211 212 234 310 357 DPT3/ pentavalent vaccine coverage, children <12 months (%) 48 63 84 83 89 89 90 Population with access to safe water (%) 55 60 Urban 85 87 Rural 51 56 Latrine coverage (%) 51 56 57 57 58 59 * Not comparable to previous figures, different methodology. Source: Ministry of Health, Uganda. Notes: DPT=diphtheria, pertussis, and tetanus vaccine; HIV=human immunodeficiency virus; PEAP= Poverty Eradication Action Plan; PRSC= Poverty Reduction Support Credit; UJAS=Uganda Joint Assistance Strategy. The results for education are mixed for both the World Bank and the AfDB with respect to the targets established in the CAS/CSP, but seem to point to the right direction. Learning outcomes are getting better and the sector is starting to implement a more comprehensive response to the quality challenge (table 15). Drop-out and repetition rates are high and completion rates decreasing. However, this may be an effect of the enormous wave of stu- dents who entered the system with the first few universal primary education cohorts (figure 4), especially after 1998. At the national level, the education sector seems to be capable of taking on the efficiency problems that are being identified in increasing detail. Beneficiaries feel empowered by universal primary education and value the education services that are increasingly provided. Quality reasons are rarely cited for dropping out of school—much more common are socioeconomic reasons, mainly the costs associated with going to school. 44 CHAPTER 5 THE CHALLENGE OF HUMAN DEVELOPMENT Table 15: Education Performance Indicators Fiscal Years: 2001–07 2001 2002 2003 2004 2005 2006 2007 PEAP/UJAS Indicators Primary net enrollment rate 87 85 87 89 93 92 92 Male 87 83 87 89 94 94 94 Female 86 86 89 92 90 90 Primary completion rate (%) 63 49 56 62 51 48 50 Male 71 59 66 72 54 55 Female 55 41 47 54 47 42 Secondary gross enrollment rate 13 20 20 17 19 34 Male 15 21 21 19 20 38 Female 12 18 18 15 17 30 Secondary completion rate to S4 (%) 21 22 18 25 Male 23 25 20 28 Female 19 19 17 22 Tertiary gross enrollment rate 2.7 3.0 3.0 3.4 Male 3.6 3.9 3.9 4.2 Female 1.9 2.1 2.1 2.6 PRSC Indicators Primary pupil/teacher ratio 58 56 56 54 52 48 52 Primary pupil/textbook ratio 2.5 3.0 1.6 1.8 1.8 Primary pupil/classroom ratio 98 94 94 85 79 77 72 Proficient in literacy P3 (%) 34 39 46 46 Male 33 37 44 44 Female 36 40 47 47 Proficient in literacy P6 (%) 21 30 34 50 Male 20 32 33 48 Female 20 28 34 51 Proficient in numeracy P3 (%) 43 45 43 45 Male 44 46 45 46 Female 42 44 40 43 Proficient in numeracy P6 (%) 21 33 31 41 Male 26 39 34 46 Female 15 27 27 37 Source: Ministry of Education, Uganda Note: PEAP= Poverty Eradication Action Plan; PRSC= Poverty Reduction Support Credit; UJAS= Uganda Joint Assistance Strategy. Note: P= primary school level; S= secondary school level. 45 CHAPTER 5 THE CHALLENGE OF HUMAN DEVELOPMENT Figure 4: Survival Rates for All Primary Schools (percentage) 100 90 Male Survival rate (percentage) 80 70 60 50 Female 40 30 20 10 0 1993-99 1994-00 1995-01 1996-02 1997-03 1998-04 1999-05 2000-06 Period Source: Ministry of Education, Uganda. Note: Survival rate is an educational concept referring to the percentage of students at the beginning of the grade who reach the final grade. With respect to water and sanitation, the World Bank CASCR concluded that, with support from the Small Towns Water project of the AfDB and the PRSCs, all CAS performance targets (protected springs, boreholes drilled, and new wells constructed) were exceeded. Both rural and urban access to safe water showed major improvement, on track to exceed the corre- sponding Millennium Development Goal (MDG) target. On the other hand, the CASCR noted that a lack of progress in sanitation provision and hygiene mitigation had important negative effects on achievement of the MDGs in the area of infant, child, and maternal mortal- ity. World Bank’s Contribution. The World Bank’s contribution to the achievements in the so- cial sectors was substantial (Table 16). The World Bank was the largest donor to Uganda over the evaluation period and had substantial staff capacity on the ground. Its PRSC in- strument was at the center of budget support operations, defining the framework for all budget support donors. With government budget allocations to the main social sectors rela- tively stable, World Bank aid helped pay for the considerable expansion of pro-poor service delivery and thus directly contributed to increased access to basic services as well as to ob- served improvements in some aspects of service quality in health, education, and water supply and sanitation. The link is particularly strong in education for two reasons. First, funding came largely out of the government’s budget, with very little project-based aid. Second, education was the largest recipient of the government’s budget over much of the period under review. In addition, the World Bank was important in influencing education policy via analytical and advisory services. 46 CHAPTER 5 THE CHALLENGE OF HUMAN DEVELOPMENT Table 16: World Bank Support to the Human Development Agenda Country Expected Outcome Actual Outcome Contribution Assistance Strategy Pillar Improved Immunization ratios Despite improved access and citizens’ satisfaction Support was provided through health care (DPT3) to increase to with public health service delivery, outcomes the HIV/AIDS SIL, the PRSC services 80% by 2002/03 remain unsatisfactory for family planning and 1-6 and economic and sector reproductive health, The effectiveness of PRSC as work such as the Health Increased instrument for dealing with specific health sector Expenditure tracking (fiscal percentage of health issues is declining. year 2002), Health Sector centers with trained Performance (fiscal year staff to 65% by 2004), and Health System 2002/03 Support (fiscal year 2007). Primary Pupil/teacher ratio of Support has yielded: equitable coverage, The PRSC 1-6 led the way, education 47 by 2002/03 especially for girls; provided institutional supplemented by the Pupil/class ratio of 87 strengthening by meeting output targets Makerere Decentralization by 2002/03 established in the PEAP; and (through PRSCs) Service Project (fiscal year sustained resource flow to sector. Support was 2002), and economic and Pupil/book ratio of 3 unable to deal with inefficiency issues and sector work on Post-Primary by 2002/03 concerns with Uganda’s attainment of MDG2. (fiscal year 2003) and Tertiary (fiscal year 2004) Education. Water and Boreholes drilled: Support through the PRSCs to local governments The PRSC 1-6 and the sanitation 1,500 by 2002/03 helped exceed all CAS performance targets Uganda Social Action Fund (protected springs, boreholes drilled, and new wells support investment in this Protected springs: constructed). Both rural and urban access to safe sector supplemented 700 by 2002/03 water showed major improvement, on track to economic and sector work on exceed the corresponding MDG target. There was Urban Water (fiscal year limited progress in sanitation provision and hygiene 2001) and Water Supply Protected wells: mitigation, with potential negative effects on the Delivery Impact Assessment 1,700 by 2002/03 achievement of MDGs for infant, child, and (fiscal year 2005). maternal mortality. Sources: Annexes C and D. Notes: CAS=Country Assistance Strategy; DPT=diphtheria, pertussis, and tetanus vaccine; HIV/AIDs=human immunodeficiency vi- rus/acquired immune deficiency syndrome; MDG= Millennium Development Goal; PRSC=Poverty Reduction Support Credit. World Bank funding was also crucial in advancing effective decentralization of the sectors. Conditional grants for the service delivery sectors out of the government’s budget financed much of the sector strategy implementation on the subnational level and the World Bank’s unconditional grants under the LGDP II constituted the only sizeable funding many dis- tricts received for discretionary spending. Some World Bank contributions to observed out- comes predate the interventions of recent years. Without the PEAP process and resulting sector strategies and SWAps, it was unlikely that service expansion of the magnitude ob- served in Uganda could have been possible. The World Bank’s role in developing this framework was considerable and institutional strengthening, mainly by working with and through local systems, continues to be one of the stronger points of World Bank assistance. However, there is a caveat that tends to come up in assessments of the impact of general budget support, which probes the counterfactual for the social sectors: Would the expansion in the social sectors not have happened without the support of the World Bank and other donors? It appears that generous donor fund support has: (i) made it possible for the gov- 47 CHAPTER 5 THE CHALLENGE OF HUMAN DEVELOPMENT ernment to delay reforms of domestic revenue mobilization; (ii) worked as a disincentive to increasing efficiency in service delivery; and (iii) enabled the government to afford costly policy measures introduced before adequate analytic work has been undertaken. Converse- ly, this would imply that less donor funding need not necessarily have meant less progress on sector strategy implementation. The conclusion is not clear. Based on this, the outcome of World Bank assistance for education is rated moderately sa- tisfactory. Attention to gender aspects is satisfactory overall. The rating for education is mainly determined on the positive side by: (i) the further expansion of the education system that brought children from poor backgrounds and girls into school who would otherwise not have had a chance to get any education at all; (ii) the observed strengthening of the qual- ity aspects of education, and recent acceleration that has led to emerging positive trends in some outcome indicators; (iii) the fact that expectations of quality in education have to factor in systemic performance issues associated with schooling large numbers of underprivileged and undernourished children; (iv) the institutional strengthening that has enabled the sector to further streamline its processes and increase its ability to analyze and respond to major challenges; and (v) Ugandan’s expressed satisfaction with universal primary education de- spite system shortcomings. On the negative side the rating is affected by flattening or even decreasing net enrollment rates in primary education over the past few years; and persis- tence of inefficiency issues and concerns with the attainment of MDG. Although it is still involved in sector dialogue and planning processes, the World Bank is not among the most active players in health. Within the Ministry of Health, the World Bank is most appreciated for financing consultants for brief assignments and on short notice. This concurs with development partners’ recent impression that the World Bank has been less ac- tive in the sector working groups7 and should have led a more committed and regular tech- nical dialogue with the health sector, and with analytical work, which has been limited. The World Bank presence and advocacy in the HIV/AIDS segment is said to have waned once it was no longer linked to a project. Given the World Bank’s long-standing prevention- focused support—a sharp contrast with the treatment-centered agenda of the global health institutions and the US government initiative, President’s Emergency Plan for AIDS Relief’s ideology-driven neglect of condoms as a major element of prevention strategies—its per- ceived retreat from the dialogue is seen as detrimental to achieving a sensible balance of in- vestments in the segment. On the positive side, the World Bank continues to strengthen its domestic HIV/AIDS initiative. Through the World Bank-associated Aids Strategy and Ac- tion Plan, it supported the peer reviewing process for the National Strategic Plan on HIV/AIDS and funded consultants to help the Uganda AIDS Commission develop an an- nual action plan for strategy implementation. The outcome of World Bank assistance to the health sector is rated moderately unsatisfactory because of: (i) unsatisfactory outcomes on family planning and reproductive health issues as well as the health MDGs and corresponding PEAP indicators; and (ii) the presence of major in- efficiencies in health service delivery and decreasing scope for effectiveness of the budget sup- port instrument in the sector. On the positive side, there has been increased access and utiliza- tion, and citizen satisfaction with public health service delivery has increased. 48 CHAPTER 5 THE CHALLENGE OF HUMAN DEVELOPMENT AfDB’s Contribution. AfDB’s contribution to Uganda’s health sector was modest due largely to the modest scale of assistance and its narrow focus on project activities (table 17). Apart from the support provided through the PRSL, the AfDB’s interventions were limited to mental and maternal healthcare in a few districts. AfDB project-generated data on out- comes were patchy, and there were no national-level indicators that measure the outcome of mental health services provision, one of the main areas of focus of the SHSSP. According to the most recent Annual Health Sector Performance Reports, most regional referral hospitals are still only partially functional in mental health services, with no psychiatrist on staff. At the lower levels, psychiatric nurses remain in short supply, too. The drug situation is par- ticularly critical—demand for a mental health service is increasing but drug shortages in this segment were the norm. The trends seem to be moderately positive both with regard to re- cruitment of mental health staff and drug availability, but the segment repeatedly missed annual targets and the 2006/07 Annual Health Sector Performance Report lists gross under- funding of mental health medicines as a major challenge. In conclusion, AfDB project activi- ties have contributed to increasing health service infrastructure and access to services in mental health, but the realization of the full potential contribution of AfDB’s mental health- care interventions remained limited. 49 CHAPTER 5 THE CHALLENGE OF HUMAN DEVELOPMENT Table 17: AfDB Support to the Human Development Agenda Country Strategy Expected Outcome Actual Outcome Contribution Paper Pillar Health: Improve 54% of children less than 1 Access to mental health and maternal The Support to Health Sect efficiency and year old have received health services increased, but access to Strategic Plan (2000) was t effectiveness of existing DPT3 vaccination mental health services continued to be main vehicle for support. It health care delivery Outpatient department severely limited by shortages of staff and was followed by the ongoin systems utilization per capita of 0.47 drugs. Support for Health Sector Strategic Plan (2006). The HIV prevalence reduced to PRSL also supported the 5.4% health sector. Education: Improve Pupil-teacher ratio 45:1 Gender inequality in accessing science Education II (2000) was the access to quality education in rural communities main vehicle of assistance; primary education; Pupil-textbook ratio 3:1 decreased. Improvements in the quality PRSL provided improve access for girls of education were limited by the slow complementary support. into secondary science Pupil-classroom ratio 89:1 pace of delivery of support and high education in rural areas demand for education. The education P7 net enrollment 20% sector continued to be characterized by high drop-out rates and low transition rate from primary to post-secondary education Water and sanitation: Increased access to safe Support from the Small Towns Water The Rural Towns Water Increase access to WSS from 52% to 60% project helped exceed all CSP Supply and Sanitation Stud water and sanitation in performance targets (protected springs, (2000) small towns boreholes drilled, and new wells underpinned the two Small 80% WSS systems constructed). Both rural and urban Towns Water and Sanitatio functioning access to safe water showed major projects (2004 and 2005) th improvement, on track to exceed the served as main vehicles Increased access to safe corresponding MDG target. Relative complementing similar sup urban WSS from 50% to neglect of sanitation provision and by the World Bank and othe 65%. hygiene mitigation could have potential bilateral agencies in the loc negative effects on achievement of government areas. MDGs for infant, child, and maternal mortality. Source: Annexes C and D. Notes: AfDB=African Development Bank; DPT=diphtheria, pertussis, and tetanus vaccine; HIV=human immunodeficiency virus; MDG=Millennium Development Goal; PRSL=Poverty Reduction Support Loan; WSS=water supply and sanitation. Note: P= primary school level. The AfDB’s assistance made substantial contributions to the education outcomes during the review period, although it is largely oriented toward infrastructure and capacity building. AfDB assistance accounted for more than 5 percent of the external funding of the education sector and covered all districts in the country. Of the 8,887 new primary schools built na- tionwide between 2004 and 2007, the AfDB’s assistance accounted for 18.3 percent (1,629 schools), which created classroom space for 117,288 primary pupils. The assistance also created in secondary schools 6,480 student laboratory spaces and 1,621 student library spac- es for girls. It also assisted in enhancing school productivity by supporting capacity build- ing and school curriculum development and diversification. It trained teachers and equipped schools with appropriate equipment and materials. In addition, it introduced and facilitated agricultural education and skills development in the school curriculum. The AfDB’s interventions in water and sanitation have permitted the rehabilitation and con- struction of water supply and sanitation systems in small towns and rural areas. Although 50 CHAPTER 5 THE CHALLENGE OF HUMAN DEVELOPMENT performance was generally satisfactory, the results have revealed a need to pay more atten- tion to disadvantaged beneficiaries, especially the rural poor and women. Part of AfDB’s assistance was channelled to the Integrated Agriculture and Water Shed Management Pro- gram, which supported the PMA. Its components included: the development of cost- effective and market-driven, small-scale irrigation and water harvesting schemes; soil man- agement; arid lands development; marketing and agro-processing and complementary in- frastructure such as rural electrification and farm access roads; and institutional and capac- ity building at the farmer, district, and central government levels. The AfDB’s country office in Uganda has played a supporting role in country dialogue, but the absence of social sector specialists was a major limitation. Meetings relevant to the health sector were attended by a macroeconomist who covers several other sectors as well, and was not likely to be able to add much in terms of technical expertise or strategic advice to the sector dialogue. The AfDB was not represented in the sector’s thematic working groups. Health reviews were only occasionally attended by a specialist from Tunis, which again limited AfDB’s scope for adding value to the review process. The review concludes that the outcome of AfDB’s assistance in education and health is mod- erately satisfactory, and the outcome for water and sanitation is satisfactory. The low out- come rating for education and health is attributed to the failure of the support to effectively address the quality constraint and delivery inefficiencies. The assistance to both sectors was largely oriented toward infrastructure and capacity building, with only a partial focus on quality issues. The education system in Uganda still has high drop-out rates and a low tran- sition rate from primary to post-secondary education. This will threaten the relevance of education for the next few decades in an environment where the greatest shortage is in skilled labor at all levels. The AfDB’s focus in health was narrow, limited to a few districts, essentially contributing to increase access to mental and maternal health service, which was limited by shortages of staffing and drugs. Although of increasing importance, mental health was still considered relatively less critical in allocating scarce national budgetary re- sources. Also, the delivery of the AfDB’s assistance to health and education was subjected to delays in project execution. With respect to water and sanitation, AfDB’s interventions facilitated the rehabilitation and construction of water supply and sanitation systems in small towns and rural areas with generally satisfactory outcomes. Conclusion The outcome of World Bank and AfDB assistance for human development is moderately sa- tisfactory overall for both institutions. The support each bank provided contributed to the improved access and equitable coverage in health, education, and water supply and sanita- tion. Regarding the World Bank, the key concerns were the quality of service and the weak role played by the PRSCs as the instrument for delivery. Similarly, the effectiveness of the AfDB’s assistance, largely oriented toward infrastructure and capacity building, was limited by delivery deficiencies and the partial focus on quality issues. For both institutions, the failure to advance the dialogue on the crucial issue of population was a major omission. Driven by a total fertility rate of about 6.7 births per woman, among the highest in the world and well above the sub-Saharan African average of 5.5 (UNDP 51 CHAPTER 5 THE CHALLENGE OF HUMAN DEVELOPMENT 2007/08),8 Uganda’s population growth poses one of the highest constraints to its poverty reduction efforts. The country’s annual population growth stood at 3.6 percent in 2006 ac- cording to World Bank data, up from 3.1 percent in 2000. Even assuming a significant de- cline in total fertility rate over time, Uganda’s population would roughly double in size every 20 years. Since 2000, the population has grown by more than 5 million. There is con- siderable risk that population pressures will prevent further improvements in development indicators, undercut achievement of most of the MDGs, and jeopardize present levels of service provision. Population pressures may also inhibit growth, increase inequality, and foster social instability and conflict (World Bank 2006). The World Bank’s Strategic Gender Assessment identifies persistent gender inequalities in education, employment, earnings, and bargaining power at the household level as factors closely linked to the exceptionally high fertility. 52 Chapter 6 Evaluation of IFC Activities Background Uganda has a variety of attributes that offer good economic growth potential for private sector development: favorable conditions for a broad range of agricultural production, attractive tourist destinations, valuable mineral deposits, hydropower potential, untapped oil and gas reserves, and an educated labor force. Uganda is also close to rapidly growing East African markets, has favorable access to European and U.S. markets, and is a member of the Common Market of Eastern and African States, a market comprising 380 million people. Recent reforms have been consolidated, and the country’s reform program has advanced over the past dec- ade, during which time it has seen sustained private sector-led growth. Uganda is currently ranked the third freest economy in sub-Saharan Africa after Botswana and Mauritius by the Heritage Index of Economic Freedom. However, several obstacles, particularly the lack of infrastructure, continue to constrain pri- vate sector activity. Inadequate transport and energy infrastructure, in particular, remain a major obstacle to doing business and add significant costs. In transport, for example, the main route from Uganda to a port is through Kenya to Mombasa. However, though it costs $600 to transport a 40-foot container by rail from Nairobi to Mombasa, it costs $3,900 to transport one from Kampala to Mombasa. Road transport linking Uganda’s rural areas and centers of tourism with Kampala is also limited. In energy, commercial tariffs are among the highest in the world and nearly double those in Kenya. Electricity distribution infra- structure outside Kampala is minimal and only 5 percent of the population has access to electricity. In the banking sector, high collateral requirements, short lending terms, and li- mited reach in rural areas inhibit access to finance. Complex land ownership laws and an inadequate land registration system undermine property development and access to credit, particularly for women entrepreneurs. IFC Objectives The IFC’s objectives in Uganda between fiscal years 1999–2008 (as reflected in the 1997 joint World Bank-IFC Country Assistance Strategy (CAS), the fiscal year 2001 joint World Bank- IFC CAS, IFC’s fiscal year 2003 Strategic Initiative for Africa, and the fiscal year 2005 UJAS) were:  Infrastructure Development: Making a major contribution in enabling and financ- ing private sector infrastructure, including power generation, telecommunications, and rural electrification; and supporting privatization. 53 CHAPTER 6 EVALUATION OF IFC ACTIVITIES  Financial Sector Development: Stimulating diversified and strong financial sector development.  SME Growth: Supporting SMEs through additional financial support and through SME capacity building and technical support.  Agribusiness: Supporting commercial agriculture and agribusiness.  Social Sectors: Supporting private provision of education and health services.  Business Regulatory Environment: Reducing investment-related bureaucracy and improving investment regulations and promotion. Relevance of Objectives. The IFC’s objectives were appropriate to country conditions, al- though more detailed strategies should have been developed in some sectors. The objec- tives were appropriate for three reasons. First, by 2000, Uganda had made significant progress in establishing a positive environment for private investment and a range of new opportunities were opening up. Second, the government had displayed strong commitment to privatization and attraction of private investors, including in major infrastructure sectors. Third, despite sound progress, Uganda remained a high-risk, frontier country, with broad development needs. The emphasis on infrastructure was particularly relevant. Although reforms implemented over the past decade have addressed a range of constraints to doing business, poor infra- structure remains a major impediment to private sector activity. Throughout the period, IFC’s areas of focus were fully aligned with government priorities and with the assistance strategies of the World Bank and other development partners. However, the IFC would have benefited from much more considered strategies as to how it proposed to support some of these areas. For example, although supporting agribusiness was identified as an objective, none of IFC’s strategic documents provided any insight as to how the IFC pro- posed to achieve this objective. Given the importance of better engaging the large propor- tion of the population engaged in agriculture in the growth process, vulnerability of the sec- tor to weather and disease risks, market access constraints, and the predominance of small enterprises in the sector, a much more detailed and thought-out strategy to support agribu- siness was warranted. Achievement of IFC’s Objectives and Assessment of Outcomes Investment Operations. Between fiscal years 1999–2008, the IFC invested $178 million in 10 projects mostly in infrastructure (86 percent) and the financial sector (12 percent; see an- nex table 12-1). The investment program was dominated by the $130 million loan to sup- port construction of the 250 MW Bujagali hydropower project. Development of the project commenced in the mid-1990s, but was dropped in 2003 when the first major sponsor with- drew from the project. The second development phase was successfully concluded in 2006, and construction of the project began in 2007. The project is one of the largest private sector financings in sub-Saharan Africa and involved the support of numerous financial institu- tions, including the World Bank. The IFC also made two loans to Celtel Uganda, the second-largest mobile operator in the country, to help expand its network. In the financial sector, four loans were made: two to the Development Finance Company of Uganda Limited (DFCU ) to support leasing, mort- 54 CHAPTER 6 EVALUATION OF IFC ACTIVITIES gage, SME development, and women entrepreneurs; a trade finance guarantee of $2.4 mil- lion to Orient Bank; and a $1 million guarantee to support local currency borrowing by a microfinance institution. In addition, three small investments were made in SMEs through the Africa Enterprise Fund (AEF; see figure 5). Two of the investments were in agribusi- ness, supporting cotton and fish processing plants, and one was in the education sector, supporting a private primary school. The IFC also invested in three regional initiatives: an investment with the concession operator of the Uganda-Kenya railroad, a corporate loan to Celtel under which Celtel Uganda received a $20 million A-loan and a $11.5 million syndi- cated loan, and a $10 million equity to Coca Cola Sabco (Pty) Limited to expand and mod- ernize operations in four African countries, including Uganda. Figure 5: Investments by Sector, Fiscal Figure 6: Investments by Year, Fiscal Years 1999– Years1999–2008 2008 200 Investment (US$ million) 160 200 150 Investment (US$ million) 155 150 100 100 50 1 6 0.4 0 0 0 11 0 0 50 21 0 3 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 0 Infrastructure Finance AEF No. 3 4 3 Source: IFC Records. Notes: AEF= Africa Enterprise Fund. IFC’s new investments in Uganda were lower than in comparable countries: $6.7 per capita during the review period, compared with $7.5 per capita average in sub-Saharan Africa, and $8.6 per capita in Kenya $, and $11.0 per capita Ghana $. However, if the large Bujagali project is excluded, IFC’s investment in Uganda drops to just $1.7 per capita. In proportion to GDP in the region, IFC’s investments in Uganda were high. Although Uganda’s GDP represents 1.6 percent of sub-Saharan Africa’s GDP, IFC investments in Uganda comprised 3.9 percent of its sub-Saharan African investments. Investments in Uganda have been vola- tile, with, for example, IFC investment being realized in just two of the last seven years (fig- ure 6). During the 10-year evaluation period, the IFC shifted to larger investment projects: the average project size increased from $2.2 million in fiscal years 1988-98 to $17 million in fiscal years 1999-2008 (or $4.8 million, excluding the Bujagali project). 55 CHAPTER 6 EVALUATION OF IFC ACTIVITIES Table 18: New Investments in Uganda Benchmarked against Comparator Countries, Fiscal Years 1999–2008 Fiscal Years 1999–2008 Share of IFC IFC investments Advisory Services investments/FDI (%) ($ per capita) ($ per capita) Ghana 13 11.0 0.60 Kenya 63 8.6 0.77 Tanzania 2 2.5 0.19 Uganda 8 6.7 0.21 Sub-Saharan Africa (excluding Uganda) 4 7.5 na Note: Sub-Saharan Africa includes 28 countries with available data. Note: FDI= foreign direct investment; IFC=International Finance Corporation. IFC held the second-largest share among six development finance institutions in Uganda’s private sector. The IFC’s market share is approximately 24 percent, only below the Euro- pean Investment Bank (EIB) with 33 percent (figure 7). During the 10-year evaluation pe- riod these institutions invested a total of $783 million, and concentrated in infrastructure and finance. Investments in infrastructure were mainly focused on energy, mobile tele- communications, and railways; investments in the financial sector were concentrated on loans to commercial banks and microfinance institutions (figure 8). Figure 7: Development Finance Figure 8: Development Finance Institutions’ by Sector Institutions’ by Market Share KFW/DEG 7% FMO FMO Education 9% Proparco EIB Agriculture EIB 33% AFDB Proparco Private funds KFW/DEG 12% IFC Finance Infrastructure AFDP 15% IFC 0 100 200 300 400 500 600 700 24% US $million Notes: AfDB= African Development Bank; DFI=development finance institutions; EIB= European Investment Bank; FMO= Develop- ment Finance Company of the Netherlands; IEG= Independent Evaluation Group; IFC=International Finance Corporation; KfW/DEG= German Reconstruction Credit Institute/German Investment Corporation; Proparco= French Investment and Promotion Company for Economic Cooperation. Source: IEG-IFC. IFC’s active portfolio of investments over the past decade became more concentrated in loans rather than equity, and in large infrastructure and financial sector projects. In addi- tion to the 10 new investments, 19 other investments were under supervision during the evaluation period, representing commitments of $49.6 million. These projects were concen- 56 CHAPTER 6 EVALUATION OF IFC ACTIVITIES trated in extractive industries (39 percent) and agribusiness (25 percent). Over the past dec- ade, IFC’s portfolio in Uganda grew from its eighth largest exposure in sub-Saharan Africa in 1999 to its fifth largest in 2008. During the evaluation period, the IFC exited from five eq- uity investments and did not make any new ones. As a result, of its total active portfolio of $228 million at the end of fiscal year 2008, only 3 percent comprised equity investments, compared to 14 percent in Tanzania and 8 percent in Kenya. In sector terms, the IFC moved from a fairly diversified portfolio comprising oil, gas and mining, food and beverages, agri- culture, and manufacturing to a more concentrated portfolio in utilities and finance. Advisory Services Operations. The IFC advisory services focused on infrastructure and access to finance. Between fiscal years 1999–2008, the IFC approved 16 Adivsory Services operations in Uganda for a total donor funding cost of $6.4 million (annex table 12-4). In terms of business line, activities were predominantly in infrastructure (52 percent) and access to finance (33 percent), with advisory services in business-enabling environment and value addition to firms accounting for 4 percent of approvals. The IFC’s volume of advisory services operations in Uganda was relatively lower than other countries in the region: be- tween fiscal years 2005–008, total IFC advisory services funding in Uganda was $0.2 per ca- pita compared to $0.8 in Kenya and $0.6 in Ghana. Advisory services in infrastructure supported privatization, large infrastructure investment projects, and rural access to electricity and communications. The IFC undertook substantial Advisory Services in the power sector, including advising the government on sector reform and supporting the technical, economic, environmental, and social appraisal of both phases of the Bujagali project. The IFC also cofinanced an assessment of the feasibility of attracting private capital flows into the rural electricity sector in fiscal year 2001 that contributed to policy reforms and to various initiatives to attract private investment in the sector. An initi- ative to advise the Rural Electrification Agency on piloting public-private partnerships in rural electrification was also recently approved. A further advisory service project helped adapt and replicate the Bangladesh Village Phone Program in Uganda to increase rural access to telephone services. With regard to support of the private concession of the Kenya- Uganda railroad, a program was developed to motivate retrenched workers to use their compensation for new business opportunities, create income-generating opportunities along the railway track, promote small and medium-scale enterprise linkages, develop HIV-AIDS programs, and promote gender opportunities. However, this initiative has been put on hold due to uncertainties with the future of the concession. In the financial sector, IFC advisory services supported SME growth, access to finance for women entrepreneurs, and mortgage finance. The IFC initiated several programs aimed at increasing access to finance for local SMEs: training for mobile phone dealers to help them reorganize their businesses from a cash to a credit basis (that has provided training for 97 SMEs and financial support for 17 SMEs); a program to provide training and financing for potential SME bidders in private water operations; and an SME growth initiative under which 25 SMEs received training and two received financing (however, the performance of the SME beneficiaries have performed below expectations). In fiscal year 2007, the IFC sup- ported an initiative to promote access to finance for woman entrepreneurs. To date, over 50 woman entrepreneurs have received loans and training in bookkeeping and marketing and several firms are performing exceptionally well. However, inadequate monitoring and 57 CHAPTER 6 EVALUATION OF IFC ACTIVITIES evaluation of the program inhibits an assessment of its impact and attribution of success of the firms to the IFC-financed initiative. Also in fiscal year 2007, a primary mortgage market initiative was established to help address policy and regulatory constraints to mortgage lending as well as to strengthen institutional processes and procedures in mortgage lending in local banks. The program is linked to a partial credit guarantee provided by the IFC for these banks to access lines of credit from the National Social Security Fund. As discussed below, however, the partial credit guarantee has not yet been used by any of the participat- ing banks, and only one bank has received training. Several initiatives were undertaken to improve the business enabling environment. The Foreign Investment Advisory Service completed an administrative barriers study in fiscal year 2004 and a gender and growth assessment in fiscal year 2005. The gender and growth assessment study found that although women in Uganda contribute 50 percent of GDP and represent 39 percent of businesses with registered premises, they receive only 9 percent of credit. The report suggested that Uganda could gain as much as 2 percentage points of GDP growth a year by eliminating gender inequality. The study led to the Gender Entrepreneur- ship Initiative. In fiscal year 2007, the IFC supported the launch of the Uganda Investment Authority’s Investor Outreach Program that encourages foreign direct investment to sup- port expansion of exports to regional and broader global markets. To date, the program has led to the elimination/ streamlining of five foreign investment procedures, although it has suffered from a range of managerial and organizational issues that have undermined effec- tiveness. Investment Outcomes. Investment outcomes of the IFC’s portfolio in Uganda were on par with IFC-wide results, although profitability was lower. Fifty-nine percent of the 22 mature projects had satisfactory or better investment outcomes, compared to 60 percent IFC-wide and 58.8 percent in sub-Saharan Africa excluding Uganda (figure 9). However, profitability in Uganda was lower than in the rest of sub-Saharan Africa and IFC-wide: projects regis- tered a year averaged a profitability rate of 5.1 percent, well below the 9.6 percent in sub- Saharan Africa, and 6.9 percent of IFC overall. The lower profitability in Uganda is mostly due to the failure of one large equity investment. The IFC’s 22 mature investments during the period reviewed registered an estimated gross profit contribution before corporate overhead of about $9.3 million and net result of approximately $3.5 million after overheads. 58 CHAPTER 6 EVALUATION OF IFC ACTIVITIES Figure 9: Investment Success Results Figure 10: Investment Success Results Comparison by Sector Cement & construction (5) 100 100 90 Tourism (1) 100 Percent of projects rated 80 100 satisfactory or better Infrastructure (2) 70 59.3 59.1 60 50.3 Finance (3) 67 50 40 Education (2) 50 30 Agribusiness (8) 25 20 10 Extractive (1) 0 0 IFC excl. Uganda Africa excl. 0 20 40 60 80 100 Uganda Uganda Percent of projects with high investment rating Note: Based on 668 matured investment operations active over Note: Based on 29 matured investment operations active over 1999-2008. 1999-2008. Source: IEG-IFC. Source: IEG-IFC. Positive investment outcomes were seen in infrastructure and finance, although less success was seen in agribusiness. The two evaluated investments in telecommunications performed satisfactorily. Following early operational difficulties, one telecommunications operator em- barked on a turnaround program, upgraded its network, and revitalized its brand name. As a result, its market share increased significantly. The IFC’s investments in the sector exceeded financial benchmarks of performance. Projects in the financial sector were generally successful. The IFC made an investment in Uganda’s first leasing company, which was subsequently acquired by a local bank. The project taught numerous lessons, including the importance of having committed technical partners (foreign and local) in underdeveloped markets to bring both funding and expertise. All five projects in cement and construction, mainly in the hotel business and commercial of- fice buildings, performed satisfactorily. Good sponsor and management expertise were the main drivers of positive results. However, six out of eight agribusiness-related projects per- formed unsatisfactorily. These weak outcomes were attributable to poor sponsor quality and corporate governance in addition to a range of sector-related constraints. The IFC’s Contribution to Private Sector Development Privatization and Private Investment Infrastructure. The IFC helped realize significant regulatory and institutional reforms in the power sector. The IFC was engaged in the power sector throughout the period reviewed through: (i) efforts to develop both phases of the Bu- jagali private power generation project as well as smaller hydropower projects; (ii) advice on regulatory and institutional reform in the power sector and privatization of the electricity distribution system; and (iii) efforts to expand rural access to electricity. Since 1999, signifi- cant changes have been made in Uganda’s power sector, with most of the institutional and regulatory reforms recommended by the IFC and the World Bank fully implemented. The 1999 Electricity Act established the basis for an enabling environment for private providers in the sector, including rural electrification. In 2000, an independent Electricity Regulatory 59 CHAPTER 6 EVALUATION OF IFC ACTIVITIES Authority was created and the state-owned power company was subsequently unbundled into separate transmission, distribution, and generation companies. In 2003, a private pow- er operator won a concession for the main public power generation plants, and in 2005, a commercial operator was awarded a concession to operate the main electricity distribution network. Despite these efforts, the desired results in the energy sector have yet to be seen: for example, just 5 percent of the population has access to electricity; losses through the distribution system remain high at over 35 percent; the cost of electricity in Uganda is significantly higher than other countries in the region; and the government continues to make substantial subsidies of some $50 million a year to the energy sector. The lack of increased access to affordable elec- tricity and reduction of system losses can be partly attributed to inadequate levels of power supply in Uganda. Total installed capacity is 360 MW (50 MW thermal and 310 MW hydro- power) and the 2005/06 drought reduced hydropower generation to about 265 MW. Mean- while, peak demand is estimated around 380 MW, resulting in a shortfall of up to 145 MW. To compensate for this, the government installed high-cost emergency thermal power capaci- ty that significantly raised the retail tariffs from less than 10 U.S. cents per kilowatt hour in 2004 to over 20 U.S. cents per kilowatt hour in 2008. The higher consumer prices that resulted raised the level of illegal consumption and system losses reverted back to levels that existed before the distribution concession. The output from Bujagali, when available in 2011, is likely to significantly reduce the demand-supply gap in the country. The IFC has also advised the government informally on the privatization of the electricity distribution system, which made Uganda the first African country with a private unbundled distribution company. There is some concern that the concession agreement between the government and the operator of the distribution company, which resulted in a private monopoly, could have better incorporated incentives to reduce system losses and expand access to the main grid. Efforts to mobilize private investments for rural electrification have seen limited success due in part to lack of public investment in distribution infrastructure outside the major urban areas. To address the lack of access to electricity, in 2002, the government established the Energy for Rural Transformation program, supported by both the World Bank and the IFC. The program sought to attract private investors to develop small hydroelectric power plants to supply power to either independent distribution networks or to the main grid. To date, despite the range of initiatives and sector reforms, private sector presence in rural electrifi- cation is minimal. Lack of public investment in distribution infrastructure outside the major urban area has been a constraint. One off-grid, public-private partnership project, that ge- nerates about 3.5 MW of power, has been implemented in the West Nile region. The IFC’s investments and advisory services helped restructure the telecommunications sec- tor and expand access to mobile communications. In 1994, the IFC invested in the first private company licensed to provide mobile telecommunications in Uganda. At the time, the tele- communications system in Uganda comprised some 23,000 fixed lines provided by the state telephone company. The IFC helped the sponsor structure the project and finance the initial build-up and subsequent expansion of the mobile network. Over the years, the company faced challenges, including an effective mass-market strategy from a new competitor in 1998 that sharply reduced its market share, as well as managerial difficulties, and significant in- vestment costs. The company eventually emerged as a well-managed and profitable opera- 60 CHAPTER 6 EVALUATION OF IFC ACTIVITIES tion, and has been a key player in expanding access to phone services in Uganda. Its sub- scriber base increased from 34,000 in 2001 to 1. 4 million in 2007 and it currently has about 35 percent of the mobile market. The IFC also played a significant advisory role in restructuring the sector. It was the lead ad- visor to the government on two transactions: Uganda Telecom Privatization and the sale of a Second National Operator’s license. The advisory contract was signed in 1995 and the finan- cial closing of the sale of the Uganda Telecom Privatization took place exactly five years later in 2000. Both transactions incurred significant IFC staff resources at a high cost. However, the work paid off given that, in the end, this sector has become the most promising in Uganda. In rural areas, the IFC helped adapt and replicate Bangladesh’s successful Village Phone Op- erators program that helped increased access to phone services in isolated communities by training and providing mobile telephone equipment to local retailers. Overall, Uganda’s mo- bile penetration has increased from 0.25 percent in 1999 to 9 percent in 2007. Although this is a significant improvement, the penetration remains relatively low compared to an average penetration rate of 28 percent in Africa, 10 percent in Kenya, and 16 percent in Tanzania. The lower penetration rate in Uganda in part reflects its low per capita income as well as a rela- tively high 30 percent government tax on mobile phone services. The award of two additional private mobile operator licenses in 2007 is making the market more competitive and is ex- pected to help increase penetration. Although the IFC helped achieve the private concession of the Kenya-Uganda railway, its con- tribution to private sector development has been below expectations. The IFC was engaged in this transaction since 1994 when the governments of Uganda and Kenya decided to have a joint concession. Since then, the IFC (the lead advisor to the Government of Kenya) and CANARAIL (Canadian railway engineering consulting company), the lead advisor to the Government of Uganda, worked jointly on the competitive bidding process for the concession of the Kenya-Uganda railroad. In 2005, two similar concessions were tendered in Kenya and Uganda and the winning bidder for both was Rift Valleys Railways, a South African-led con- sortium. Shortly after the concession was awarded, two partners of the consortium withdrew and, with some time pressure from the both governments to conclude the transaction, it was determined to proceed with the contract despite the changes in the sponsoring consortium. In the two years since the concession was awarded, the objective to reverse the significant de- terioration in the operation has not been achieved and evidence suggests that the performance of the railway has further deteriorated. Contributing factors include: (i) railway equipment was found to be worse than expected; (ii) financial difficulties of the sponsor; and (iii) damag- es to the line by protesters during the Kenyan elections. Since the first quarter of 2008, no con- cession fees due to the government have been paid. In an effort to support the turnaround of the operation, the IFC has encouraged the shareholders to bring in other partners with more capital and managerial resources. In August 2008, the shareholders appointed a new Chief Executive Officer and Chairman of the Board to lead the turnaround of the company. With increasing public pressure, both governments have expressed serious concerns about the fu- ture of the concession. Financial Sector Development. The IFC played a useful institution-building role and helped introduce new products in the financial sector. The IFC has been engaged in the financial sec- 61 CHAPTER 6 EVALUATION OF IFC ACTIVITIES tor in Uganda since 1984 through a series of investments in a privatized development finance corporation. Although DFCU has declined from being the largest financial institution in Uganda to the fourth largest, it has transformed from an unviable development finance com- pany into a diversified and profitable commercial bank and the leading provider of long-term finance. Through several investments, representation on the board of directors, and technical assistance, the IFC supported this transformation, emphasizing prudential financial manage- ment, expanding outreach to SMEs, developing staff skills, and introducing new financial products. The IFC contributions in the financial sector through the local bank include the: (i) pioneering of the leasing industry in Uganda, which, although still in its infancy, has grown more than tenfold since 2001 and now accounts for 5 percent of credit to the private sector; (ii) introduc- tion of a mortgage program; (iii) introduction of a trade finance program; and (iv) establish- ment of a pilot program targeting women’s access to finance that has catalyzed similar pro- grams in several other Ugandan banks. The IFC’s advisory services contributed to development of Uganda’s leasing legislation, which improved the leasing business climate. Overall, the financial sector has seen significant improvements over the past decade. Credit to the private sector has expanded from 5.6 per- cent of GDP in 1998 to 9.2 percent in 2007; the banking sector is well capitalized; and the pro- portion of nonperforming loans has been reduced from 10 percent in 2000 to 2 percent in 2006. However, the financial sector has yet to improve access by SMEs, and financial intermediation ratios remain low relative to Sub-Saharan Africa. Limited success was seen in increasing term lending for SMEs and in developing housing finance. Despite progress in the banking sector, access to long-term lending remains a con- straint to doing business. Even among the leading providers of long-term finance in Uganda, the term financing portfolio (of over 5 year loans) is limited to about 3-5 percent of total assets. To some extent, a potential mismatch between term assets and liabilities (6 percent of total lia- bilities are over 5 years) inhibits term lending. Longer term loans also represent a risk that is unwarranted from the bank’s perspective. High-yielding risk-free treasury bills remain an at- tractive use of funds and account for a significant portion of the total assets of leading finan- cial institutions. Financial services are concentrated in the capital city. DFCU, for example, has only limited reach outside Kampala, with just 10 branches (out of 187 bank branches in the country). Reform in the pension sector enabling the National Social Security Fund to invest locally is an important step in the direction of increasing bank access to long-term funding. However, the National Society Security Fund continues to finance mostly government projects. Following sustained efforts since 2002, the IFC developed a project in the mortgage sector in 2007. The partial credit guarantee provided support for loans of up to 12 years from the National Social Security Fund to three participating banks engaged in mortgage lending, but it has not been used by any of the banks. One bank has a significant low-cost deposit base and finds no rea- son to access the National Social Security Fund funds. The other two banks have found that interest on the National Social Security Fund loan plus the partial credit guarantee fee raises the costs of funds to levels that are uncompetitive in the current market. Overall, there con- tinues to be very limited availability of housing finance. The stock of housing finance in 62 CHAPTER 6 EVALUATION OF IFC ACTIVITIES Uganda is no more than 1 percent of GDP compared to 18 percent in Namibia and 20 percent in South Africa. The government estimates a total housing shortfall of some 1.9 million hous- ing units. Support for SMEs and Agribusiness. Although a range of direct small investments helped meet the demand for long-term finance among SMEs in the late 1990s, the IFC’s engagement in agribusiness after 2001 was minimal. During the decade, the IFC’s only active projects in agribusiness and manufacturing were investments made through the AEF. The AEF was established in 1988 to make direct investments in SMEs due to the failure of local financial markets in providing long-term funding for SME projects. Investments were made in agri- business, construction, tourism, and education that averaged $0.8 million. Of the 15 invest- ments made, only 3 were approved during the evaluation period. The failure rate of these projects was relatively high, although several succeeded and con- tinue to be viable businesses. For example, a fisheries company financed by AEF, had grown into a profitable operation producing 5,000 tons of export fish a year, employing 300 workers, and realizing an annual turnover of $11 million. A 2001 IEG evaluation of the AEF found that although half of the AEF-evaluated projects failed, 90 percent had positive de- velopment outcomes in terms of job creation, forward and backward linkages, skills trans- fer, and demonstration effects. Since the lapse in the use of the AEF, however, the IFC has been unable to make small investments that reach the manufacturing and service sectors. Within the World Bank Group approach to agriculture, the IFC’s intervention focused on supporting longer-term lending in the formal banking sector. As discussed above, however, progress in this area has been limited and the risk associated with long-term lending has in- hibited expansion of the banking sector into these areas. Overall, growth in agro-processing has been lacking and remains an important missing link between small farmers and mar- kets. To a large extent, therefore, the market failure that existed in 1988 and spurred the creation of the AEF continues to exist. The existence of this gap should not be an argument for resuscitating AEF, but rather for the continued need for the IFC to experiment with dif- ferent methods for reaching small enterprises given the long time needed to change bank- ing practices. Support for Private Provision of Education and Health Services. The IFC made an impor- tant early contribution to Uganda’s private education sector, which expanded rapidly in the 2000s and has attracted students from across the region. Although World Bank support was oriented toward institutional strengthening, the IFC’s focus was on the provision of infrastruc- ture in primary and secondary education. During this period, the IFC made two investments in private primary and secondary education through the AEF in 1997 and 2001. Similar to other AEF investments, these projects experienced some difficulties. However, following re- structuring and changes in ownership, both schools emerged as well managed and respected private secondary schools in the 2000s. Rainbow International School, for example, is current- ly one of the largest international schools in Uganda, with 700 students from all over the re- gion. The IFC’s role in appraising and financing the projects helped reduce perceptions of the private education sector as high risk, and had a demonstration effect that supported expan- sion of the sector. Overall the private primary and secondary sector has developed signifi- cantly and Uganda has established itself as a regional hub for secondary education. As of 63 CHAPTER 6 EVALUATION OF IFC ACTIVITIES 2006, the private sector owned about 47 percent of the 2,286 schools registered by the Ministry of Education. The number of secondary schools has increased from about 50 in 1999 to 250 in 2008, and student enrollment in private schools accounts for half of total school enrollment. IFC Additionality in Uganda The IFC’s identified additionality in Uganda has been mostly financial in nature. Financial additionality was identified in 85 percent of the projects (figure 11), which was comparable to IFC-wide (85 percent), and other Sub-Saharan Africa countries (83 percent). Within this type of additionality, better financial terms (79 percent) were the most frequently achieved, followed by enhancing investor confidence (57 percent; see figure 12). The provision of long-term finance was particularly critical to mitigate the risk in small projects with little or no private sector presence. By contrast, instances of operational and institutional additionality were identified in ap- proximately a third of the projects (33 percent operational and 30 percent institutional). The IFC provided operational additionality mostly through specialist assistance in new business development where it has expertise and competitive advantage over local sponsors (that is, trade finance, mortgage, leasing, and gender growth). Instances of institutional additionali- ty were focused on assisting companies to improve environmental and social standards, and assisting governments in improving laws and regulations in the insurance, leasing, mort- gage, and telecom sectors. However, the insurance leasing and mortgage sectors remain at incipient stages. Figure 11: Additionality in Uganda compared Figure 12: Types of Additionality in Uganda with Africa and IFC -Wide 100% 90% Uganda Financial: Funds mobilization 7% 80% IFC( Excl. Uganda) Institutional; Eficient public/private risk 70% 7% Africa (Excl. Uganda) allocation 60% 50% Institutional: New improved Regulations 11% 40% 30% Institutional: New/better standards 11% 20% 10% 0% Operational: Knowledge and Innovation 33% Financial Operational Institutional Financial: Market confidence 56% Financial: Better terms 78% 0% 20% 40% 60% 80% 100% Source: IEG-IFC. Source: IEG-IFC. Note: Based on 668 mature investment operations active over 1999-08. Note: Based on 29 matured investment operations active over 1999-08. 64 CHAPTER 6 EVALUATION OF IFC ACTIVITIES Box 4. Examples of Additionality Identified in Uganda’s Operations Financial Additionality  The IFC’s involvement allowed small, high-risk AEF-funded projects in agribusiness, construction, and education sectors to obtain long-term foreign currency financing at reasonable rates at a time when it was almost impossible to obtain financing in these sectors.  The IFC’s first private sector investment in the flower industry and education sector helped bring confidence to the market and encouraged other private sector institutions that would not have oth- erwise invested. Financial and Nonfinancial Additionalities  The IFC provided long-term and equity financing to mobile telecommunications services at a time when it was almost impossible to obtain financing. The IFC was also the first to renew financing under a new and untested telecommunications regulatory environment, providing comfort to the market. Within this new regulatory environment, the IFC used its leverage to improve the regula- tion of mobile licensing agreements.  The IFC’s advisory role, its relationship with the government, knowledge of the power sector in Uganda, and capacity for substantial investment placed it in a position to help structure the project; comfort investors; enhance economic, social, and environmental standards; and act as an honest broker between the government and the project sponsors. Assessment of IFC Performance The IFC had a positive overall experience in Uganda over the past decade, although efforts in some sectors were more modest than expected. As expressed in the IFC’s strategy in documents during the decade, the IFC played a substantial role in infrastructure develop- ment through advisory services and investments in the telecommunications, power, and transport sectors. Significant institutional and regulatory reforms took place in each of these sectors and, although results in some areas have yet to be seen, the prospects of attaining development objectives are significantly improved. In the financial sector, even though the IFC invested mainly in one long-standing client, it promoted largely underdeveloped areas that were critical to improving access to finance, such as leasing, mortgage finance, women’s access to finance, and SME growth. The IFC’s investments and advisory services in agribu- siness and education, although small and intermittent, have helped to create viable busi- nesses and catalyze export-oriented activities. The IFC’s positive experience in Uganda can be traced to several success factors. Among these are: strong government commitment to policy and institutional reform and to creating an environment conducive to private sector activity; sustained involvement in priority sec- tors such as energy, telecommunications, and financial services; close and well-established country relations (in part because some of the same staff have continued to work on Uganda for substantial periods). The IFC did well to persist with the complex Bujagali hydropower project. In retrospect, eventual financing of the project was critical to consolidating progress in the power sector. The IFC remained engaged and helped realize the project’s eventual financing, despite its 65 CHAPTER 6 EVALUATION OF IFC ACTIVITIES complexity, risk, and withdrawal of the initial project sponsor. The absence of the second phase of the Bujagali project would have meant increasing pressure to reverse institutional and regulatory reforms and a negative message of the effectiveness of power sector reforms across the region. However, given the early stage of the project, it remains unclear when the government’s subsidy of expensive thermal power generation will end. Although partnering with the IFC is seen to bring broad benefits, there is a good degree of frustration with slow and cumbersome procedures associated with the IFC. IEG interviews indicate that the IFC is perceived as providing high-quality advice. It is an enabler for diffi- cult transactions, and association with the IFC’s name can provide significant advantages. However, there is frustration among both client and government counterparts with the slow pace of project development, cumbersome procedures, and extensive documentation. In mortgage finance, for example, although initial discussions were begun in 2004, it was not until 2007 that a program was developed, in part due to reasons internal to IFC workings. Staff turnover has also caused gaps and delays in the development of projects, for example, as occurred with the IFC’s efforts to support rural electrification and develop mini- hydropower projects. A $1 million IFC partial credit guarantee to support a microfinance institution’s access to local currency finance took two years to prepare and the cost of the guarantee fee plus the loan spread made the funds very expensive for the sponsor and the facility has hardly been used. The sponsor, however, bore these costs in order to gain from the perceived benefits of being associated with the IFC. In another case, a client reported that the IFC’s processing requirements delayed the company’s expansion plans by 6 months. In the case of the IFC’s partial credit guarantee to the National Society Security Fund for on-lending to three banks, concerns were raised about the need for a guarantee document more than 150 pages long as well as lengthy legal reviews and processes. Lack of a local country manager since 2002 seems to have reduced the IFC’s effectiveness. In 2000, the IFC installed a country manager in Uganda mainly to develop AEF business. However, when the AEF was closed down, a strategic decision was made to move staff into the regional offices and the country manager was sent to Nairobi. At present, the IFC di- rects its business development and portfolio operations from Nairobi and its advisory ser- vices operations from Johannesburg, with some advisory services portfolio staff located in Nairobi. Other programs, such as gender initiatives and infrastructure investments, are managed from the IFC office in Washington. The IFC has been able to establish and maintain good relations with both clients and gov- ernment counterparts. According to staff, government, and client interviews, an IFC pres- ence on the ground had clear advantages. A Kampala-based country manager facilitated delivery of consistent messages, enabled the IFC to take the lead in several sectors, provided a convenient interface for clients, and enabled more timely IFC responses. Absence of a cen- tral country coordinator has also led to some confusion between linked investment and ad- visory services, such as with the mortgage finance initiative where multiple responsible staff from different parts of the IFC were at times unsure about the activities of the others. In one instance, teams from advisory and investment services working in the same sector unkno- wingly fielded missions at the same time, causing some confusion for clients. In other cases, observers point to missed opportunities due to a lack of a local presence. For example, al- 66 CHAPTER 6 EVALUATION OF IFC ACTIVITIES though there was some interest in engaging the IFC in an airport rehabilitation project, lack of a timely response may have precluded IFC involvement. Lessons  Reaching small businesses in frontier markets, such as Uganda, which has an inci- pient private sector and an underdeveloped financial system, remains a challenge. Financial intermediaries in Uganda are not effectively providing long-term lending to SMEs. Since the AEF program was scaled down, the IFC has been unsuccessful in reaching smaller, riskier projects. IEG’s 2001 evaluation of the AEF concluded that although the IFC should phase out its direct financing of SMEs in more developed markets, it should maintain its reach in less-developed frontier markets, such as Uganda. For the IFC, exploring new ways of reaching SMEs seems appropriate, par- ticularly when changes in the IFC’s business model, such as substantially higher funding for advisory services programs, decentralization, and higher local presence, are likely to enhance the prospects of developing new and more successful ap- proaches to small investments.  Remaining engaged as an advisor in privatization transactions for a period after completion of the initial transaction may reduce the risks of bad outcomes. Privati- zation in and of itself does not always ensure success, notably in those cases where privatization results in a private monopoly. The quality of the concession agreement between the government and the private entity in particular is critical to ensuring adequate results. In such transactions, remaining engaged as an impartial advisor for a period after the initial transaction is completed in order to help adjust contrac- tual agreements is likely to ensure optimal outcomes.  Consideration should be given to establishing a field presence in smaller, high-risk countries that have undertaken significant reforms and established favorable busi- ness environments. Uganda has undertaken a broad range of reforms that have sig- nificantly increased opportunities for the private sector. The IFC established a coun- try manager in Uganda in 2000-02. This provided clear advantages, such as delivering consistent messages, facilitating a lead IFC role in several sectors, and providing a convenient interface for clients. Furthermore, absence of a local country manager will tend to undermine coordination of various IFC activities, resulting in missed opportunities. Establishing a field presence in some small, well-performing countries such as Uganda where reforms have substantially increased, could expand the opportunities for IFC engagement.  Increasing south-south investment flows present new opportunities for the IFC. There is evidence of significant growth in FDI from investors in developing countries such as China, India, as well as countries from the Middle East. This enhances the IFC’s opportunities to support such investments, direct investment to sectors with high development impact, and strengthen social and environmental aspects of in- vestments. To seize these opportunities, the IFC will require coordinated business development efforts with other regional departments in the IFC as well as a strong local presence in both origination and destination markets. 67 Chapter 7 Harmonization and Partnership Background Uganda is a leader in promoting the principles of the 2005 Paris Declaration of Donor Har- monization and Aid Effectiveness. This has been a prominent factor in its success for mobi- lizing substantial development aid flows. President Museveni’s government established generally good relations with the development community and helped to pioneer a number of development initiatives, including the Poverty Reduction Strategy Paper (PRSP), HIPC, and donor alignment and harmonization. Uganda has also become a highly aid-dependent country and has numerous development partners. According to data from the Organization for Economic Cooperation and Devel- opment- Development Assistance Committee (OECD-DAC), net official development assis- tance (ODA) disbursements for Uganda increased from $790 million in 2001 to $1.551 billion in 2006, resulting in an average ODA-to-gross national income (GNI) ratio of about 15 per- cent per year (figure 14and annex A, table 3).1 Over 42 development partners are providing assistance in diverse sectors; including 26 bilateral and 16 multilateral donors (annex A, ta- ble 10). IDA is the single largest development partner, providing about 25 percent of the to- tal ODA disbursements in 2001-06. During the same period, the AfDB accounted for about 4.4 percent of the ODA disbursements. About 60 percent is provided by bilateral develop- ment partners, of which the United States, the United Kingdom, the Netherlands, Denmark, Ireland, Sweden, and Norway are the leaders. The World Bank and the AfDB together ac- count for about 70 percent of total multilateral flows. 69 CHAPTER 7 HARMONIZATION AND PARTNERSHIP Figure 13: Sources of External Development Assistance All Donors 1750 ODA disbursement (US$ million) 1500 Other Partners IDA 1250 AfDF 1000 750 500 250 0 2001 2002 2003 2004 2005 2006 Year Bilateral Donors Others 10% United States Denmark 28% 10% Germany 6% Ireland 7% United Kingdom Netherlands 17% 10% Norway Sweden 6% 6% Source: OECD-DAC (Annex table 3). Note: AfDF=African Development Fund; IDA= International Development Association; ODA= official develop- ment assistance. Although not explicitly stated in their strategy documents, donor harmonization and align- ment were important drivers of World Bank and AfDB support to Uganda. Harmonization and alignment are needed because of the mix of aid delivery mechanisms and variety of ap- proaches among development partners. Some, such as Ireland and the United Kingdom, have moved predominantly toward budget support, whereas others, such as Germany, pro- vide only a small portion of their ODA as budget support. The World Bank has shifted em- phasis toward budget support, but still provides almost half of its support through projects. The AfDB provided one round of budget support during the period reviewed through the 70 CHAPTER 7 HARMONIZATION AND PARTNERSHIP PRSL (in 2002). However, because of restrictions on procurement of items from non-AfDB member countries, the AfDB was unable to participate in SWAps and continued to provide almost all of its support through projects. The different resource endowments of the World Bank and the AfDB also influenced the relative roles in the donor harmonization and part- nership process. Harmonization Mechanism in Uganda The aid harmonization mechanism in Uganda—specifically, the development and use of common procurement, financial management, and other fiduciary procedures among de- velopment partners—was driven by the government’s realization that development assis- tance needed to be oriented toward implementation of the first PEAP in 1997. The second half of the 1990s and early 2000s saw substantial success in the management of the harmoni- zation process, such as the introduction of general budget support (GBS), SWAps, the PAF, and the development of the Partnership Principles in the context of the PEAP (figure 14):  Uganda was a pioneer in GBS,2 which currently accounts for half of its ODA and in- volves a wide range of donors and a large number of instruments. The move toward GBS was initiated in the late 1990s with the structural adjustment loans (SALs) and debt relief form of programmed assistance. Following reforms to strengthen the planning and budget system, which underpinned the move to sectorwide planning and coordination in key sectors (SWAps) and the development of the PEAP, the need for budget support became imperative. The process was further strengthened by the link between HIPC debt relief and the creation of the PAF, which tracked re- sources targeted at poverty reduction programs.3  The SWAps were used to match donor and budget resources with sector strategies. The MTEF and the sector working group were used to facilitate the process. The process also promoted alignment, which involved development partners subscribing to or adopting the country’s own strategy or framework (to be discussed below).  The PAF emerged following the HIPC debt relief in 1998 to demonstrate to interna- tional and domestic stakeholders that savings from debt relief were being channeled as additional resources to priority PEAP sectors. The Partnership Principles were introduced in 2001 with the second iteration of the PEAP. They clearly specified the sequence of the government’s preferred form of aid assistance, that is: GBS that is not earmarked, followed by budget support earmarked to the PAF, then sector budget support, and finally project support. Development partners undertook to work toward full harmonization.4 71 CHAPTER 7 HARMONIZATION AND PARTNERSHIP Figure 14: Key Stages of Aid Harmonization in Uganda PEAP Progress Report GOVERNMENT March: PEAP Initiation of draft National Development Develop- November: Final First PEAP Second PEAP PEAP partners sign ment Plan PEAP PEAP Progress Progress off to PEAP Report Report Partnership Principles 1997 1999 2000 2001 2002 2003 2004 2005 2006 SAL/SWAp Education Health SWAp PRSC-1 PRSC-2 PRSC-3 PRSC-4 PRSC-5 PRSC-6 SWAp Donor coor- Enhanced Joint country Final DEVELOPMENT PARTNERS dination HIPC debt integrated fidu- UJAS around local relief ear- ciary assess- government marked sup- ment (7 devel- development port through opment partners) the Poverty July: UJAS part- Action Fund ner workshop November: UJAS draft Source: Derived from World Bank (2005a). Notes: HIPC= Highly-Indebted Poor Country; PEAP=Poverty Eradication Action Plan; PRSC=Poverty Reduction Support Credit; SAL=Structural Adjustment Loan; SWAp=sectorwide approach; UJAS= Uganda Joint Assistance Strategy. In supporting the government’s aid harmonization process, donors (including the World Bank and the AfDB) adopted the GBS as part of their aid delivery instruments, and partici- pated in the donor alignment process, including Local Development Partners’ Group Meet- ings, the UJAS, and the Division of Labor exercise. The World Bank and the AfDB played leading roles through bilateral collaboration and the use of PRSC/PRSL. World Bank and AfDB Support for Harmonization World Bank-AfDB Collaboration: The participation of the AfDB and the World Bank in the harmonization process had its foundation in their partnership framework, which de- rived from efforts in the late 1990s to enhance collaboration in individual countries.5 The two banks cooperated through the joint sector working groups and participated in program identification as well as in enabling the government to monitor the PEAP’s implementation and public expenditures, especially those for reducing poverty. Most of their programs were parallel, especially with respect to education, agriculture, power, and water and sani- tation, but with well-defined lines of influence, such as concentration of activities in differ- 72 CHAPTER 7 HARMONIZATION AND PARTNERSHIP ent districts. The banks participated in the PAF, which was instrumental in improving budget management, accountability of public expenditures, and in the decision of develop- ment partners to adopt the GBS. But the impact of the collaboration has had modest results, mainly because of challenges well known to the two banks. First, the agreed areas of cooperation are too broad relative to the resources available between the two banks. The World Bank is larger, has greater finan- cial leverage, is more decentralized and therefore could vest decision-making at lower le- vels. Second, the effort to reduce mission overload (by promoting joint missions) required increased transaction costs, especially for planning, simplifying reporting, and harmonizing procurement practices. Third, staff incentives for effective partnership needed improve- ment, especially for the AfDB, which is at a relatively early stage of decentralization. Fourth, the partnership has been overtaken by the UJAS—the collaboration between the two banks is now part of a broader effort to align development partners behind country strate- gies and to harmonize approaches within country systems. PRSC/PRSL and the GBS Mechanism. During the review period, GBS was used to deliver an important share of the commitments of both banks; a substantial share of the World Bank through six PRSCs, and a moderate share for the AfDB through the PRSL and earmarked sector budget support. The PRSCs/PRSL facilitated joint discussions between the World Bank, the AfDB, and other development partners with the government and made it possible for development partners collectively to link their disbursements to the fulfillment of prior actions that were agreed in the PEAP results matrix. However, under the PRSCs and AfDB’s single PRSL, the conditions and benchmarks pertained only to the banks individual- ly. This implied that other development partners did not commit to set additional condi- tions for their assistance. The PRSCs/PRSL (and GBS in general) raise issues with respect to their design, limitations, and expected impacts. The PRSC/PRSL was designed to replace the SWAp but not to subs- titute for investment lending. However, no specific attempt is made to complement the PRSCs with parallel sector investment programs. Dialogue and conditionality (usually re- ferred to as triggers in World Bank operations) represented key inputs in design. A special feature is the use of performance criteria to monitor policy reform effort. However, the instrument has a number of design limitations:  In the case of the PRSC/PRSL, no direct technical assistance and capacity-building programs were developed parallel to them. Ongoing investment operations and analytic activities provided opportunities for such support.  No clear guideline or justification for determining the size of the PRSC/PRSL was provided. It is also not clear what criteria were used for choosing single rather than multiple-tranche disbursements and their associated timing, although the current trend is a move to single-tranche disbursement.  Fiduciary compliance is built into the budget system and PRSC/PRSL does not pro- vide any additional improved mechanism for accountability or budget discipline. Hence, issues of budget discipline continue to plague the Ugandan authorities.  The use of the results matrix as a performance framework has tended to create con- tradictory incentives. The government sought to establish modest performance tar- 73 CHAPTER 7 HARMONIZATION AND PARTNERSHIP gets (especially with respect to governance), whereas the World Bank and the AfDB pushed for more ambitious targets, thus leading to contentious dialogue that has given much attention to the details of assessment process, often at the expense of open discussion of strategic problems and their potential solutions. Overall, the PRSCs (and to a limited extent, the PRSL) had an impact in three areas. First, the PRSC/PRSL facilitated policy dialogue by promoting country ownership and responsi- bility for the policy formulation and implementation process, as well as in the quality of pri- oritization, target setting, and monitoring. Second, although there is no single area where the PRSC or the PRSL could be said to have been a decisive influence, they nevertheless played a facilitating role in resolving broad-based development initiatives in governance, expansion in poverty-reducing expenditures, and service delivery, which could not have happened through another mode of support. Other modalities cannot provide resources in such fungible form and allow policy dialogue that covers important cross-cutting issues as well as sectoral questions. Thus, compared to other modes of external flow to Uganda, the PRSC/PRSL constituted a lower level of transactions costs. Finally, the contribution of the PRSC/PRSL (and GBS in general) toward the harmonization and alignment of the aid process has only been modest, mainly because of the different approaches by development partners in negotiating and as- sessing policy compliance, especially with respect to governance issues. The joint budget support mechanism has not yet been put in place. Collaboration with the IMF: Both banks collaborated with the IMF, the World Bank some- what more so. The collaboration between the World Bank and the IMF was within the mandate of the two institutions and involved support for the government’s effort to imple- ment its PEAP. The IMF provided its support through the Poverty Reduction and Growth Facility (PRGF)6 and concentrated on macroeconomic and financial sector issues, focusing on short- and medium-term macroeconomic stability, which fall under the PEAP’s growth pillar. The structural program of the IMF addressed the areas of tax administration, budget management, monitoring of local government finances, financial sector regulations, and im- provements to national accounts and statistics. The collaboration between the World Bank and the IMF was effective in five areas. It as- sisted the government in the revision and implementation of its poverty reduction strategy through the preparation of a joint assessment of the PRSP and an annual PRSP progress re- port. It provided support on HIPC-related issues (including MDRI) through joint prepara- tion and update of debt sustainability analysis for Uganda during 2002 and 2007. Along with the AfDB and other development partners, the collaboration worked closely to provide the government with the support needed for institutional and policy reform in public ex- penditure management. The IMF led the dialogue on macroeconomic policy (including monetary and fiscal issues), and the World Bank focused on strategic expenditure allocation and efficiency of public expenditures through the work on PERs and PRSCs and the joint preparation an annual report on HIPC tracking of poverty-reducing spending. A joint World Bank-IMF financial sector assessment was conducted in early 2000. Its conclusions led to support for the strengthening of the insurance sector, reform of the pension system, and development of the legal and regulatory framework for microfinance (supported by the 74 CHAPTER 7 HARMONIZATION AND PARTNERSHIP PRGF and the PRSC series of both institutions). Finally, the World Bank and the IMF pro- vided technical support on trade reforms in the context of the East African Community at the regional level. Donor Alignment and the UJAS Alignment behind a common set of priorities was facilitated by the government’s first PEAP in 1997, which encouraged the development of SWAp arrangements and the introduction of GBS. Further progress in aligning development partners’ support around a common framework took place when a group of seven development partners, including the World Bank and the AfDB, completed the UJAS in 2005. The UJAS constituted the response from the development partners to the government’s revised PEAP in 2004 by advancing the prin- ciples of the 2005 Paris Declaration on Aid Effectiveness. The strategy was prepared in 2005 by the World Bank and the AfDB and a group of five development partners, including: the United Kingdom’s Department of International Development (Department for International Development, Germany, the Netherlands, Norway, and Sweden.7 It constituted the core strategy for the group for the period 2005-09, and was approved by the authorities of mem- ber partners. The UJAS was approved by the board of the World Bank in January 2006 and of the AfDB on December 19, 2005. The UJAS proposed a: (a) common strategic direction for the support of the group for the implementation of Uganda’s PEAP; (b)harmonized assessment frame- work for determining levels of finance in an effort to improve the predictability of aid; and (c) support for monitoring and evaluation in line with the implementation of the PEAP. Relevance. The UJAS has three main advantages. First, key government officials note that it has helped reduce transactions cost on the government by limiting the number of direct interactions between the government and individual agencies on issues common to the UJAS membership. But it has limited effect on the time spent by the government in hosting and supervising missions for each project, which often do not suit the government’s timeta- ble. Although the common approach to dialogue between the government and its partners has saved time, some government officials have pointed out that the process has neverthe- less been overwhelming for government officials who have to deal with the combined and aggressive questioning by development partners. It has similarly constituted a heavy transactions cost on UJAS partners as the path to consensus was complex, and producing a joint strategy took much more time than preparing a single agency assistance strategy.8 On- going efforts by UJAS members to put in place a set of Partnership Principles will likely help to resolve their policy differences. Second, the UJAS partnership is aimed at eliminating the parallel program implementing systems that are currently in operation by adopting the country’s own systems, thereby helping build government capacity and promoting harmonization. Unfortunately, there has been only modest progress so far as country capacity for dealing with fiduciary issues re- mains a major concern for the UJAS partners. The use of country systems poses a consider- able dilemma for many partners and is an issue that needs to be dealt with as urgently as possible. For example, the AfDB was unable to participate in the resource pooling in SWAp arrangements with other partners mainly because of the requirement to restrict procure- 75 CHAPTER 7 HARMONIZATION AND PARTNERSHIP ment to only its member countries. This procurement constraint is being addressed.9 Sev- eral AfDB sector team members expressed a preference for basket lending, but stated that the sectors were not ready for the use of the instrument because internal control systems were still weak. The adoption of country systems would help eliminate the multitude of procedures and requirements from development partners that put a strain on government staff. Finally, alignment under the UJAS is more likely to help improve program selectivity and reduce the incidence of crowding out. The establishment of joint sector working groups, the development of SWAps and pooled funding mechanisms, joint missions, and joint analytic and advisory activities by development partners has had a substantial impact on aid effec- tiveness. However, there are limitations. Some development partners have complained about the limited presence of the AfDB in Kampala, which inhibited its ability to fully par- ticipate in partnership meetings. For example, the AfDB was the notional leader for the Pri- vate Sector Development Working Group, but it was unable to effectively discharge this function because of lack of appropriate expertise at the country office. Similarly, although the World Bank emphasized direct budget support by financing the PEAP through annual PRSCs, progress toward a joint budget support mechanism has been slow. The World Bank has acknowledged the need to review its guidelines to accommodate the concerns of UJAS partners needing to pool resources in the context of joint budget support. The UJAS mem- bers’ Partnership Principles, under preparation, will also facilitate and define precise guide- lines for disbursement under joint budget support. Assessment of Quality at Entry. Overall, the UJAS has had a slow start on the three main elements of the partnership (strategic direction, predictability of resource flow, and M&E requirements). It has been able to adopt a common strategy aligned to the PEAP. Each member partner is attempting to carve out a niche (table 19), which could reflect its interest, and most likely would inform the ongoing government effort to forge a division of labor among partners based on the dictates of comparative advantage.10 As it stands, most devel- opment partners provide support in almost all key policy areas, thereby creating a substan- tial crowding-out effect. The Division of Labor Exercise also faces a challenge with respect to how to deal with sectoral allocation as each partner’s comparative advantage shifts over time. The UJAS partnership also currently lacks a well-defined leadership framework, a role which by default had been handled by the World Bank. The UJAS partners are cogni- zant of this situation and are discussing the issue. Progress in dealing with the predictability of resource flow is much farther behind, in part because of the partners’ differing perspectives on governance issues (particularly on corrup- tion and political transition). Dealing with political governance, especially the electoral sys- tem that is the centerpiece of the bilateral partners, would be most taxing as the partners move to agree on the principles that would guide the joint budget support. Different as- sessment of the risks to development effectiveness posed by the political transition could create tensions among UJAS partners, as occurred during the 2006 parliamenta- ry/presidential elections. 76 CHAPTER 7 HARMONIZATION AND PARTNERSHIP Table 19: Overview of Development Partners’ Current Engagement (Based on 2004 PEAP) United Kingdom United States UN Agencies Commission Netherlands World Bank European Germany Denmark Belgium Sweden Norway Austria France Ireland Japan AfDB Italy IMF I. Governance Agenda Economic X X X X X X X X X X X X X management Security, X X X X X X X X X X X X X X X X X conflict Good X X X X X X X X X X X X X X X X X governance II. Growth Agenda: Enhance Production Private sector X X X X X X X X X X X X X Agriculture X X X X X X X X X X X X X X X X Fisheries X X X X X X Forestry X X X X Non- X X X X X X X X X X agriculture Infrastructure X X X X X X X X X X X X X Environment X X X X X X X X X Microfinance X X X X X X X X X X X X III. Human Development Education X X X X X X X X X X X X X X X X X Health X X X X X X X X X X X X X X X X Water & X X X X X X X X X X X X X X X sanitation Inclusiveness X X X X X X X X X X Source: Adapted from Overseas Development Institute (2007), Table 31. Notes: AfDB=African Development Bank; IMF=International Monetary Fund; PEAP= Poverty Eradication Action Plan; UN Agencies= United Nations. Finally, much more work is required on M&E. The UJAS partners rely on the government’s own assessment of the results of the PEAP in judging the development effectiveness of the UJAS through the Results Framework (matrix) devised by the partnership.11 The govern- ment has established the annual PEAP review mechanism, which draws on the existing re- porting and review arrangements for sector-specific support, for the PEAP as a whole, and the for the budget process. Although the M&E coordinating function resides in the Office of the Prime Minister, there is no perceptible framework around which monitoring and evalu- ation takes place. The M&E Unit of the Office of the Prime Minister is currently undertak- ing a review of the M&E system. Recognizing that developing a harmonized approach to development partnership takes time (with such investment high up front), this assessment 77 CHAPTER 7 HARMONIZATION AND PARTNERSHIP concludes that the role of the World Bank and the AfDB in the UJAS partnership has had a modest impact. The quality at entry is rated moderately satisfactory. Assessment of Relationship Management This section outlines the relevant findings regarding World Bank/AfDB’s relations with the government, development partners, and civil society (including the private sector). It draws on evaluation team interviews with country team members (of both the World Bank and the AfDB), development partners resident in Uganda, and government officials. The conclu- sions with respect to the World Bank are similar to the findings of the World Bank’s Uganda Client Survey conducted in 2003 (box 5). Box 5. Findings of the World Bank’s Client Survey The conclusions by the evaluation mission are similar to the findings of the most recent World Bank Client Survey for Uganda, which was conducted in 2003 (World Bank 2004).* There is no compara- ble survey for the AfDB. Despite the survey’s limited sample coverage and low response rate, the findings are indicative of the overall positive attitude toward the World Bank in Uganda, especially with respect to its financial services, policy advice, knowledge programs, and collaboration and partnership. The key findings were:  The World Bank’s greatest value is (in the order of importance) in the financial service it pro- vides, followed by policy advice and knowledge programs.  The World Bank’s involvement is greatest when: (i) helping to strengthen infrastructure devel- opment; (ii) helping to reduce external debt; and (iii) contributing to Uganda’s Poverty Eradica- tion Action Plan objectives.  World Bank effectiveness rated highest when helping to strengthen infrastructure development (a rank of 4 out of 5), macroeconomic and trade policies (3.9 out of 5), and donor coordination and resource mobilization (3.8 out of 5).  With respect to the World Bank’s program in Uganda, a rating of 7.9 (out of 10) to the effect that the World Bank plays a relevant role in the development of Uganda, a rating of 6.1 (out of 10) that World Bank recommendations are realistic and sustainable. Note: Similar Client Surveys were conducted by the World Bank in 1995 and 1999. The 2003 Client Survey tar- geted a sample of 238 respondents comprising: senior government officials, staff of government ministries, em- ployees of implementing agencies, local government officials, bilateral/multilateral institutions, private sector, nongovernmental organizations and the media. The response rate was 22 percent. Source: World Bank 2004. Relations with Government. The evaluation team met with a cross-section of government officials (annex I). Issues that warrant highlighting include:  The importance attached to the relationship between the World Bank/AfDB and the government. One government official noted that the depth of AfDB local knowledge facilitated dialogue with the local authorities. The World Bank/AfDB was also help- ful in supporting the authorities’ pursuit of policy reform because of their “indepen- dent and non-ideological” status.  The World Bank’s dominating role in policy dialogue. Some officials in sector minis- tries noted that this was in part because the World Bank teams tend to be technically 78 CHAPTER 7 HARMONIZATION AND PARTNERSHIP competent and well prepared in the subject areas of dialogue. Other officials com- plained about the World Bank’s occasional lack of flexibility, especially in private sector development. Complaints about the AfDB were largely about their lack of a presence in Kampala, especially with respect to project supervision. Government of- ficials voiced a need for the AfDB to develop a substantial capacity in the Country Office by dealing with the skills mix of their staff. The government officers inter- viewed did not express any problems with the current arrangements with respect to the Country Office of the World Bank.  Interest in receiving more substantive and more timely analytic reports. Some offi- cials encouraged the AfDB to undertake more economic and sector work and rec- ommended that the World Bank pursue more analytic work in partnership with government counterparts. The general feedback pointed to increasing openness, flexibility, and tolerance for the ac- commodation of government policy reform positions by World Bank and AfDB missions and programs. However, a number of issues were raised. The World Bank, unlike the AfDB, demanded too much in policy reforms in a short time and tended to impose its views. Others noted the problem of high staff turnover and failure by the World Bank to adequate- ly brief new staff replacements, such that it occasionally triggered the need for wholesale revisions of ongoing programs.12 Relations with Development Partners. The development partners found the leadership provided by the World Bank very helpful in coordinating donor positions on economic is- sues, especially when backed by adequate economic and sector work. They found the World Bank Country Office played a very constructive role and felt that the AfDB needed to expand its Country Office, especially in light of its expanding role in Uganda. They ex- pressed the need for the AfDB to be more proactive in engaging with development partners, both on a one-to-one basis, and in formal and informal meetings (largely because they tended to see it happening less frequently than they would like). Not all donors found the role of World Bank and AfDB faultless within the partnership framework in Uganda. Some donors complained that with the World Bank’s Country Di- rector in another country, it was not clear who was actually in charge in Kampala. Some development partners found information-sharing insufficiently regular with respect to the World Bank. Development partners also had negative views about the World Bank and AfDB’s policy stance on governance, as discussed in Chapter 3 of this report. Relations with Civil Society. Although the dialogue between the World Bank/AfDB and civil society has improved substantially since the PEAP and the shift away from structural adjustment programs, many civil society members still felt that there was room for im- provement. Key divergence on issues with poverty reduction remained to be resolved. A majority of the interviewees agreed that both the World Bank and the AfDB needed greater outreach efforts. The evaluation team’s interviews with civil society representatives rein- forced the finding that there was a limited agreement by the civil society on assumptions about how World Bank/AfDB-supported policies affect poverty reduction. The World Bank, in particular, continued to be seen in the context of the structural adjustment program of the 1980s and 1990s. Outreach programs by the two banks continue to be weak on ongo- 79 CHAPTER 7 HARMONIZATION AND PARTNERSHIP ing reforms in the two institutions (for example, the World Bank’s push into PRSCs). It is in this area where differences of view between civil society and government policies make the dialogue especially sensitive. Conclusion Two conclusions follow from the assessment of the World Bank and AfDB roles in aid alignment and donor harmonization in Uganda:  First, although efforts at alignment and harmonization have been substantial, both the UJAS (on alignment) and the procedures around the GBS instrument (on harmo- nization) need further refinement in order to attract increasing participation from all development partners. The World Bank and the AfDB, along with other multilateral institutions, can provide leadership in this area.  Second, the GBS (supported by the World Bank through the PRSCs and by the AfDB through the PRSL) had only a modest effect in facilitating aid harmonization. Rein- forcing the original objectives of the GBS as an instrument for minimizing transac- tion costs (and for promoting the use of country systems) would mean that a greater focus should be devoted to a joint budget support mechanism (a process currently under discussion by the UJAS members), thereby assisting the government in budget prioritization, monitoring, and evaluation. There is also a need to design the com- plementarities between instruments of budget support (PRSCs) and investment fi- nancing in a conscious way, thereby shifting the focus on the maintenance of due process of public spending rather than leveraging of unrelated reform. 80 Chapter 8 Conclusions and Recommendations Overall Assessment This section summarizes the assessment of the contribution of the World Bank, the AfDB, and the IFC to the development of Uganda during the period fiscal years 2001-07 for the World Bank, 2002-07 for the AfDB, and fiscal years 1999-2008 for the IFC. It consolidates the conclusions of the previous chapters with respect to the relevance, efficacy, and efficiency of various forms of assistance provided. The section also discusses the risk to development outcome of the support provided. As stated earlier, the ratings for the World Bank and the AfDB are not comparable. Assessment of the World Bank’s contribution. The overall outcome of the World Bank’s assistance is rated moderately satisfactory (table 20). This reflects the combined ratings for the relevance of objectives, design factors, the choice of instruments, and efficacy. With re- spect to relevance, the review concludes that the strategies and supporting programs of the World Bank during the period reviewed reflected strong client orientation and emphasized technical quality (especially with respect to the analytic work and project preparation that underpinned the various interventions). By addressing complex policy and institutional development issues in governance, growth, and human development, the level and scope of support was comparable to what the World Bank provided to countries with development needs similar to those of Uganda. Although it was not possible to evaluate the efficiency of the support provided by the World Bank, the review concludes that the use of resources met its intended objectives. The programs largely met the commitments proposed in the CAS, and reflected the broad objectives outlined in the CAS. In addition, the analytic and advi- sory activities products were cost effective and largely complemented the lending program. Portfolio performance was close to World Bank average. In terms of efficacy, World Bank assistance substantially achieved its objectives in five areas: decentralization, public sector reform, growth and economic transformation, education, and water and sanitation. Public sector reform, as well as financial management and accounta- bility reforms in the local councils, supported by general budget support and capacity build- ing, helped enhance institutions and service delivery in the rapidly expanding local gov- ernment structure (Chapter 3). Along with the IMF and other development partners, the World Bank’s key policy dialogue, underpinned by high-quality analytic work, helped the government maintain a prudent fiscal stance throughout the period, though the analytic work on growth could have been more timely (Chapter 4). Support for education and health has also had desirable outcomes and helped increased coverage, improve access, and establish a framework for better service delivery (Chapter 5). However, World Bank support had modest outcomes in: (i) reducing the perception of in- creasing corruption (Chapter 3); (ii) promoting a competitive business environment by im- proving the supply of power and reducing transport costs; enhancing agricultural produc- 81 CHAPTER 8 CONCLUSIONS AND RECOMMENDATIONS tivity (Chapter 4); and (iii) helping the government deal with family planning and reproduc- tive health issues (Chapter 5). Table 20: Summary of Outcome Ratings for World Bank Assistance Strategic Country World Bank Program Assistance Strategy Achievement of Associated Country Assistance Strategy Results Outcome Ratings Goals Governance Moderately Satisfactory Decentralization Financial management and accountability reforms supported under local Satisfactory government yielded positive results in building institutions and enhancing capacity. Program achieved targets established under LGDP grant. Public sector Limited capacity in ministries, departments, and agencies did not permit Moderately satisfactory reform institutionalization of the results-based approach to public service management. Expected pay reform was also not fully achieved. Support for financial management reforms yielded positive results. Anti-corruption Support to improve accountability has not significantly reduced the perception of Moderately Unsatisfactory high corruption. Government effectiveness is perceived not to have improved. Use of PRSC did not facilitate governance reform, as the direct links between Bank support and outcomes were not clear. The analytic basis for governance reform was limited. Growth Moderately Satisfactory Growth and Growth was moderate and only slightly off target, but World Bank analytic support Satisfactory macroeconomic was not timely. Fiscal prudence was maintained, although arrears remained due to stability implementation weaknesses with MTEF. Domestic revenue mobilization was modest. The government’s aid dependence remains high with likely implications for “Dutch disease.” PSD and World Bank support, with IMF collaboration, helped to deepen the financial sector, Moderately satisfactory competitiveness promote privatization, and improve the regulatory environment. Nonetheless, the economy’s competitiveness was not significantly enhanced because of failure to resolve the power issue, substantially reduce road transport cost, and improve access of SMEs to financial sector services. Agriculture and Support for agriculture, although focused, was too heavy aimed at institutional Moderately satisfactory environment capacity building. Support for NEMA has improved the focus on the preservation of the natural environment. However, the analytical work was not matched by comparable operations. The current status of agriculture productivity is unknown. Human Moderately Satisfactory Development Health Despite improved access and citizen satisfaction with public health service delivery, Moderately Unsatisfactory outcomes in family planning and reproductive health remain unsatisfactory. PRSCs have declined as effective instruments for dealing with specific health sector issues. Education Support has: (i) yielded equitable coverage, especially for girls; (ii) provided Moderately Satisfactory institutional strengthening by meeting output targets established in the PEAP and through PRSCs; and (iii) sustained resource flow to the sector. Support was unable to deal with inefficiency issues and concerns with Uganda’s attainment of MDG2. Water & sanitation Support to local governments through the PRSCs helped exceed all CAS Satisfactory (service performance targets (protected springs, boreholes drilled, and new wells delivery aspects) constructed). Both rural and urban access to safe water showed major improvement, and are on track to exceed the corresponding MDG targets. Progress in sanitation provision and hygiene mitigation was limited, with potential negative effects on the achievement of MDGs in the area of infant, child, and maternal mortality. Notes: CAS= Country Assistance Strategy; IMF= International Monetary Fund; LGDP= Local Government Development Project; MTEF= Medium-Term Expenditure Framework; MDG= Millennium Development Goal; NEMA= National Environmental Management Agency; PEAP= Poverty Eradication Action Plan; PRSC= Poverty Reduction Support Credit; PSD= private sector development; SME= small and medium enterprises. 82 CHAPTER 8 CONCLUSIONS AND RECOMMENDATIONS Assessment of the AfDB’s Contribution. Table 21 summarizes the outcome ratings of the support provided by the AfDB and concludes that overall outcome is moderately satisfac- tory. This should be viewed in the context of AfDB’s limited resource base and its strategic selection of areas to intervene in light of the role played by other development partners. The AfDB aligned its strategies with the PEAP and provided selective assistance under the PEAP pillars, thereby complementing the World Bank and other development partners. However, resource use relative to CSP targets was lower than expected given the long project effectiveness and gestation periods, which delayed project implementation. The AfDB’s assistance achieved its targeted objectives for decentralization, public sector reform, growth and economic transformation, improved competitiveness, agriculture, and water and sewerage. The AfDB complemented the efforts of other development partners, notably the World Bank, in enhancing improvements in decentralization through capacity building and institutional support (Chapter 3). Its assistance was particularly important in improving access to potable water supply through its small towns and rural water projects. Access to mental health, primary health care, and education services was also improved (Chapter 5). In addition, its diversified approach to agriculture through support for fishe- ries and livestock is more likely to improve rural incomes (Chapter 4). However, the AfDB’s support for anti-corruption needs refocusing as it did not reduce the perception of increas- ing corruption in Uganda. Quality issues also persist with respect to service delivery for mental and primary healthcare and primary education. Joint Assessment: Although the assistance strategies and coverage of programs by the two institutions were certainly relevant to the problems that confronted Uganda, the timeliness of instruments and design factors did not always reflect the existing government capacity and the political environment. For example, interventions by the World Bank and the AfDB in the power sector were overly optimistic, overemphasizing institutional reforms, and un- derestimating the risks associated with the construction and operations of hydroelectric power plants. Similarly, especially with respect to the World Bank, the shift from invest- ment operations to PRSCs in support of the social sectors underestimated the complexity of the parallel program of decentralization in making it possible to achieve the multiple goals of improved access, coverage, and quality in education, health, and water and sanitation. Risk to development outcomes is similar for both banks. The institutional development impact of the assistance of the two banks is widespread and multidimensional. Both pro- vided support (financial and analytical) in almost all of the major sectors of the economy. The outcomes of their contributions are reflected in legislative and judicial institution build- ing to support governance, infrastructure reforms (including reforms of regulatory systems and direct investments in power, roads, and water), and infrastructure and capacity build- ing to support service delivery in health, education, and water and sanitation. However, the support provided has not been able to reduce two risks facing the develop- ment outcome of assistance. The first is the failure to substantially improve the govern- ment’s capacity to mobilize domestic resources. The tax revenue to GDP ratio remains low, averaging an estimated 12.5 percent per annum over the past decade and is projected to reach 15 percent per annum by 2010 (World Bank 2008). With the government expenditure to GDP ratio projected to remain in excess of 20 percent per annum, Uganda’s aid depen- dence will continue, as will the scope for flexibility in policy options. The second risk is the 83 CHAPTER 8 CONCLUSIONS AND RECOMMENDATIONS prospect for political tension, largely from the electoral process and, to a smaller extent, from the conflict in the north. The support for governance reforms by the two banks has not yet achieved its anticipated impact, nor is there complimentary support from other devel- opment partners to adequately address this issue. On balance, the risk to development out- comes is rated substantial for both banks. Table 21: Summary of Outcome Ratings for African Development Bank Assistance Strategic Country AfDB Program Strategy Paper Achievement of Associated Country Strategy Paper Results Outcome Goals Ratings Governance Moderately satisfactory Decentralization Assistance helped strengthen institutions and human capacity in financial management and Satisfactory accountability of local government. Access to basic services improved. Public sector Support for procurement reform has not yet yielded the expected results. Support for Moderately management financial management has helped the government to achieve expenditure targets related to satisfactory reforms poverty spending. Anti-corruption Support for accountability and training to facilitate the reduction in corruption has not Moderately helped to significantly reduce the perception of corruption. Government effectiveness is unsatisfactory perceived not to have improved through the assistance provided for audit systems. Growth Moderately satisfactory Growth, fiscal The AfDB’s contribution was substantial in achieving poverty-reducing expenditure targets. Satisfactory reform and export Fiscal prudence was maintained, although arrears remain. Revenue mobilization remains diversification weak. Substantial progress was made on export diversification. PSD/SME Focus on rural finance helped improve availability of lines of credit to SMEs. Support for Moderately development and communal roads is helping open up the rural areas. Overall, the economy’s satisfactory competitiveness competitiveness was not significantly enhanced because of the failure to resolve the power issue and to substantially reduce transport costs. Agriculture The diversified approach to supporting agriculture yielded mixed results: sustained growth Satisfactory of agriculture of 3 percent has not been achieved, but the integrated approach is helping reduce soil degradation, commercialize traditional agriculture, and develop fisheries and livestock. Human Moderately development satisfactory Health Improvements in regional access to mental health and primary health care services were Moderately achieved, but severe shortages of staffing and drugs continued to limit effective access to satisfactory mental health care. The lack of an adequate M&E program support was also a shortcoming. Education Increases to both access and quality of education occurred, but quality improvements were Moderately limited by the timeliness and quality of the delivery, as well as by the relatively high demand satisfactory for education. The education system in Uganda still faces high drop-out rates and low transition rates from primary to post-secondary education. Water & sanitation Support from the Small Towns Water project helped exceed all CSP performance targets Satisfactory (service delivery (protected springs, boreholes drilled, and new wells constructed). Both rural and urban aspects) access to safe water showed major improvement, on track to exceed the corresponding MDG target. Relative neglect of sanitation provision and hygiene mitigation could have potential negative effects on achievement of MDGs in the area of infant, child, and maternal mortality. Notes: AfDP= African Development Bank; CSP= Country Strategy Paper; MDG= Millennium Development Goal; M&E= monitoring and evaluation; PSD= private sector development; SME= small and medium enterprises. 84 CHAPTER 8 CONCLUSIONS AND RECOMMENDATIONS Assessment of the IFC’s Contribution. The IFC’s main contribution has been in telecom- munications, helping to restructure the sector and expand access to mobile communications. It has also played a substantial role in providing assistance to institutional and regulatory reforms in leasing. The IFC also supported the supply response to these reforms by helping clients introduce new financial products in the market, such as: pioneering of the leasing in- dustry, introduction of mortgage programs, introduction of a trade finance program, and piloting a program targeting women’s access to finance. In these instances, IFC’s additional- ity was in the provision of long-term finance and expert advice in business development, which were critical in mitigating the risks of entering new, untested sectors. Despite signifi- cant joint efforts with the Bank, the desired results in the energy sector have yet to be seen. Limited impact was seen in SME access to finance and in developing housing finance, de- spite reforms in these areas. Factors of success included: (i) sustained involvement in priori- ty sectors such as energy, telecommunications, and financial services; (ii) a government committed to policy and institutional reform; and (iii) a close and well-established relation- ship with clients. Lessons The principal findings (or interpretation of factual events) lead to five lessons for World Bank and AfDB assistance in Uganda (lessons for the IFC are in Chapter 6): In translating objectives into programs of assistance, it is necessary to review design and implementation options with attention to their appropriateness to the country and to the risks associated with each option. In interventions where program design and choice of policy options did not adequately factor in risk issues in design and implementation, such as in the power sector and in strengthening the capacity of anti-corruption institutions, un- anticipated consequences led to weak outcomes. In the unbundling of the power sector, for example, weak assessment of the risk associated with supply failure was behind the poor outcome of both World Bank and AfDB assistance. Support for policy reforms aimed at broad-based governance outcomes, such as the re- duction in public sector corruption, needs to be built on an understanding of the causal links between the interventions and their expected outcomes. The assistance that the World Bank and the AfDB provided on governance was mainly in public financial man- agement— with the objective of improving transparency and accountability in the public sector, thereby helping reduce corruption. Although the strategies and program designs underlying the support were relevant and aligned to the PEAP (and emphasized the com- parative advantage of multilateral institutions), they did not clarify the links between the in- terventions and how they were expected to lead to improved governance. Consequently, although the outputs of the public finance interventions of the two institutions were sub- stantial (as noted by satisfactory project implementation), their impact on the reduction of corruption was not clear. Building effective institutions requires proper sequencing of reforms, sufficient time, and adequate risk analysis. The assistance strategies of both banks prioritized building in- stitutions, either new or by refurbishing existing ones (as, for example, with reforms in the power sector). The rapid expansion in institution-building was not always accompanied by 85 CHAPTER 8 CONCLUSIONS AND RECOMMENDATIONS comparable gains in outcomes because insufficient time was provided for the process to take root. Building institutions required legislation, adequate staffing, and leadership, which usually took longer to assemble than could be anticipated in the original programs. In addition, a better understanding of the political context and a focus on basic risk analysis could have helped define a more realistic time horizon. The untimely sequencing of policy measures in an environment undergoing major re- forms (as in the social sectors in Uganda) can lead to underperformance. Uganda has been at the forefront of development policy initiatives, especially in human development. How- ever, the development outcome does not quite measure up. One reason may be the re- peated introduction by the government of policy measures that may be desirable but are out of line with the agreed medium and long-term strategic planning framework. Some of these often rather sudden initiatives, such as universal primary education, universal secondary education, the abolition of user fees for basic health services, and salary increases for teach- ers and health workers beyond planned levels, affected the social sectors directly by reduc- ing the effectiveness of ongoing reforms. Others have indirect bearing by decreasing budge- tary space for allocations to basic service delivery. Examples include the abolition of the graduated tax and the creation of new districts with associated high costs and capacity building challenges. In order to optimize aid effectiveness, the focus should be on improving aid predictabili- ty, resolving issues of coordination among the large number of donors, and resolving aid fragmentation. Uganda’s efforts at aligning donors behind the PEAP, promoting the movement to joint assistance programs among donors (the UJAS), and seeking broader use of the GBS instrument have helped improve the predictability of aid flows, initiated discus- sion on coordination and division of labor among donors, and will likely help reduce frag- mentation (that is, the proliferation of donor-funded activities). Recommendations Two sets of recommendations are provided: one for the World Bank and the other for the AfDB. The recommendation applies to both banks. They build on the lessons discussed above and the recommendations provided in the 2001 IEG-Uganda CAE for the World Bank and the 2004 OPEV-CAE for the AfDB (Chapter 1). In both previous cases, the recommen- dations were not fully implemented, especially those with respect to the World Bank taking a stronger stance on governance, and the AfDB deepening its economic and sector work. For the World Bank:  Support the government in developing an analytic framework to guide decisions on governance reforms. Such a framework will help define the causal links between various interventions and expected outcomes for improved governance.  With the help of other development partners, encourage and support the govern- ment to develop medium-to-long-term master plans for infrastructure development in order to promote private sector participation, competition, and regulatory reform, and to enhance the process of timely institutional building. 86 CHAPTER 8 CONCLUSIONS AND RECOMMENDATIONS  Encourage the government to coordinate major ongoing monitoring and evaluation initiatives by its development partners in order to secure reliable M&E of its overall poverty reduction strategy, thereby helping to facilitate adequate sequencing of poli- cy reform. For the AfDB:  Strengthen the AfDB’s in-country presence by relocating sector specialists. This would raise its profile and ensure improved policy dialogue, and is particularly im- portant in the areas where the AfDB plans to stay engaged. To avoid spreading AfDB’s staff too thinly, one option may be to deploy sector specialists to regional hubs.  To use limited resources more effectively, seek deeper engagement in a limited set of areas.  Undertake regular, perhaps joint, economic and sector work and project-level, self- evaluation that is sufficient to underpin country strategy and deepen dialogue with the government. For both the World Bank and the AfDB:  Seek to reinforce the effectiveness of the GBS as an instrument for minimizing trans- action costs and facilitating the use of country systems, as channeling funds through the recipient country’s institutions helps strengthen the governance structures and capacities and facilitate aid harmonization. This will require a greater focus on reaching agreement with other UJAS members on a joint budget support mechanism and assisting the government in budget prioritization, monitoring, and evaluation. 87 Annex A: Statistical Supplement Table 1 Uganda at a Glance Table 2 Uganda: Economic and Social Indicators, 2000-2006 Table 3 Uganda: External Assistance to Uganda, Total Net ODA Dis- bursements, 2001-2006 Uganda: World Bank Commitments by Sector, Fiscal years Table 4a: Part 1 2001-07 Uganda: World Bank Commitments by Sector, for PRSCS, fis- Table 4a: Part 2 cal years 2001-07 Table 4b Uganda: African Development Bank Commitments by Sector, fiscal years 2002-07 Uganda: List of Approved World Bank Projects, fiscal years Table 5a 2001-07 Table 5b Uganda: List of Approved African Development Bank Projects, Fiscal years 2002-07 Table 6 Uganda: Economic and Sector Work, Fiscal years 2001-07 Table 7 Uganda: Cost of World Bank Programs, Fiscal years 2001-07 Table 8a Uganda: World Bank Evaluation Findings by Sector Board (Exit Year 2001-2007) Table 8b Uganda: AfDB Summary Findings of Evaluated Projects, 2001-2008 Table 9 Uganda: Portfolio Status Indicators: Uganda and Compari- sons Fiscal years 2001-07 Table 10 Uganda: Bank’s Senior Management CY2000-2007 Table 11 Uganda: Millennium Development Goals Annex Tables for IFC Table 12-1 IFC Activities in Uganda, Fiscal years 1999–08 Table 12-2 IFC Investment Portfolio Fiscal years 1999–2008 Table 12-3 Sector Breakdown of IFC Investments in Uganda and its Neighboring Countries, Fiscal years 1999–2008 Table 12-4 List of IFC Advisory Services in Uganda, Fiscal years 1999- 2008 Table 12-5 Business Line Breakdown of IFC Advisory Services in Ugan- da and its Neighboring Countries, Fiscal years 2005-08 Table 12-6 IFC Disbursed and Committed Balance in Uganda and Coun- tries with Similar Level of Country Risk Table 12-7 FDI Inflows into Uganda and its Neighboring Countries 89 ANNEX A STATISTICAL SUPPLEMENT Annex Table 1: Uganda at a Glance Sub- Key Development Indicators Saharan Low Age distribution, 2006 Uganda Africa income (2006) Male Female Population, mid-year (millions) 29.9 770 2,403 70-74 Surface area (thousand sq. km) 241 24,265 29,215 60-64 Population growth (%) 3.6 2.3 1.8 50-54 Urban population (% of total population) 13 36 30 40-44 30-34 GNI (Atlas method, US$ billions) 8.9 648 1,562 20-24 GNI per capita (Atlas method, US$) 300 842 650 10-14 GNI per capita (PPP, international $) 1,490 2,032 2,698 0-4 GDP growth (%) 5.3 5.6 8.0 30 20 10 0 10 20 30 GDP per capita growth (%) 1.5 3.2 6.1 percent (most recent estimate, 2000–2006) Poverty headcount ratio at $1 a day (PPP, %) .. 41 .. Under-5 mortality rate (per 1,000) Poverty headcount ratio at $2 a day (PPP, %) .. 72 .. Life expectancy at birth (years) 50 47 59 200 Infant mortality (per 1,000 live births) 79 96 75 Child malnutrition (% of children under 5) 23 29 .. 150 Adult literacy, male (% of ages 15 and older) 77 69 72 100 Adult literacy, female (% of ages 15 and older) 58 50 50 Gross primary enrollment, male (% of age group) 119 98 108 Gross primary enrollment, female (% of age group) 119 86 96 50 0 Access to an improved water source (% of population) 60 56 75 1990 1995 2000 2005 Access to improved sanitation facilities (% of population) 43 37 38 Uganda Sub-Saharan Africa Net Aid Flows 1980 1990 2000 2006 a (US$ millions) Net ODA and official aid 113 663 817 1,198 Growth of GDP and GDP per capita (%) Top 3 donors (in 2005): United States 13 30 58 242 15 Netherlands 4 4 43 80 Denmark 2 25 60 64 10 Aid (% of GNI) 9.2 15.7 14.0 14.0 Aid per capita (US$) 9 37 34 42 5 Long-Term Economic Trends 0 90 95 00 05 Consumer prices (annual % change) .. 45.5 5.8 3.5 GDP implicit deflator (annual % change) 45.9 44.4 3.8 6.7 GDP GDP per capita Exchange rate (annual average, local per US$) 1.0 319.6 1,512.0 1,825.1 Terms of trade index (2000 = 100) .. 132 100 91 1980–90 1990–2000 2000–06 (average annual growth %) Population, mid-year (millions) 12.6 17.8 24.3 29.9 3.4 3.1 3.4 GDP (US$ millions) 1,245 4,304 5,926 9,322 2.9 7.1 5.6 (% of GDP) Agriculture 72.0 56.6 37.3 31.7 2.1 3.7 4.3 Industry 4.5 11.1 20.3 24.6 5.0 12.2 7.0 Manufacturing 4.3 5.7 9.8 8.6 3.9 14.1 5.2 Services 23.5 32.4 42.4 43.7 2.8 8.2 7.7 Household final consumption expenditure 88.9 91.9 78.2 77.6 2.7 6.8 5.6 General gov't final consumption expenditure 11.2 7.5 13.7 14.4 2.0 7.1 5.9 Gross capital formation 6.2 12.7 20.0 24.9 8.0 8.9 10.3 Exports of goods and services 19.4 7.2 11.2 13.8 1.8 14.7 7.8 Imports of goods and services 26.0 19.4 23.0 30.7 4.4 10.0 10.8 Gross savings -1.0 1.2 9.3 11.2 Note: Figures in italics are for years other than those specified. 2006 data are preliminary. .. indicates data are not available. a. Aid data are for 2005. Source : Development Economics, Development Data Group (DECDG), 9/28/07. 90 ANNEX A STATISTICAL SUPPLEMENT Annex Table 1: Uganda at a Glance (continued) Uganda Balance of Payments and Trade 2000 2006 Governance indicators, 2000 and 2006 (US$ millions) Total merchandise exports (fob) 460 603 Total merchandise imports (cif) 954 1,336 Voice and accountability Net trade in goods and services -703 -1,378 Political stability Workers' remittances and compensation of employees (receipts) 238 476 Regulatory quality Rule of law Current account balance -644 -1,074 as a % of GDP -10.9 -11.5 Control of corruption Reserves, including gold 719 1,025 0 25 50 75 100 2006 Country's percentile rank (0-100) Central Government Finance higher values imply better ratings 2000 (% of GDP) Source: Kaufmann-Kraay-Mastruzzi, World Bank Current revenue (including grants) 11.3 12.6 Tax revenue 10.4 11.7 Current expenditure 10.9 12.0 Technology and Infrastructure 2000 2005 Overall surplus/deficit -13.8 -10.6 Paved roads (% of total) .. 23.0 Highest marginal tax rate (%) Fixed line and mobile phone Individual 30 30 subscribers (per 1,000 people) 8 56 Corporate 30 30 High technology exports (% of manufactured exports) 22.5 14.0 External Debt and Resource Flows Environment (US$ millions) Total debt outstanding and disbursed 3,498 4,463 Agricultural land (% of land area) .. .. Total debt service 74 172 Forest area (% of land area) 20.6 18.4 Debt relief (HIPC, MDRI) 1,282 1,705 Nationally protected areas (% of land area) .. 32.6 Total debt (% of GDP) 59.0 51.1 Freshwater resources per capita (cu. meters) .. 1,353 Total debt service (% of exports) 10.5 10.7 Freshwater withdrawal (% of internal resources) 0.8 .. Foreign direct investment (net inflows) 161 257 CO2 emissions per capita (mt) 0.06 0.06 Portfolio equity (net inflows) 0 2 GDP per unit of energy use (2000 PPP $ per kg of oil equivalent) .. .. Composition of total external debt, 2005 Short-term, Energy use per capita (kg of oil equivalent) .. .. 81.195 Private, 26.71 IBRD, 0 Bilateral, 260.873 World Bank Group portfolio 2000 2006 Other multi- lateral, 821.175 (US$ millions) IBRD Total debt outstanding and disbursed 0 0 IMF, 131.104 Disbursements 0 0 IDA, 3141.495 Principal repayments 0 0 Interest payments 0 0 US$ millions IDA Total debt outstanding and disbursed 2,115 436 Disbursements 190 93 Private Sector Development 2000 2006 Total debt service 9 40 Time required to start a business (days) – 28 IFC (fiscal year) Cost to start a business (% of GNI per capita) – 96.0 Total disbursed and outstanding portfolio 36 12 Time required to register property (days) – 227 of which IFC own account 36 12 Disbursements for IFC own account 0 10 Ranked as a major constraint to business Portfolio sales, prepayments and (% of managers surveyed who agreed) repayments for IFC own account 6 0 Electricity .. 63.3 Tax rates .. 11.0 MIGA Gross exposure 43 43 Stock market capitalization (% of GDP) 0.6 1.2 New guarantees 0 43 Bank capital to asset ratio (%) 9.8 10.3 Note: Figures in italics are for years other than those specified. 2006 data are preliminary. .. indicates data are not available. – indicates observation is not applicable. Source: Development Economics, Development Data Group (DECDG), 9/28/07. 91 ANNEX A STATISTICAL SUPPLEMENT Annex Table 2: Uganda - Economic and Social Indicators, 2000-2007 Uganda Uganda Kenya Ethiopia Malawi DRoC Sub- Low Saha- In- ran come Africa 2000 2001 2002 2003 2004 2005 2006 2007 2000-2007 average Growth and Infla- tion GDP growth (annual 5.6 4.9 6.4 4.7 5.4 6.7 5.1 6.5 5.7 4.0 7.6 2.7 3.1 4.8 5.3 %) GDP per capita 2.5 1.7 3.1 1.4 2.1 3.3 1.7 2.9 2.3 1.4 4.8 0.1 0.2 2.2 3.0 growth (annual %) GNI per capita, Atlas 260. 240.0 230. 230 250. 270 300. 340. 265. 486. 150.0 192 106 640.6 411. method (current 0 0 .0 0 .0 0 0 0 3 .5 .3 9 US$) GNI per capita, PPP 660. 680.0 720. 740 780. 820 870. 920. 773. 1,28 577.5 628 237 1,532. 1,19 (current international 0 0 .0 0 .0 0 0 8 0.0 .8 .5 0 2.5 $) Inflation, consumer 2.8 2.0 -0.3 7.8 3.3 8.2 6.8 6.1 4.6 9.2 7.0 15. 156 .. .. prices (annual %) 7 .7 Composition of GDP Agriculture, value 37.3 36.4 31.0 32. 32.2 32. 31.1 29.0 32.8 28.4 46.0 36. 49. 17.4 28.0 added (% of GDP) 4 8 5 1 Industry, value add- 20.3 20.2 21.6 21. 21.2 18. 18.1 18.2 19.9 18.0 13.3 18. 23. 30.3 26.7 ed (% of GDP) 2 3 7 9 Services, value 42.4 43.4 47.5 46. 46.6 48. 50.7 52.8 47.3 53.6 40.7 44. 27. 52.3 45.3 added (% of GDP) 4 9 8 1 External Accounts Exports of goods 11.2 12.1 11.9 12. 13.7 13. 14.8 13.3 12.8 24.1 13.3 24. 26. 32.2 29.0 and services (% of 4 2 5 0 GDP) Imports of goods 23.0 24.3 26.6 26. 27.6 27. 30.1 32.0 27.2 33.3 29.7 40. 32. 33.2 33.5 and services (% of 6 1 1 3 GDP) Current account -6.1 -6.5 -6.2 -5.7 -4.6 -4.7 -3.4 -6.6 -5.5 -1.2 -5.6 -5.1 .. .. .. balance (% of GDP) Total debt service 1.3 0.9 1.2 1.4 1.5 2.0 1.2 .. 1.4 3.4 1.3 2.5 4.4 3.4 3.2 (% of GNI) Total reserves in 6.2 7.0 6.4 6.8 6.6 5.7 6.3 6.8 6.5 3.3 3.5 3.4 .. 6.9 5.8 months of imports Other Macroeco- nomic Indicators Gross domestic 8.1 6.5 4.7 6.3 8.4 7.6 8.1 5.8 6.9 8.7 6.8 6.1 5.1 16.4 15.5 savings (% of GDP) Gross fixed capital 19.6 18.2 18.9 20. 22.1 21. 23.0 24.1 20.9 17.5 23.1 18. 8.5 17.8 21.2 formation (% of 1 3 6 GDP) Fiscal Accounts Revenue, excluding 11.3 10.8 12.2 12. 12.7 12. 13.3 .. 12.2 19.6 14.3 .. 5.5 .. .. grants (% of GDP) 1 6 General government 13.7 13.8 15.3 14. 14.7 14. 14.7 14.1 14.4 16.7 13.6 12. 7.3 16.1 9.8 final consumption 8 4 6 expenditure (% of GDP) Gross national ex- 111. 112.1 114. 114 113. 113 115. 118. 114. 109. 116.4 114 106 .. .. penditure (% of 9 7 .2 9 .9 3 7 3 2 .3 .3 GDP) Cash surplus/deficit -2.0 -1.0 -3.7 -3.8 -1.5 -0.1 -2.0 .. -2.0 0.6 -7.6 .. -2.0 .. .. (% of GDP) Social Indicators Health Life expectancy at 46.5 .. 47.8 .. .. 50. 50.7 .. 48.7 52.4 51.3 46. 45. 49.6 56.2 birth, total (years) 0 4 2 Immunization, DPT 58.0 61.0 72.0 81. 87.0 84. 80.0 .. 74.7 74.7 63.9 84. 54. 62.2 67.5 (% of children ages 0 0 9 0 12-23 months) Improved water 56.0 .. .. .. .. .. 64.0 .. 60.0 54.0 35.5 69. 45. 56.5 65.8 source (% of popula- 5 5 tion with access) 92 ANNEX A STATISTICAL SUPPLEMENT Uganda Uganda Kenya Ethiopia Malawi DRoC Sub- Low Saha- In- ran come Africa 2000 2001 2002 2003 2004 2005 2006 2007 2000-2007 average Improved sanitation 32.0 .. .. .. .. .. 34.0 .. 33.0 47.0 6.0 59. 21. 23.3 30.5 facilities, rural (% of 0 0 rural pop. with access) Mortality rate, infant 85.0 .. .. .. .. 79. 77.8 .. 80.6 78.5 83.2 83. 129 96.0 87.4 (per 1,000 live 0 3 .0 births) Education School enrollment, 3.9 4.0 4.2 3.3 2.1 1.5 3.3 .. 3.2 47.8 2.0 .. 1.0 15.7 19.4 preprimary (% gross) School enrollment, 125. 127.6 131. 132 124. 117 116. .. 125. 103. 68.9 128 61. 86.4 88.5 primary (% gross) 4 6 .3 0 .9 7 1 2 .4 0 School enrollment, 15.9 16.0 18.6 18. 18.3 18. .. .. 17.6 45.0 21.1 29. 20. 28.5 35.7 secondary (% gross) 6 3 8 6 Population Population growth 3.0 3.1 3.2 3.2 3.2 3.2 3.2 3.4 3.2 2.6 2.7 2.6 2.9 2.5 2.3 (annual %) Population, total 24.7 25.5 26.3 27. 28.0 28. 29.9 30.9 27.7 34.3 72.4 12. 56. 735.5 1,20 (million) 1 9 8 3 1.1 Urban population (% 12.1 12.2 12.3 12. 12.4 12. 12.7 12.8 12.4 20.4 15.8 16. 31. 34.3 30.2 of total) 3 5 7 5 Note 1: Some of these indicators are not available on an annual basis, so some averages are based on fewer observations. Source: World Bank internal database. Notes: DPT=diphtheria, pertussis, and tetanus vaccine; DRoC=Democratic Republic of Congo; GDP=gross domestic product; GNI=gross national income; PPP=purchasing power parity. 93 ANNEX A STATISTICAL SUPPLEMENT Annex Table 3: External Assistance to Uganda, Total Net ODA Disbursement, 2001-2006, (US$ Million) 2001 2002 2003 2004 2005 2006 Total %Total Australia 0.3 0.6 0.5 0.6 0.3 2.8 5.0 0.1 Austria 1.8 5.4 5.4 8.1 8.4 10.3 39.5 0.6 Belgium 3.5 2.1 6.6 8.1 13.3 14.9 48.6 0.8 Canada 2.6 6.4 6.7 10.2 12.8 14.1 52.9 0.8 Czech Republic 0.0 0.0 0.1 0.0 0.3 0.5 0.0 Denmark 58.7 43.1 53.0 61.3 63.7 78.5 358.3 5.6 Finland 0.8 0.8 1.0 2.4 5.3 6.1 16.4 0.3 France 6.5 5.5 4.7 6.2 7.7 5.4 36.0 0.6 Germany 33.2 33.9 26.7 41.8 51.4 54.6 241.4 3.8 Greece 0.1 0.1 0.2 0.1 0.1 0.0 0.5 0.0 Iceland 0.4 0.5 1.0 1.2 1.6 2.3 6.9 0.1 Ireland 23.5 37.0 44.4 47.6 47.8 57.6 257.9 4.0 Italy 3.7 26.7 8.9 8.2 3.9 9.6 61.0 1.0 Japan 14.6 8.1 9.5 11.8 14.4 21.8 80.3 1.3 Korea 0.1 0.3 0.1 0.2 0.1 0.2 1.0 0.0 Luxembourg 0.1 0.1 0.1 0.1 0.1 0.5 0.0 Netherlands 40.8 43.5 57.8 70.9 80.1 82.4 375.5 5.9 New Zealand 0.3 0.2 0.5 0.2 0.6 0.2 1.9 0.0 Norway 19.7 32.6 38.4 41.7 45.5 50.5 228.4 3.6 Slovak Republic 0.0 0.0 0.0 0.0 0.1 0.0 Spain -2.3 2.8 9.8 3.3 -0.6 2.7 15.7 0.2 Sweden 29.4 23.4 32.9 42.7 47.9 62.6 239.0 3.7 Switzerland 0.4 0.6 1.6 3.2 3.4 3.6 12.6 0.2 Poland 0.0 0.0 0.0 0.0 Thailand 0.1 0.1 0.0 Turkey 0.0 0.0 0.0 0.0 United Kingdom 82.2 84.0 104.7 107.6 55.6 214.4 648.5 10.1 United States 66.5 109.4 174.0 207.7 228.8 246.2 1,032.6 16.1 Other Bilateral Donors 0.1 0.1 0.1 0.1 0.1 0.1 0.6 0.0 Total Bilateral Donors 386.9 467.0 588.5 685.4 692.7 941.1 3,761.7 58.8 AfDF (African Dev.Fund) 31.9 17.7 15.2 54.5 59.2 103.6 282.0 4.4 Arab Agencies -0.3 -0.1 3.1 8.5 11.2 0.2 Arab Countries 1.4 4.3 5.7 0.1 European Commission 63.3 33.5 89.4 112.7 83.2 155.5 537.5 8.4 GEF 4.0 3.7 2.8 2.7 3.5 3.3 19.9 0.3 Global Fund (GFATM) 0.3 37.7 41.2 27.7 106.9 1.7 Nordic Dev. Fund 0.3 0.2 1.7 4.3 8.6 2.9 17.9 0.3 IDA 290.5 171.8 265.0 300.4 297.5 255.9 1,581.1 24.7 SAF+ESAF+PRGF (IMF) -38.0 -39.1 -42.1 -52.6 -46.6 2.9 -215.5 -3.4 IFAD 2.5 3.3 3.4 5.9 6.2 5.3 26.6 0.4 UNDP 4.3 4.0 4.5 5.4 6.1 7.1 31.4 0.5 UNFPA 4.8 5.4 6.2 5.3 3.8 5.7 31.2 0.5 UNHCR 12.4 14.7 12.0 9.3 6.6 8.2 63.2 1.0 UNICEF 5.4 5.0 5.4 7.8 9.6 11.7 44.8 0.7 UNTA 2.2 3.3 4.3 2.9 2.9 1.6 17.2 0.3 WFP 18.9 14.9 19.6 12.3 9.7 75.4 1.2 DAC Countries, Total 790.4 709.7 976.1 1,193.8 1,177.5 1,550.6 6,398.0 100.0 G7, Total 209.3 273.9 335.1 393.5 374.8 566.0 2,152.6 33.6 DAC EU Members, Total 282.0 308.2 356.1 408.5 384.9 599.1 2,338.8 36.6 Non-DAC Bilateral Donors,Total 2.0 5.3 1.3 1.6 2.0 2.9 14.9 0.2 Multilateral, Total 402.1 238.3 387.6 508.4 484.8 609.5 2,630.7 41.1 All Donors, Total 790.4 709.7 976.1 1,193.8 1,177.5 1,550.6 6,398.0 100.0 Source: World Bank internal database. Notes: AfDB= African Development Bank; DAC= Development Assistance Committee of the Organisation for Economic Co-operation and Development; ESAF=Enhanced Structural Adjustment Facility; EU=European Union;G7=Group of Seven Industrialized Countries’ meet- ings; GEF=Global Environment Facility; GFATM= Global Fund to Fight AIDS, Tuberculosis, and Malaria; IDA=International Development Association; IFAD= International Fund For Agricultural Development; IMF= International Monetary Fund; ODA=official development assis- tance; PRGF=Poverty Reduction and Growth Facility; SAF=Structural Adjustment Facility; UNDP=United Nations Development Programme; UNFPA=United Nations Population Fund; UNHCR=United Nations High Commissioner for Refugees; UNTA= United Nations Technical Au- thority; WFP= United Nations World Food Programme. 94 ANNEX A STATISTICAL SUPPLEMENT Annex Table 4a-Part 1: Uganda: World Bank Commitments by Sector (US$ Million), Fiscal years 2001–07 Sector 2001 2002 2003 2004 2005 2006 2007 2001-07 Agriculture, Fishing and Forestry 34.7 3.9 26.3 22.5 37.0 16.2 6.3 146.8 Public Administration, Law, and Justice 119.7 3.7 92.9 85.1 54.5 148.9 68.5 573.3 Information and Communications 0.0 5.4 0.0 0.0 0.0 0.0 0.0 5.4 Education 32.5 5.0 75.0 23.2 30.0 35.7 18.8 220.1 Finance 4.8 0.0 0.0 0.0 10.5 0.0 0.0 15.3 Health and Other Social Services 97.9 3.9 122.6 26.3 30.0 16.2 18.8 315.7 Industry and Trade 5.3 0.0 0.0 0.0 28.0 1.8 0.0 35.1 Energy and Mining 0.0 94.8 0.0 10.0 0.0 0.0 294.0 398.8 Transportation 12.0 63.9 18.8 0.0 107.6 0.0 0.0 202.2 Water, Sanitation and Flood Protection 31.5 0.0 71.0 22.5 30.0 16.2 18.8 189.9 Total Commitments 338.4 180.7 406.5 189.6 327.6 235.0 425.0 2,102.8 Source: World Bank internal database. 95 ANNEX A STATISTICAL SUPPLEMENT Annex Table 4a-Part 1: Uganda: World Bank Commitments by Sector (percentages), Fiscal years 2001-07 r2001- Sector 2001 2002 2003 2004 2005 2006 2007 07 Agriculture, Fishing and Forestry 10.2 2.2 6.5 11.9 11.3 6.9 1.5 7.0 Public Administration, Law, and Justice 35.4 2.1 22.8 44.9 16.6 63.4 16.1 27.3 Information and Communications 0.0 3.0 0.0 0.0 0.0 0.0 0.0 0.3 Education 9.6 2.8 18.5 12.3 9.2 15.2 4.4 10.5 Finance 1.4 0.0 0.0 0.0 3.2 0.0 0.0 0.7 Health and Other Social Services 28.9 2.2 30.2 13.8 9.2 6.9 4.4 15.0 Industry and Trade 1.6 0.0 0.0 0.0 8.5 0.8 0.0 1.7 Energy and Mining 0.0 52.5 0.0 5.3 0.0 0.0 69.2 19.0 Transportation 3.5 35.4 4.6 0.0 32.8 0.0 0.0 9.6 Water, Sanitation and Flood Protection 9.3 0.0 17.5 11.9 9.2 6.9 4.4 9.0 Total Commitments 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: World Bank internal database. 96 ANNEX A STATISTICAL SUPPLEMENT Annex Table 4a-Part 2: Uganda: World Bank Commitments by Sector for PRSCs (US$ Million) Fiscal years 2001-07 2001 2003 2004 2005 2006 2007 2001-07 PRSC PRSC PRSC PRSC PRSC PRSC PRSC 1-6 Sector 1 2 3 4 5 6 Agriculture, Fishing and Forestry 0.0 0.0 22.5 30.0 16.2 6.3 75.0 Public Administration, Law, and Justice 43.5 30.0 60.0 30.0 70.2 62.5 296.2 Information and Communications 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Education 31.5 30.0 22.5 30.0 16.2 18.8 149.0 Finance 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Health and Other Social Services 31.5 60.0 22.5 30.0 16.2 18.8 179.0 Industry and Trade 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Energy and Mining 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Transportation 12.0 0.0 0.0 0.0 0.0 0.0 12.0 Water, Sanitation and Flood Protection 31.5 30.0 22.5 30.0 16.2 18.8 149.0 Total Commitments 150.0 150.0 150.0 150.0 135.0 125.0 860.0 Source: World Bank internal database. Note: PRSC= Poverty Reduction Support Credit Annex Table 4a-Part 2: Uganda: World Bank Commitments by Sector for PRSCs (percentage), Fiscal years 2001-07 2001 2003 2004 2005 2006 2007 2001-07 PRSC PRSC PRSC PRSC PRSC PRSC PRSC 1-6 Sector 1 2 3 4 5 6 Agriculture, Fishing and Forestry 0.0 0.0 15.0 20.0 12.0 5.0 8.7 Public Administration, Law, and Justice 29.0 20.0 40.0 20.0 52.0 50.0 34.4 Information and Communications 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Education 21.0 20.0 15.0 20.0 12.0 15.0 17.3 Finance 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Health and Other Social Services 21.0 40.0 15.0 20.0 12.0 15.0 20.8 Industry and Trade 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Energy and Mining 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Transportation 8.0 0.0 0.0 0.0 0.0 0.0 1.4 Water, Sanitation and Flood Protection 21.0 20.0 15.0 20.0 12.0 15.0 17.3 Total Commitments 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: World Bank internal database. Note: PRSC= Poverty Reduction Support Credit 97 ANNEX A STATISTICAL SUPPLEMENT Annex Table 4b: Uganda: AfDB Commitments by Sector (in UA million), Fiscal years 2002-07 Sector 2002 2003 2004 2005 2006 2007 2002-07 Agriculture and Rural development 48.5 0.0 48.2 0.0 0.0 30.0 126.7 Social 0.0 0.0 0.0 20.0 20.0 0.0 40.0 Transport 0.0 0.2 0.0 28.5 33.0 58.0 119.7 Water and Sanitation 0.0 0.0 18.4 40.0 0.0 0.0 58.4 Industry 5.3 0.0 5.4 0.0 0.0 0.0 10.7 Power 0.0 0.0 0.0 0.0 0.0 86.9 86.9 Multi-sector 40.6 0.0 9.0 0.0 0.0 0.0 49.6 Total Commitments 94.5 0.2 80.9 88.5 53.0 174.9 492.0 Source: AfDB internal database. Notes: AfDB= African Development Bank. Annex Table 4b: Uganda: AfDB Commitments by Sector (percentages), Fiscal years 2002-07 Sector 2002 2003 2004 2005 2006 2007 2002-07 Agriculture and Rural development 51.4 0.0 59.5 0.0 0.0 17.2 25.8 Social 0.0 0.0 0.0 22.6 37.7 0.0 8.1 Transport 0.0 100.0 0.0 32.2 62.3 33.2 24.3 Water and Sanitation 0.0 0.0 22.7 45.2 0.0 0.0 11.9 Industry 5.6 0.0 6.6 0.0 0.0 0.0 2.2 Power 0.0 0.0 0.0 0.0 0.0 49.7 17.7 Multi-sector 43.0 0.0 11.1 0.0 0.0 0.0 10.1 Total Commitments 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: AfDB internal database. Note: AfDB= African Development Bank. 98 Annex Table 5a: Uganda List of World Bank Projects, Fiscal years 2001 07 Net Comm./ IDA Latest Date, Project Appr. Sector amount Latest Latest Appr. Proj ID TL Risk Rev IEG Outcome IEG Sustainability IEG ID Impact Status FY Board DO IP period Rating Closng Active P002970 UG-Roads Dev APL (FY99) 1999 Transport OCAYA 91.0 S S # 06/30/2008 A Active P059127 UG-Agr Rsrch & Training SIL 2 (FY99) 1999 Rural Sector GAUTAM 26.0 S MS # 06/30/2009 A Active P044695 UG-Nat Agr Advisory Srvcs SIL (FY01) 2001 Rural Sector CORNELIUS 45.0 S MS # 06/30/2008 B Active P050439 UG-Priv & Utility Sec Reform (FY01) 2001 Private Sector Development SCHLOTTERER 48.5 S S # 02/15/2015 B Active P070627 Regional Trade Fac. - Uganda 2001 Financial Sector ARCHONDO 20.0 S MS # 06/30/2011 B Active P073089 UG-EMCBP SIL 2 (FY01) 2001 Environment JOHNSON 22.0 S S # 06/30/2008 B Active P002984 UG-Power SIL 4 (FY02) 2002 Energy and Mining MISSFELDT-RINGIUS 62.0 MS MS # 12/31/2007 B Active P065436 UG-Road Dev Phase 2 APL (FY02) 2002 Transport SCHELLING 64.5 S S # 06/30/2008 B Active P069996 UG-Energy for Rural Transform (FY02) 2002 Energy and Mining COSGROVE-DAVIES 49.2 S MS # 08/31/2008 B Active P002952 UG-N Uganda Soc Action Fund (FY03) 2003 Social Protection NAMARA 100.0 S MS # 03/31/2009 B Active P065437 UG-PAMSU SIL (FY03) 2003 Environment JOHNSON 27.0 S MS # 12/31/2007 B Active P079925 UG-Natl Re Dev TAL (FY04) 2004 Energy and Mining SHELDON 25.0 S S # 06/30/2009 C Active P074079 UG-Road Dev APL 3 (FY05) 2005 Transport SCHELLING 107.6 MS U # 12/31/2009 B Active P083809 Priv Sec Competitiveness 2 2005 Private Sector Development WONG 70.0 MS MS # 07/31/2010 C Active P050440 UG-Pub Serv Perform Enhance (FY06) 2006 Public Sector Governance MORIN 70.0 MU MU # 12/31/2011 D Active P086513 UG-Millennium Science Init (FY06) 2006 Education CRAWFORD 30.0 S S # 12/31/2011 D Active P069208 UG - Power Sector Dev. Project (FY07) 2007 Energy and Mining COSGROVE-DAVIES 300.0 S S # 07/31/2011 D Closed P002929 UG POWER III 1991 Energy and Mining DUNCAN 144.9 S S M 12/31/2001 MODERATELY UNSAT UNLIKELY MODEST A Closed P002938 AGRIC. RES & TRG. PHASE I 1993 Rural Sector QUISUMBING 25.2 S S N 09/30/2000 SATISFACTORY NON-EVALUABLE SUBSTANTIAL A Closed P002953 PRIMARY EDUC. & TEAC 1993 Education MURPHY 52.1 S HS N 06/30/2001 MODERATELY SAT LIKELY SUBSTANTIAL A Closed P002957 UG-Small Towns Water (BD FY94) 1994 Water Supply and Sanitation ALEMU 40.9 S S M 06/30/2003 SATISFACTORY LIKELY HIGH A Closed P002923 TRANSPORT REHABILITATION PROJECT 1994 Transport KAMHI 53.3 S S M 12/31/2000 SATISFACTORY LIKELY SUBSTANTIAL A Closed P002963 Sexually Transmitted Infections 1994 Health, Nutrition and Population OKWERO 48.9 S S S 12/31/2002 MODERATELY UNSAT LIKELY SUBSTANTIAL A Closed P002977 Cotton Subsector Development Project 1994 Rural Sector CORNELIUS 13.8 S S M 12/31/2001 SATISFACTORY HIGHLY LIKELY HIGH A Closed P002971 District Health 1995 Health, Nutrition and Population OKWERO 40.5 S S S 12/31/2002 UNSATISFACTORY LIKELY SUBSTANTIAL A Closed P002976 INST. CAPACITY BLDG 1995 Public Sector Governance GIRISHANKAR 33.4 S S M 06/30/2002 SATISFACTORY HIGHLY LIKELY SUBSTANTIAL A Closed P037582 AG SEC MGT PROJECT 1996 Rural Sector DEJENE 17.9 S S S 12/31/2001 A Closed P002978 EMCBP 1996 Environment JOHNSON 9.3 S S M 06/30/2001 SATISFACTORY LIKELY SUBSTANTIAL A Closed P035634 PRIV. SECTOR COMPETI 1996 Private Sector Development FYE 8.1 S S M 12/31/2002 SATISFACTORY LIKELY HIGH A Closed P046836 UG-Lake Victoria Env SIL (FY97) 1997 Environment CHENGULA 15.8 MS S # 12/31/2005 'MODERATELY SAT LIKELY SUBSTANTIAL A Closed P002987 SAC III 1997 Economic Policy BLAKE 144.4 S S S 12/31/2001 'MODERATELY SAT LIKELY MODEST A Closed P049543 UG-Road Sec & Inst Supt (FY98) 1998 Transport OCAYA 30.0 S S # 12/31/2007 A Closed P002972 UG EDUC SECTOR ADJ CRED 1998 Education MURPHY 151.8 S S N 12/31/2000 SATISFACTORY LIKELY SUBSTANTIAL A Closed P040551 UG-Child Nutrition Dev SIL (FY98) 1998 Health, Nutrition and Population BERTONCINO 32.7 MS MU # 06/30/2005 MODERATELY UNSAT UNLIKELY SUBSTANTIAL A Closed P057007 UG EL NINO EMERG RD REP 1998 Transport BRUSHETT 6.5 S S N 01/31/2004 SATISFACTORY LIKELY MODEST A Closed P002941 ICB-PAMSU 1999 Rural Sector JOHNSON 12.0 S S M 12/31/2002 'MODERATELY SAT LIKELY SUBSTANTIAL A Closed P059223 UG-Nakivubo Channel Rehab SIl (FY99) 1999 Urban Development MORRELL 21.7 S S N 06/30/2004 SATISFACTORY LIKELY MODEST A Closed P044213 FIN MKTS ASSISTANCE 1999 Financial Sector BYAMUKAMA 0.0 S U M 09/30/2003 NOT RATED NOT APPLICABLE NOT RATED A Closed P069840 Power III Supplemental 2000 Energy and Mining DUNCAN 33.0 # # # # A Closed P002992 UG-Loc Govt Dev Prgm SIL (FY00) 2000 Public Sector Governance MORRELL 73.8 S S M 06/30/2004 SATISFACTORY UNLIKELY SUBSTANTIAL A Closed P044679 UG-Econ & Fin Mgmt (FY00) 2000 Public Sector Governance MORRELL 50.2 S S # 12/31/2006 SATISFACTORY # # A Closed P072482 UG-HIV/AIDS Control SIL (FY01) 2001 Health, Nutrition and Population OKWERO 47.5 MS S # 12/31/2006 MODERATELY UNSAT # # B Closed P073346 Oil Shock Supplemental - SAC III 2001 Economic Policy KAHKONEN 25.4 # # # # A Closed P050438 UG-PRSC 1 (FY01) 2001 Public Sector Governance KAHKONEN 147.7 S S S 03/31/2002 'MODERATELY SAT NON-EVALUABLE MODEST B Closed P074078 UG-Makerere Pil Decentr Srvc Del (FY02) 2002 Education CRAWFORD 5.0 S S # 12/31/2006 SATISFACTORY # # B Closed P077477 UG-Loc Gov Dev 2 (FY03) 2003 Public Sector Governance ONYACH-OLAA 125.0 S S # 12/31/2007 B Closed P077406 UGANDA LVEMP Supplemental 2003 Environment KAGUAMBA 4.5 # # # # A Closed P073671 UG-PRSC II 2003 Poverty Reduction CANAGARAJAH 169.4 S S S 06/30/2003 'MODERATELY SAT NON-EVALUABLE MODEST B Closed P083597 UGANDA - EFMP II - Supplemental 2004 Public Sector Governance MORRELL 14.6 # # # # A Closed P074081 UG-PRSC 3 (FY04) 2004 Public Sector Governance BOCCARA 152.9 S S S 09/30/2004 MODERATELY SAT NON-EVALUABLE MODEST C Closed P074082 UG-PRSC 4 (FY05) 2005 Poverty Reduction KIM 155.3 S S S 09/30/2005 MODERATELY UNSAT LIKELY SUBSTANTIAL C Closed P090881 UG-PRSC 5 (new series) 2006 Poverty Reduction KIM 135.0 S S # 11/30/2006 D Closed P090219 UG-PRSC 6 DPL (FY07) 2007 Poverty Reduction KIM 125.0 # # # 11/30/2008 D Source: World Bank internal database. Notes: AGR= agriculture; APL= adjustable program loan; DO= development objective; DPL= Development Policy Loan; EDUC= education; EFMP= Economic and Financial Management Project; EMCBP= Environment Management Capacity Building Project; FY= fiscal year; ID= Institutional Development; IDA= Interna- tional Development Association; IEG= Independent Evaluation Group; LVEMP= Lake Victoria Environmental Management Project; PAMSU= Protected Areas Management and Sustainable Use; PRSC= Poverty Reduction Support Credit; SAC= structural adjustment credit; SIL= specific investment loan; TL= team lead- er; UG= Uganda ANNEX A STATISTICAL SUPPLEMENT Annex Table 5b: Uganda-List of AfDB Projects, Fiscal years 2002-07 Amount Project Approval Appr. in SAP/Proj. # Project Title Sector Task Manager approved Status date Period UA m Active P-UG-AA0-020 Rural Microfinance Support Project (RMSP) 11/24/1999 Social YAHIE Abdullahi Moha 14.9 Before 2002 Active P-UG-IAZ-001 Northwest Smallholder Agricultural Development 12/15/1999 Agr. and Rural dev. KABYEMERA Justus Jos 17.6 Before 2002 Active P-UG-IE0-002 Area-Based Agricultural Modernisation Programme 09/13/2000 Agr. and Rural dev. KABYEMERA Justus Jos 9.7 Before 2002 Active P-UG-AA0-014 Support To The ESIP (Education II Project) 12/21/2000 Social SAVADOGO Boukary 22.4 Before 2002 Active P-UG-AAF-002 Fisheries Development Project 06/12/2002 Agr. and Rural dev. OMOLUABI Abodunrin C 22.0 CSP 02-04 Active P-UG-BC0-001 Sheraton Kampala Hotel 09/18/2002 Industry M'PENG BAYOI Daniel 5.3 CSP 02-04 Active P-UG-AA0-019 Live stock productivity improvement project. 12/04/2002 Agr. and Rural dev. TAWAH Chi Lawrence 26.5 CSP 02-04 Active P-UG-AAC-001 Farm Income Enhancement proj. 09/29/2004 Agr. and Rural dev. OMOLUABI Abodunrin C 41.4 CSP 02-04 Active P-UG-BA0-001 Sustainable management of mineral Resources 09/29/2004 Industry AMU O. M 5.4 CSP 02-04 Active P-UG-KF0-003 Institutional support proj. for good governance 11/17/2004 Multi-sector MUTONGA Jeremiah 9.0 CSP 02-04 Active P-UG-E00-002 Small Towns Water & Sanitation proj. 11/24/2004 Water and Sanitation ASSEFAW Mecuria 18.4 CSP 02-04 Active P-Z1-AZ0-006 Creation of Sustainable Tsetse 12/08/2004 Agr. and Rural dev. TAWAH Chi Lawrence 6.8 CSP 02-04 Active P-UG-IAZ-002 Education III Project -support to post primary 12/19/2005 Social SAVADOGO Boukary 20.0 UJAS 05-07 Active P-UG-E00-005 Rural Water Supply & Sanitation Program 12/19/2005 Water and Sanitation ASSEFAW Mecuria 40.0 UJAS 05-07 Active P-UG-AB0-001 Community Agricultural Infrastructure 01/31/2007 Agr. and Rural dev. Chiji Chinedum OJUKWU 30.0 UJAS 05-07 Hemchand Rai HEEROO Active P-UG-FA0-002 Bujagali Interconnection Project 06/28/2007 Power 19.2 UJAS 05-07 & FARAH A. Active P-UG-FAB-004 Bujagali Hydropower Project 05/02/2007 Power FARAH Hassan 67.7 UJAS 05-07 Active P-UG-DB0-018 Road Sector Support Project II 12/17/2007 Transport BABALOLA Abayomi 58.0 UJAS 05-07 Closed P-UG-IBC-003 Health Services Rehabilitation Project 12/18/1989 Social SARR Baboucarr Sulay 30.3 Before 2002 Closed P-UG-IAE-001 Streng of Scien - Tech Teach Educ Proj 08/28/1990 Social SARR Baboucarr Sulay 14.2 Before 2002 Closed P-UG-DB0-001 Rural Feeder Roads Maintenance Programme 10/30/1991 Transport BABALOLA Abayomi 18.1 Before 2002 Closed P-UG-FA0-001 Urban Power Rehabilitation Project 11/06/1996 Power RAM Babu 18.0 Before 2002 Closed P-UG-K00-002 Second Structural Adjustment Loan 07/16/1997 Multi-sector PITAMBER Sunita 27.8 Before 2002 Closed P-UG-DB0-013 Kyotera-Mutukula Upgrading Project 09/17/1998 Transport BABALOLA Abayomi 8.3 Before 2002 Closed P-UG-KF0-002 Institutional Support To External Aid Coordination 12/16/1998 Multi-sector PITAMBER Sunita 1.5 Before 2002 Closed P-UG-E00-003 Rural Towns Water Supply and Sanitation Study 05/17/2000 Water and Sanitation NJUGUNA Peter Ephrai 1.6 Before 2002 Closed P-UG-DB0-014 Roads Maintenance And Upgrading Project 09/13/2000 Transport BABALOLA Abayomi 15.0 Before 2002 Closed P-UG-IBA-001 Support to Health Sector Strategic Plan 09/13/2000 Social BA Bineta 20.0 Before 2002 Closed P-UG-FZ0-001 Alt Energy Resources Assess and Utilization Study 10/18/2000 Power RAM Babu 1.7 Before 2002 Closed P-UG-K00-006 Poverty reduction support loan 10/16/2002 Multi-sector PITAMBER Sunita 40.5 CSP 02-04 Closed P-UG-DB0-015 Transport sector Development Programme 01/10/2003 Transport BABALOLA Abayomi 0.2 CSP 02-04 Closed P-UG-DB0-017 Road Sector Support Project 04/27/2005 Transport BABALOLA Abayomi 28.5 UJAS 05-07 Closed P-UG-IB0-003 Support to Health Sector Strategic Plan 11/08/2006 Social BA Binta 20.0 UJAS 05-07 Closed P-UG-DB0-019 Road Sector Support Project (Supplement) 12/20/2006 Transport BABALOLA Abayomi 33.0 UJAS 05-07 Source: AfDB internal database. Notes: AfDB= African Development Bank; CSP= Country Strategy Paper; ESIP= Education Sector Improvement Plan; UJAS= Uganda Joint Assis- tance Strategy. 100 ANNEX A STATISTICAL SUPPLEMENT Annex Table 6: Uganda – World Bank Economic and Sector Work, Fiscal years 2001-07 ID/Report FY Proj ID Sector Board TL Appr. Period number FY01 REV OF URB WATER PSP P056562 Urban Development LOCUSSOL B LAND REFORM P061861 Environment BRUCE B CTRY FRAMEWORK PAPER P064518 Private Sector Development SOREL B UGANDA BOOK P067111 Economic Policy REINIKKA B AGR MODERNIZATION P067112 Environment DONOVAN B P074475 Uganda-CFAA Financial Management HEGARTY B /25733 Uganda - CPAR P075089 Procurement KAYANI B FY02 Health Tracking P071279 Health, Nutrition and Population REINIKKA B Uganda PER P072181 Public Sector Governance CANAGARAJAH B Uganda FSAP P074285 Financial Sector MURGATROYD B Budget and Medium Term Expenditure P076756 Poverty Reduction REINIKKA B FY03 Post-primary Education Sector Work P073759 Education LIANG B UG:Debt SUSTAINABILITY(DONOTUSE) P075430 Economic Policy KAHKONEN B HIPC Tracking Update P078561 Economic Policy CANAGARAJAH B Public Expenditure Review: Report on the 24882 Public Sector Governance CANAGARAJAH B progress and challenges of budget reforms FY04 2003 PER 27135 CANAGARAJAH B Uganda-Strategic Country Gender Assessme P078153 Gender and Development BLACKDEN C UG-Export Grwth & Competitiveness (FY04) P078571 Economic Policy WONG C UG-Health Sector Performance (FY04) P080605 Health, Nutrition and Population CHAO C RPED-Uganda Investment Climate Assessmen P080973 Private Sector Development MBUYI C UGANDA: Trade Export Competitiveness P082772 Economic Policy KRAUS C UG-PER/CFAA/CPAR/LGIFA (FY04) P083315 Public Sector Governance CANAGARAJAH C Tertiary Education Sector Report P084486 Education LIANG C UGANDA CFAA (Integrated with P083315) P086031 Financial Management KOEN C UGANDA CPAR (Integrated with P083315), P086295 Procurement KAYANI C 3 volumes Uganda PRSC Stocktaking P087571 Economic Policy MURPHY C FY05 Uganda Poverty-Nat Res Mgmt Analysis P081862 Environment HAMILTON C UG-Poverty Assessment (FY05) P087506 Poverty Reduction FOX C GPOBA-SL3: UEDC Transit Tariff (FY05) P088818 Private Sector Development RASMUSSEN C UG-PER (FY05) P090217 Public Sector Governance KIM C UG-Wtr Sup Deliv Impact Asmt (FY05) P090964 Water Supply and Sanitation BROWN C UG-ROSC AAR Report (FY05) P091017 Financial Management KOEN C FSAP Update Uganda P091045 Financial Sector FUCHS C UG-Conflict Analysis Policy Note (FY05) P092393 Social Development HARBORNE C AML/CFT Assessment Uganda P093660 Financial Sector GREENBERG C LKD Uganda Legal & Judicial Sector Assmt P093773 Sector Board not Applicable KANE C FY06 UG-DTIS (FY06) P090242 Economic Policy KRAUS D UG-Debt Sustainability Analysis (FY06) P086142 Economic Policy KIM D Uganda - Insolvency ROSC P094114 Financial Sector ROUILLON D UG-FINANCIAL SECTOR FOLLOW-UP P096281 Financial Sector RUPAREL D FY07 UG-PER (FY07) P078025 Public Sector Governance MEROTTO D UG-CIDA Health Systems Support (FY07) P078591 Health, Nutrition and Population OKWERO D UG-CEM (FY06) P090218 Economic Policy MEROTTO D UG-Northern Uganda Review P101771 Economic Policy MPUGA D Note: A=Pre-2000 CAS Period, B=CAS Period, C=Extended CAS Period, D=UJAS Period. S f Source: World Bank internal database. Note: AML/CFT= anti-money laundering/ combating the financing of terrorism; CEM= Country Economic Memorandum; CFAA= Country Financial Ac- countability Assessment; CPAR=Country Procurement Assessment Report/Review; DTIC= Diagnostic Trade Integration Study; FSAP= Financial Sector Assessment Program; HIPC= Highly-Indebted Poor Countries; LGIFA= Local Government Integrated Fiduciary Assessment; PER= public expenditure review; PRSC= Poverty Reduction Support Credit; PSP= private sector participation; ROSC=Reports on the Observance of Standards and Codes; RPED= Regional Program on Enterprise Development (World Bank); UEDC= Uganda Electricity Distribution Company. 101 ANNEX A STATISTICAL SUPPLEMENT Annex Table 7-Part 1: Uganda- Cost of World Bank Programs, Fiscal years 2001–07 (US$ Thousands) Cost Category f2001 2002 20 f2004 2005 2006 2007 2001–07 (Actual) Uganda Country Services 7,324 5,687 5,474 6,768 7,164 7,799 6,836 47,053 Project Supervision 2,732 2,432 2,892 3,183 3,100 2,820 2,343 19,503 Lending 2,754 2,240 1,524 1,857 2,042 1,824 2,138 14,379 AAA (total) 1,133 553 836 1,313 1,562 2,658 1,993 10,048 AAA (ESW) 699 306 702 1,276 1,494 2,465 1,801 8,743 AAA (TA + aid 434 248 133 37 67 193 193 1,305 coordination) Other 705 462 222 415 461 497 361 3,123 Africa Region Country Services 190,138 185,028 217,032 226,026 213,965 209,171 223,794 1,465,154 Project Supervision 42,687 39,965 44,119 48,750 53,780 56,656 65,570 351,526 Lending 66,361 56,970 65,014 65,425 51,983 47,990 48,066 401,808 AAA (total) 51,375 59,889 74,953 74,534 66,613 67,729 70,573 465,667 AAA (ESW) 14,500 20,075 26,000 34,699 35,883 35,444 39,085 205,686 Analytic and advisory activities (TA + aid 36,875 39,814 48,953 39,836 30,730 32,285 31,488 259,981 coord) Other 29,714 28,204 32,946 37,317 41,589 36,797 39,585 246,153 Source: World Bank internal database. Notes: AAA= analytic and advisory services; ESW= economic and sector work; TA=technical assistance. 102 ANNEX A STATISTICAL SUPPLEMENT Annex Table 7-Part 2: Cost of World Bank Programs for Uganda and Comparison Countries Fiscal years 2001–07, (US$ Thousands) AAA AAA AAA (TA + Total Supervision Lending (total) (ESW) aid coord) Other Uganda 47,053 19,503 14,379 10,048 8,743 1,305 3,123 Kenya 44,135 12,386 14,502 12,512 8,401 4,110 4,735 Ethiopia 51,614 19,853 16,127 11,818 10,725 1,093 3,816 Malawi 27,866 10,623 8,382 7,061 4,249 2,812 1,799 Ghana 35,523 14,309 10,097 7,855 5,369 2,486 3,262 DRoC 28,140 7,718 9,366 7,643 1,987 5,513 3,413 Tanzania 53,611 20,358 17,968 10,980 9,971 1,009 4,305 Burundi 15,626 4,812 5,208 4,519 2,629 1,889 1,087 Africa Region 1,465,154 351,526 401,808 465,667 205,686 259,981 246,153 Bank Wide 5,207,822 1,414,139 1,286,719 1,581,854 902,717 679,137 925,111 Cost Structure by Percentage AAA (TA + AAA AAA aid coordina- (ESW) Total Supervision Lending (total) tion) Other Uganda 100 41 31 21 19 3 7 Kenya 100 28 33 28 19 9 11 Ethiopia 100 38 31 23 21 2 7 Malawi 100 38 30 25 15 10 6 Ghana 100 40 28 22 15 7 9 DRoC 100 27 33 27 7 20 12 Tanzania 100 38 34 20 19 2 8 Burundi 100 31 33 29 17 12 7 Africa Region 100 24 27 32 14 18 17 Bank Wide 100 27 25 30 17 13 18 Note: These tables include both Bank Budget and Trust Funds. Source: World Bank internal database. Notes: AAA=analytic and advisory services; DRoC= Democratic Republic of Congo; ESW=economic and sector work; TA=technical assistance. 103 ANNEX A STATISTICAL SUPPLEMENT Annex Table 8a: Uganda- World Bank Evaluation Findings by Sector Board (Exit Year 2001-2007) Total Net Outcome Commitments IDI % Sub- Sustainability % % Satisfac- Evaluated stantial ($) Likely ($) tory ($) Sector Board ($M) Agriculture and Rural Development 51.0 100.0 100 100.0 Economic Policy 144.4 100.0 0 100.0 Education 209.6 100.0 100 100.0 Energy and Mining 144.9 0.0 0 0.0 Environment 25.2 100.0 100 100.0 Financial and Private Sector Development 8.1 100.0 100 100.0 Health, Nutrition and Population 175.2 0.0 100 73.2 Poverty Reduction 324.7 52.2 48 100.0 Public Sector Governance 458.0 100.0 26 31.2 Transport 59.8 100.0 89 100.0 Urban Development 21.7 100.0 0 100.0 Water 40.9 100.0 100 100.0 Uganda Total 1,664 71.4 49.3 76.3 Africa Region 18,380 69.0 42.8 68.9 Bank Wide 127,818 81.7 55.4 82.6 Note: Ratings are weighted by commitments; IDI= Institutional development impact Source: World Bank internal database. Annex Table 8b: AfDB Summary Findings of Evaluated Projects, 2001-2008 % Substantial Institutional Items Evaluated % Satisfactory Outcome % Likely Sustainability Development Impact UA M No Amt No Amt No Amt No Uganda 247.0 11 72 73 69 73 72 73 East Region 732.6 33 55 61 45 55 67 67 ADF Bank Wide 2366.3 136 49 50 45 49 54 55 Bank Wide 4625.9 171 75 61 69 58 76 64 Total Project /Average Source: World Bank internal database. Note: AfDB= African Development Bank. 104 ANNEX A STATISTICAL SUPPLEMENT Annex Table 9: Uganda - Portfolio Status Indicators, Fiscal years 2001—07, (US$ Million) Country 2001 2002 2003 2004 2005 2006 2007 Uganda # Proj 24 23 21 19 20 21 18 Net Comm Amt 1,209.6 864.5 961.2 886.9 1,030.5 1,113.9 1,292.8 # Proj At Risk 1 2 1 6 7 1 2 % At Risk 4.2 8.7 4.8 31.6 35.0 4.8 11.1 Comm At Risk 158.0 95.0 20.0 260.6 336.1 91.0 161.0 % Commit at Risk 13.1 11.0 2.1 29.4 32.6 8.2 12.5 Kenya # Proj 14 13 12 11 12 12 15 Net Comm Amt 804.3 701.0 762.7 629.7 619.7 594.7 901.8 # Proj At Risk 3 5 5 5 2 4 2 % At Risk 21.4 38.5 41.7 45.5 16.7 33.3 13.3 Comm At Risk 187.8 421.5 342.8 290.0 90.0 92.7 55.1 % Commit at Risk 23.4 60.1 44.9 46.1 14.5 15.6 6.1 Ethiopia # Proj 17 18 19 20 22 22 21 Net Comm Amt 1,814.0 1,710.1 1,844.5 1,941.4 1,614.2 2,010.6 1,990.3 # Proj At Risk 3 1 1 3 3 3 2 % At Risk 17.6 5.6 5.3 15.0 13.6 13.6 9.5 Comm At Risk 259.7 59.7 4.9 33.0 217.7 69.0 115.0 % Commit at Risk 14.3 3.5 0.3 1.7 13.5 3.4 5.8 Malawi # Proj 11 9 11 11 12 10 11 Net Comm Amt 399.3 287.7 412.2 371.8 369.0 316.8 371.8 # Proj At Risk 2 3 1 1 4 3 1 % At Risk 18.2 33.3 9.1 9.1 33.3 30.0 9.1 Comm At Risk 60.6 44.3 15.0 48.2 132.6 82.9 60.0 % Commit at Risk 15.2 15.4 3.6 13.0 35.9 26.2 16.1 Ghana # Proj 23 21 17 14 16 16 14 Net Comm Amt 1,045.8 1,207.7 878.3 860.3 1,024.3 1,079.3 810.1 # Proj At Risk 2 1 3 3 3 3 2 % At Risk 8.7 4.8 17.6 21.4 18.8 18.8 14.3 Comm At Risk 52.9 5.0 92.1 149.5 293.1 315.6 82.0 % Commit at Risk 5.1 0.4 10.5 17.4 28.6 29.2 10.1 DRoC # Proj 2 2 7 8 8 10 Net Comm Amt 500.0 504.0 1,240.0 1,332.0 1,407.0 1,737.0 # Proj At Risk 0 0 0 2 3 6 % At Risk 0.0 0.0 0.0 25.0 37.5 60.0 Comm At Risk 0.0 0.0 0.0 160.0 262.0 1,171.0 % Commit at Risk 0.0 0.0 0.0 12.0 18.6 67.4 Africa Region # Proj 359 355 343 334 334 351 364 Net Comm Amt 14,408.9 15,182.1 15,793.2 16,387.7 16,364.8 18,310.4 20,737.7 # Proj At Risk 53 93 65 76 97 77 77 % At Risk 14.8 26.2 19.0 22.8 29.0 21.9 21.2 Comm At Risk 2,429.8 4,088.2 2,937.3 3,174.5 4,300.9 3,241.0 3,881.6 % Commit at Risk 16.9 26.9 18.6 19.4 26.3 17.7 18.7 Bank Wide # Proj 1,457 1,428 1,395 1,346 1,332 1,345 1,347 Net Comm Amt 106,640.7 102,601.3 94,772.5 92,554.3 93,211.7 92,888.8 97,790.5 # Proj At Risk 184 272 218 228 224 188 224 % At Risk 12.6 19.0 15.6 16.9 16.8 14.0 16.6 Comm At Risk 12,539.2 17,385.4 14,141.5 14,742.1 12,552.7 10,849.8 15,175.6 % Commit at Risk 11.8 16.9 14.9 15.9 13.5 11.7 15.5 Source: World Bank Internal Database. Notes: Comm=commitment; Proj= project. 105 ANNEX A STATISTICAL SUPPLEMENT Annex Table 10: Uganda- World Bank’s Senior Management, Calendar Years 2000-2007 Country Manager/ Year Vice President Country Director Resident Representative 2000 Callisto Mavado James Adams Robert R. Blake 2001 Callisto Mavado James Adams Robert R. Blake 2002 Callisto Mavado Judy O’Connor Robert R. Blake 2003 Callisto Mavado Judy O’Connor Robert R. Blake 2004 Callisto Mavado Judy O’Connor Grace M. Yabrudy 2005 Gobind T. Nankani Judy O’Connor Grace M. Yabrudy 2006 Gobind T. Nankani Judy O’Connor Grace M. Yabrudy 2007 Obiageli K. Ezekwesili John McIntire Grace M. Yabrudy Source: World Bank Directories 2000-2007 106 ANNEX A STATISTICAL SUPPLEMENT Annex Table 11: Uganda- Millennium Development Goals 1990 1995 2000 2005 Goal 1: Eradicate extreme poverty and hunger Income share held by lowest 20% .. .. 5.7 .. Malnutrition prevalence, weight for age (% of children under 5) 23.0 25.5 23.0 .. Poverty gap at $1 a day (PPP) (%) .. .. .. .. Poverty headcount ratio at $1 a day (PPP) (% of population) .. .. .. .. Poverty headcount ratio at national poverty line (% of population) .. .. 33.8 37.7 Prevalence of undernourishment (% of population) 24 26 .. 19 Goal 2: Achieve universal primary education Literacy rate, youth total (% of people ages 15-24) 70 .. .. 77 Persistence to grade 5, total (% of cohort) 36 .. 57 .. Primary completion rate, total (% of relevant age group) .. .. 58 57 School enrollment, primary (% net) .. .. .. .. Goal 3: Promote gender equality and empower women Proportion of seats held by women in national parliament (%) 12 18 18 24 Ratio of girls to boys in primary and secondary education (%) 81 .. 92 96 Ratio of young literate females to males (% ages 15-24) 76 .. .. 86 Share of women employed in the nonagricultural sector (% of total nonagricultural em- 35.6 .. .. .. ployment) Goal 4: Reduce child mortality Immunization, measles (% of children ages 12-23 months) 52 57 61 86 Mortality rate, infant (per 1,000 live births) 93 92 85 79 Mortality rate, under-5 (per 1,000) 160 156 145 136 Goal 5: Improve maternal health Births attended by skilled health staff (% of total) 38 38 39 .. Maternal mortality ratio (modeled estimate, per 100,000 live births) .. .. 880 .. Goal 6: Combat HIV/AIDS, malaria, and other diseases Contraceptive prevalence (% of women ages 15-49) 5 15 23 .. Incidence of tuberculosis (per 100,000 people) 161 319 339 369 Prevalence of HIV, female (% ages 15-24) .. .. .. 5.0 Prevalence of HIV, total (% of population ages 15-49) .. .. .. 6.4 Tuberculosis cases detected under DOTS (%) .. 58 49 45 Goal 7: Ensure environmental sustainability CO2 emissions (metric tons per capita) 0.0 0.0 0.1 0.1 Forest area (% of land area) 25 .. 21 18 GDP per unit of energy use (constant 2000 PPP $ per kg of oil equivalent) .. .. .. .. Improved sanitation facilities (% of population with access) 42 .. .. 43 Improved water source (% of population with access) 44 .. .. 60 Nationally protected areas (% of total land area) .. .. .. 32.6 Goal 8: Develop a global partnership for development Aid per capita (current US$) 37 40 34 42 Debt service (PPG and IMF only, % of exports of G&S, excl. workers’ remittances) 78.6 19.5 16.0 10.8 Fixed line and mobile phone subscribers (per 1,000 people) 2 2 8 56 Internet users (per 1,000 people) 0 0 2 17 Personal computers (per 1,000 people) .. 0 2 9 Total debt service (% of exports of goods, services and income) 81.4 19.8 7.8 9.2 Unemployment, youth female (% of female labor force ages 15-24) .. .. .. .. Unemployment, youth male (% of male labor force ages 15-24) .. .. .. .. Unemployment, youth total (% of total labor force ages 15-24) .. .. .. .. Other Fertility rate, total (births per woman) 7.2 6.9 7.0 7.1 GNI per capita, Atlas method (current US$) 320 230 260 280 GNI, Atlas method (current US$) (billions) 5.6 4.7 6.4 8.0 Gross capital formation (% of GDP) 12.7 12.4 20.0 21.2 Life expectancy at birth, total (years) 46 43 45 50 Literacy rate, adult total (% of people ages 15 and above) 56 .. .. 67 Population, total (millions) 17.8 20.9 24.3 28.8 Trade (% of GDP) 26.6 32.6 34.2 40.3 Source: World Bank internal database. Note: Figures in italics refer to periods other than those specified. Notes: CO2= carbon dioxide; DOTS= directly observed treatment, short course; GDP=gross domestic product; GNI= gross national income; HIV/AIDS=human immunodeficiency virus; acquired immune deficiency syndrome; IMF=International Monetary Fund; PPG=public and publicly-guarnateed debt; PPP=purchasing power parity; 107 ANNEX A STATISTICAL SUPPLEMENT Annex Table 12-1: IFC Investments in Uganda, Fiscal years 1999 –2008 (US$ Thousands) Approval Project Project Short Fiscal Project Greenfield Original total Total net No ID Name year Sector Group Size Code commitment commitment 1 009245 AEF Gomba 1999 Agribusiness 5,000 G 1,400 1,400 2 009839 AEF Ladoto 2000 Agribusiness 2,100 G 800 800 3 009924 CelTel Uganda 2000 Infrastructure 19,500 E 4,700 4,700 4 010006 AEF Kabojja 2001 Education 1,253 G 351 351 5 021854 MAL & UML 2005 Finance 1,000 G 1,000 1,000 6 024070 DFCU III 2005 Finance 10,000 G 10,000 10,000 7 024408 Bujagali Energy 2007 Infrastructure 878,100 G 130,000 130,000 8 024679 DFCU-Tier 2 2007 Finance 6,000 G 6,000 6,000 GTFP Orient 9 025226 Bank 2007 Finance 0 E 4,133 4,133 10 026054 Celtel Uganda Li 2007 Infrastructure 40,000 E 20,000 20,000 178,384 178,384 Source: IFC records as of April 30, 2008 Notes; AEF=African Enterprise Fund; DFCU=Development Finance Company of Uganda Limited; GFTP=Global Trade Finance Program (IFC); ID= identification; IFC=International Finance Corporation; MAL= Micro Africa Limited; UML= Uganda Microfinance Limited, E= Existing; G= Greenfield. 108 ANNEX A STATISTICAL SUPPLEMENT Annex Table 12-2: IFC Investment Portfolio, Fiscal years 1999 – 2008 (US$ Thousands) Original App Project total Total net Project fiscal Status Project commit- commit- No. ID Project Short Name year Name Closure date Sector Group Size ment ment 1 691 (SOP) Uganda Sugar 1983 Closed 04/20/2005 Agribusiness 75000 10,376 10,376 2 723 DEV. FINANCE COM 1984 Closed 05/30/2006 Finance 8500 376 376 3 2929 AEF-CLOVERGEM 1992 Active Agribusiness 5060 957 957 4 3676 AEF-NILE ROSES 1993 Closed 07/12/2002 Agribusiness 1200 300 300 5 3162 AEF-RWENZORI 1993 Closed 07/18/2003 Cement & Construction 4800 1,000 1,000 6 3460 JUBILEE 1993 Closed 02/08/2005 Finance 500 98 98 7 4525 AEF-POLYPACK 1994 Closed 01/25/2001 Plastics & Rubber 3400 1,000 1,000 8 4011 AEF-SKYBLUE 1994 Closed 09/15/2004 Tourism 1100 510 510 9 4291 CLOVERGEM CELTEL 1994 Closed 04/27/2006 Infrastructure 16000 5,600 5,600 10 3698 DFCU LEASING 1995 Closed 06/05/2002 Finance 1500 2,323 2,323 11 4484 AEF-RAINBOW 1995 Closed 07/21/2004 Education 1900 789 789 12 4120 AEF Agro Mgmt 1996 Active Chemicals 3500 1,000 950 13 4895 Kasese Cobalt 1996 Closed 09/19/2002 Extractive 110000 19,600 19,600 14 7260 AEF Conrad Plaza 1997 Closed 03/28/2005 Cement & Construction 5050 1,500 1,500 15 7640 AEF Kiwa Indust 1997 Closed 06/03/2005 Cement & Construction 250 250 16 8136 Tilda Uganda 1998 Active Agribusiness 6433 2,400 1,900 17 8727 AEF Mosa Court 1998 Closed 02/15/2005 Cement & Construction 2900 800 800 18 8726 AEF Exec. Invmnt 1998 Closed 03/28/2005 Cement & Construction 3100 1,000 1,000 19 9057 AEF White Nile 1998 Closed 01/31/2008 Agribusiness 657 300 300 20 9245 AEF Gomba 1999 Active Agribusiness 5000 1,400 1,400 21 9839 AEF Ladoto 2000 Closed 02/15/2006 Agribusiness 2100 800 800 22 9924 CelTel Uganda 2000 Closed 04/27/2006 Infrastructure 19500 4,700 4,700 23 10006 AEF Kabojja 2001 Closed 04/27/2006 Education 1253 351 351 24 21854 MAL & UML 2005 Active Finance 1000 1,000 1,000 25 24070 DFCU III 2005 Active Finance 10000 10,000 10,000 26 24408 Bujagali Energy 2007 Active Infrastructure 878100 130,000 130,000 27 24679 DFCU-Tier 2 2007 Active Finance 6000 6,000 6,000 28 25226 GTFP Orient Bank 2007 Active Finance 4,133 4,133 29 26054 Celtel Uganda Li 2007 Active Infrastructure 40000 20,000 20,000 228,563 228,013 Source: IFC records as of April 30, 2008 Note: AEF=African Enterprise Fund; DFCU= Development Finance Company of Uganda Limited; MAL= Micro Africa Limited; UML= Uganda Microfinance Limited; GTFP= Global Trade Finance Program (IFC) 109 ANNEX A STATISTICAL SUPPLEMENT Annex Table 12-3: Sector Breakdown of IFC Investments in Uganda and its Neighboring Countries, Fiscal years 1999 – 2008 (US$ Thousands) Tanzania, Ghana Kenya United Republic of Uganda Share, Share, Share, Share, Sector Group No. US$’000 % No. US$’000 % No. US$’000 % No. US$’000 % Agribusiness 1 12,500.0 6.6 6 5,843.9 3.1 4 13,550.0 16.8 2 2,200.0 1.2 Cement & Con- struction 1 6,000.0 3.2 1 7,300.0 3.9 0.0 0.0 Chemicals 1 400.0 0.2 3 35,500.0 19.1 0.0 0.0 Education 3 2,859.4 1.5 2 854.1 0.5 0.0 1 351.0 0.2 Extractive 1 75,000.0 39.6 0.0 1 0.0 0.0 Finance 7 46,136.5 24.4 7 26,958.2 14.5 5 19,285.5 23.9 4 22,564 11.8 Funds 0.0 1 5,000.0 2.7 0.0 0.0 Industrial prod- ucts 0.0 1 11,500.0 6.2 0.0 0.0 Infrastructure 2 40,000.0 21.1 10 72,119.0 38.9 1 44,000.0 54.6 3 154,700.0 86.7 Pulp & Paper 1 1,700.0 0.9 0.0 0.0 0.0 Tourism 0.0 2 20,500.0 11.0 4 3,700.0 4.6 0.0 Trade 1 4,700.0 2.5 0.0 0.0 0.0 Grand Total 18 189,295.9 100.0 33 185,575.2 100.0 15 80,535.5 100.0 10 178,384.3 100.0 Source: IFC records as of April 30, 2008 Note: IFC=International Finance Corporation. 110 ANNEX A STATISTICAL SUPPLEMENT Annex Table 12-4: IFC Advisory Services in Uganda, Fiscal years 1999 – 2008 APP Total Project Fiscal Primary Business Project Funding, No. ID Project Name Year Line Status US$ 1 Uganda Telecom Limited 1998 Infrastructure Closed .. 1 Environmental Sector Strategy-Bujagali 2000 Infrastructure Closed 180,000 1 504521 Bujagali Hydropower Projects 2000 Infrastructure Closed 25,000 1 504987 Rural Electrification Development Project f 2001 Infrastructure Closed 270,553 1 Business Enabling 530851 Housing Sector Study 2004 Environment Closed 150,000 1 521012 Uganda Village Phone Grameen f 2005 Infrastructure Closed 190,000 1 537272 Housing Sector Study and Assessment 2005 Access To Finance Closed 145,040 1 537645 Bujagali II-TA-Economic Analysis 2006 Infrastructure Active 750,000 1 541103 Uganda Small Scale Infrastructure Project : Electricity f2008 Infrastructure Active 600,000 1 Business Enabling 546265 GEM Uganda GGA Coalition 2007 Environment Active 90,000 1 547925 GEM Business Skills Curriculum for Women Entrepreneurs 2007 Access To Finance Active 166,650 1 548345 Gender Entrepreneurship Markets DFCU Technical Assistance 2007 Access To Finance Active 151,746 1 553485 Uganda Primary Mortgage Market Initiative f 2007 Access To Finance Active 1,630,000 1 Business Enabling 558245 Uganda Investor Outreach Program 2007 Environment Active 456,000 1 560987 Uganda Small Scale Infrastructure Project : Water f 2008 Infrastructure Active 1,307,146 1 Value Addition To 549746 PEP SME-EDI (5 initiatives) 2008 Firms Active 270,749 16 6,382,884 Source: TAAS database as of April 30, 2008 and other IFC databases Notes: APP=approved; DFCU= Development Finance Company of Uganda Limited; EDI= Enterprise Development Initiative; IFC=International Finance Corporation; TA=technical assistance; GEM=Gender Enterprise Markets; GGA=Gender and Growth Assessment; PEP= Private Enterprise Partnership; SME=small and medium enterprises. No Project APP Fiscal Primary Business Project Sta- . ID Project Name year Line tus Total Funding, US$ 1 Value Addition To AMCU Consultants Database design Firms Closed 13,500 1 Uganda Private Water Operators Work- Value Addition To shop Firms Closed 20,425 1 Value Addition To Uganda Private Water Operators Finance Firms Closed 4,800 1 Value Addition To DFCU SMEs Growth Project Firms Closed 115,000 1 Celtel Dealers Finance & Advisory ser- Value Addition To vices Firms Active 117,024 5 270,749 Source: PEP SME-EDI Notes: AMCU=Association of Management Consultants in Uganda; APP= approved; ID- identification; DFCU= Development Finance Company of Ugan- da Limited; SME=small and medium enterprises. No. Project ID Project Name APP Fiscal year Primary Business Line Project Status Total Funding, US$ 1 580 Administrative Barriers Update r 2004 Administrative Barriers Closed 198,692 1 581 Gender and Growth assessment 2005 Investment Climate Closed 192,620 2 391,312 Source: Foreign Investment Advisory Service Note: APP=approved; ID= identification. 111 ANNEX A STATISTICAL SUPPLEMENT Annex Table 12-5: Business Line Breakdown of IFC Advisory Services in Uganda and Its Neighboring Countries, Fiscal year 2005—2008 Ghana Kenya Tanzania, United Republic of Uganda Primary Busi- Share, Share, Share, Share, ness Line No. US$ % No. US$ % No. US$ % No. US$ % Access To Finance 5 3,829,000 30.2 3 599,000 2.4 5 2,509,000 37.3 4 2,093,436 38.2 Business Enabl- ing Environment 0.0 8 5,282,910 21.1 1 138,665 2.1 2 546,000 10.0 Environment and Social Sustaina- bility 2 2,820,790 22.2 11 4,270,243 17.0 3 817,508 12.1 0.0 Infrastructure 3 1,822,721 14.4 5 7,298,465 29.1 2 1,590,000 23.6 4 2,847,146 51.9 Value Addition to Firms 2 2,160,000 17.0 9 6,607,047 26.4 2 1,680,000 24.9 0.0 .. 1 2,050,000 16.2 1 1,000,000 4.0 0.0 0.0 Grand Total 13 12,682,511 100.0 37 25,057,665 100.0 13 6,735,173 100.0 10 5,486,582 100.0 Source: IFC records as of April 30, 2008 Note: IFC= International Finance Corporation. Annex Table 12-6: IFC Disbursed and Committed Balance in Uganda and Countries with Similar Level of Country Risk Fiscal years 1999-2008 Total disbursed YTD Country Average IICCR scores (US$) IFC Committed Balance at end Apr 08 (US$) Uzbekistan 21.1 41,615,567 9,562,908 Yemen 21.2 55,862,181 134,018,495 Laos 21.5 16,797,000 15,130,396 Mozambique 22.5 155,543,623 94,689,501 Nigeria 22.8 794,550,599 706,953,454 Uganda 23.0 97,098,595 168,360,467 Tanzania 23.2 95,485,237 89,865,112 Gabon 23.7 111,000,000 30,000,000 Nepal 24.6 67,657,089 28,986,185 Serbia & Montenegro 24.8 474,986,390 353,010,088 Ecuador 25.2 145,272,826 55,205,212 Kenya 25.3 337,858,674 176,967,328 Pakistan 25.8 1,167,387,979 641,194,809 Ghana 29.4 238,365,612 185,876,853 Note: Balance at end of April 30, 2008 Source: IICCR database; IFC records. Notes: IFC=International Finance Corporation; IICCR= Institutional Investor Country Credit Risk Rating; YTD= year-to-date. 112 ANNEX A STATISTICAL SUPPLEMENT Annex Table 12-7: FDI Inflows into Uganda and its Neighboring Countries FDI Net Inflows per capita, FDI Net Inflows as a Country FDI Net Inflows (BOP, US$M) US$ percentage of GDP (%) 2005 2006 2007 Average 1999–2007 Average 1999–2007 Tanzania 448 475 430 103.7 3.6 Uganda 246 374 433 71.8 2.8 Ghana 145 319 470 81.8 2.3 Kenya 21 56 85 13.8 0.3 Source: World Bank Data Notes: BOP= balance-of-payments; FDI=foreign direct investment; GDP=gross domestic product. 113 Annex B: Guide to Independent Evaluation Group’s (World Bank) Country Assistance Evaluation Methodology This methodological note describes the key elements of the Independent Evaluation Group’s (IEG)(World Bank) country assistance evaluation (CAE) methodology.1 CAEs rate the outcomes of Bank assistance programs, not the Clients’ overall develop- ment progress. A World Bank assistance program needs to be assessed on how well it met its particular objectives, which are typically a subset of the client’s development objectives. If a World Bank assistance program is large in relation to the client’s total development effort, the program outcome will be similar to the client’s overall development progress. However, most World Bank assistance programs provide only a fraction of the total resources de- voted to a client’s development by donors, stakeholders, and the government itself. In CAEs, the Independent Evaluation Group rates only the outcome of the World Bank’s program, not the client’s overall development outcome, although the latter is clearly rele- vant for judging the program’s outcome. The experience gained in the CAEs confirms that World Bank program outcomes some- times diverge significantly from the client’s overall development progress. The CAEs have identified World Bank assistance programs which had:  satisfactory outcomes matched by good client development;  unsatisfactory outcomes for clients which achieved good overall development re- sults, notwithstanding the weak World Bank program; and,  satisfactory outcomes for clients which did not achieve satisfactory overall results during the period of program implementation. Assessments of assistance program outcome and World Bank performance are not the same By the same token, an unsatisfactory World Bank assistance program outcome does not always mean that World Bank performance was also unsatisfactory, and vice-versa. This becomes clearer once we consider that the World Bank’s contribution to the outcome of its assistance program is only part of the story. The assistance program’s outcome is deter- mined by the joint impact of four agents: (a) the client; (b) the World Bank; (c) partners and other stakeholders; and (d) exogenous forces (such as events of nature, international economic shocks, and so on). Under the right circumstances, a negative contribution from 114 Annex B Guide to IEG (World Bank) Country Assistance Evaluation Methodology any one agent might overwhelm the positive contributions from the other three, and lead to an unsatisfactory outcome. 1. The Independent Evaluation Group (World Bank) measures World Bank perfor- mance primarily on the basis of contributory actions the World Bank directly controlled. Judgments regarding World Bank performance typically consider: (i) the relevance and implementation of the strategy; (ii) the design and supervision of the World Bank’s lend- ing interventions; (ii) the scope, quality and follow-up of diagnostic work and other ana- lytic and advisory activities; (iii) the consistency of the World Bank’s lending with its non- lending work and with its safeguard policies; and (iv) the World Bank’s partnership activ- ities. Rating Assistance Program Outcome In rating the outcome (expected development impact) of an assistance program, IEG gauges the extent to which major strategic objectives were relevant and achieved, without any shortcomings. In other words, did the World Bank do the right thing, and did it do it right? Programs typically express their goals in terms of higher-order objectives, such as poverty reduction. The Country Assistance Strategy (CAS) may also establish intermediate goals, such as improved targeting of social services or promotion of integrated rural development, and specify how they are expected to contribute toward achieving the higher-order objec- tive. IEG’s task is then to validate whether the intermediate objectives were the right ones and whether they produced satisfactory net benefits, and whether the results chain specified in the CAS was valid. Where causal linkages were not fully specified in the CAS, it is the evaluator’s task to reconstruct this causal chain from the available evidence, and assess re- levance, efficacy, and outcome with reference to the intermediate and higher-order objec- tives. For each of the main objectives, the CAE evaluates the relevance of the objective, the re- levance of the World Bank’s strategy toward meeting the objective, including the balance between lending and non-lending instruments, the efficacy with which the strategy was implemented, and the results achieved. This is done in two steps. The first is a top-down review of whether the World Bank’s program achieved a particular objective or planned outcome and had a substantive impact on the country’s development. The second step is a bottom-up review of the World Bank’s products and services (lending, analytical and ad- visory services, and aid coordination) used to achieve the objective. Together these two steps test the consistency of findings from the products and services and the development impact dimensions. Subsequently, an assessment is made of the relative contribution to the results achieved by the World Bank, other donors, the government and exogenous fac- tors. Evaluators also assess the degree of client ownership of international development priori- ties, such as the Millennium Development Goals, and World Bank corporate advocacy priorities, such as safeguards. Ideally, any differences on dealing with these issues would be identified and resolved by the CAS, enabling the evaluator to focus on whether the trade-offs adopted were appropriate. However, in other instances, the strategy may be found to have glossed over certain conflicts, or avoided addressing key client develop- 115 Annex B Guide to IEG (World Bank) Country Assistance Evaluation Methodology ment constraints. In either case, the consequences could include a diminution of program relevance, a loss of client ownership, and/or unwelcome side-effects, such as safeguard violations, all of which must be taken into account in judging program outcome. Ratings Scale IEG utilizes six rating categories for outcome, ranging from highly satisfactory to highly unsatisfactory: Highly Satisfactory: The assistance program achieved at least acceptable progress toward all major relevant objectives, and had a best practice development impact on one or more of them. No major shortcomings were identified. Satisfactory: The assistance program achieved acceptable progress toward all major relevant objectives. No best practice achievements or major shortcomings were identified. Moderately Satisfactory: The assistance program achieved acceptable progress toward most of its major relevant objectives. No major shortcomings were identified. Moderately Unsatisfactory: The assistance program did not make acceptable progress toward most of its major relevant objectives, or made acceptable progress on all of them, but either: (i) did not take into adequate account a key develop- ment constraint or (ii) produced a major shortcoming, such as a safeguard violation. Unsatisfactory: The assistance program did not make acceptable progress toward most of its major relevant objectives, and either: (i) did not take into adequate account a key development constraint or (ii) produced a major short- coming, such as a safeguard violation. Highly Unsatisfactory: The assistance program did not make acceptable progress toward any of its major relevant objectives, nor did it take into adequate account a key develop- ment constraint. It also produced at least one major shortcoming, such as a safeguard violation. The institutional development impact (IDI) can be rated at the project level as: high, substan- tial, modest, or negligible. IDI measures the extent to which the program bolstered the client’s ability to make more efficient, equitable and sustainable use of its human, financial, and natu- ral resources. Examples of areas included in judging the institutional development impact of the program are:  the soundness of economic management;  the structure of the public sector, and, in particular, the civil service;  the institutional soundness of the financial sector;  the soundness of legal, regulatory, and judicial systems;  the extent of monitoring and evaluation systems; 116 Annex B Guide to IEG (World Bank) Country Assistance Evaluation Methodology  the effectiveness of aid coordination;  the degree of financial accountability;  the extent of building capacity in nongovernmental organizations; and,  the level of social and environmental capital. IEG is, however, increasingly factoring IDI impact ratings into program outcome ratings, rather than rating them separately. Sustainability can be rated at the project level as highly likely, likely, unlikely, highly unlikely, or, if available information is insufficient, non-evaluable. Sustainability measures the resilience to risk of the development benefits of the country assistance program over time, taking into account eight factors:  technical resilience;  financial resilience (including policies on cost recovery);  economic resilience;  social support (including conditions subject to safeguard policies);  environmental resilience;  ownership by governments and other key stakeholders;  institutional support (including a supportive legal/regulatory framework, and or- ganizational and management effectiveness); and, resilience to exogenous effects, such as international economic shocks or changes in the political and security envi- ronments. At the program level, IEG is increasingly factoring sustainability into program outcome ratings, rather than rating them separately. Risk to Development Outcome. According to the 2006 harmonized guidelines, sustainability has been replaced with a “risk to development outcome,” defined as the risk, at the time of evaluation, that development outcomes (or expected outcomes) will not be maintained (or rea- lized). The risk to development outcome can be rated at the project level as high, significant, moderate, negligible to low, non-evaluable. 117 Annex C: Strategic Objectives and Benchmarks The World Bank The 2001 World Bank Country Assistance Strategy Overall Objective Benchmarks Substantially reduce Poverty in  Reduce proportion of Ugandans below poverty line to 10% by 2017 Uganda by 2017  Increase per capita consumption of poorest 20% I. Actions Which Directly Increase the Ability of the Poor to Raise Their Income Objectives Benchmarks Improved Agricultural Performance  Sustained agricultural sector growth of 4% or more Improve Natural Resource Manage-  Reduce soil erosion ment  Reduce deforestation  Reduce loss of wild life Improved Rural Roads  District roads fully repaired and maintained by 2016 Rural Energy  Increase proportion of rural areas with access to electricity Increase Assets in Poorest Regions  Reduce regional disparities in poverty II. Actions Which Directly Increase the Quality of Life of the Poor Objectives Benchmarks Improved Health Care Services  Immunization ratios (DPT3) to increase to 80% by 2002/03 Increase percentage of health centers with trained staff to 65% by 2002/03 Primary Education  Pupil/teacher ratio of 47 by 2002/03  Pupil/class ratio of 87 by 2002/03  Pupil/book ratio of 3 by 2002/03 Water and Sanitation  Boreholes drilled: 1,500 by 2002/03  Protected springs: 700 by 2002/03  Protected wells: 1,700 by 2002/03 III. Creating a Framework for Economic Growth and Structural Transformation Objectives Benchmarks Sustaining High Rate of Economic  7% real growth Growth Macroeconomic Stability and Incen-  Inflation of 5% tives  Non-appreciating real exchange rate  5 months import coverage Efficient and Equitable Tax System  Increase in revenue to GDP ratio  Reduced fuel levies Poverty Focus of Government Ex-  Increase PAF share of total expenditures to at least 25% by 2002/03 penditures Improved Infrastructure: Power  Separate UEB into entities responsible for generation, transmission, and distribution and provide for private participants at each stage  Investment in new power generation capacity Improved Infrastructure: Main Roads  Increase funding for routine and periodic maintenance  Increase the government share of funding for maintenance Improved Environment for Private  Sustained supervision of commercial banks Sector  Increase financial sector competition  Efficient handling of commercial cases IV. Ensuring Good Governance and Security Objectives Benchmarks Effective Decentralization  Number of districts eligible for District Development Grants under LGDP Strengthen local government system  Enactment of a new local government (Rating) Act 2005 for service delivery  Introduction of alternative sources of local government revenue 118 Annex C Strategic Objectives and Benchmarks Transparent, efficient and poverty-  Implement reform programs for procurement and improved financial accountability focused public expenditure  Develop and implement sustainable pay reform program  Reduction in perceptions of corruption Notes: DPT= diphtheria, pertussis, and tetanus; GDP= gross domestic product; LGDP=Local Government Development Project; PAF=Poverty Action Fund; UEB= Uganda Electricity Board. 119 Annex C Strategic Objectives and Benchmarks The 2005 Uganda Joint Assistance Strategy The World Bank Specific Program Pillar I. Economic Management: Macroeconomic Stability Consistent with Rapid Private Sector Led Growth PEAP Outcomes Indicators Intermediate Results1 Reduce the fiscal deficit from 11.3% of  Uganda Revenue Authority modernized (IT, tax admin processes and methods) by GDP to 8.2% mid- 2007  Agreement on MTEF 2006/2007–2008/2009 and annual budgets throughout UJAS Increased domestic revenue from 12% of period GDP to 13.2%  Poverty Action Fund expenditures and donor projects consistent with PEAP priori ties throughout UJAS period Reduce public expenditure from 23.9% of GDP to 21.8% (indicator and target will be modified) Inflation maintained below 5.0% Increased private sector credit from 7.1% of GDP to 10.4% Reduced net present value of external debt to exports from 305% to 238% Pillar II. Enhancing Production, Competitiveness and Incomes Objective: Increased private sector competitiveness (investment and export) PEAP Outcomes Indicators Intermediate Results Private sector investment rises from 17%  National trade policy implemented by mid-2006 of GDP towards 21% by 2013/14 (me-  World Trade Organization Bill submitted to Parliament by mid-2006 dium target being developed)  Taxation and licensing policies and practices streamlined by mid-2006 Value of exports increases from 12.1% of GDP to 16.1% by 2013/14 (medium target being developed) Objective: Increased and more efficient agriculture production Growth rate of agricultural production  National Agriculture Research System established by mid-2006 rises above the 2003 value of 3.8% (indi-  National Agriculture Advisory Services extended to: cator and target will be modified to ac- - 499 sub counties in 37 districts by mid-2006 commodate for high volatility) - 640 sub counties in 45 districts by mid-2007 - 900 sub counties in 53 districts by mid-2008 Proportion of total agricultural output that  National Land Policy: is marketed grows from 20% towards - Consultations undertaken by mid-2006 70% by 2013/14 (medium target being - Cabinet approval by mid-2007 developed) - Implementation by mid-2008  National Fisheries Authority established by mid-2006 Proportion of total value of agriculture  Licensed private forest plantations in central forest reserves and on private land output that is exported rises covering: - At least 10,000 hectares by mid-2006 Proportion of households with land titles - At least 15,000 hectares by mid-2007 for agriculture production increase from - At least 25,000 hectares by mid-2008 <1% to 1.5% Proportion of households with general land titles increases from 12% to 17% Growth rate of fishery sector rises above 2003 value of 3.8% Value of fish exports rises above 2003 values of US$88 million per year 120 Annex C Strategic Objectives and Benchmarks Objective: Increased and more efficient production of nonagricultural goods and services PEAP Outcomes Indicators Intermediate Results Proportion of value of production of Micro,  Incorporation of strategy for Micro, Small, and Medium-sized enterprises in revised Me- Small, and Medium-sized enterprises (as dium-Term Competitiveness Strategy % of GDP) rises  National Tourism Strategy and Business Plan: Developed by mid-2006, implemented by mid-2007 Less time spent by Micro, Small, and Me-  Mining regulations bill: dium-sized enterprises in obtaining li- - Cabinet approval by mid-2006 censes - Parliament enactment by mid-2007 - Implementation by mid-2008 Increased number of tourists visiting Uganda Increased value of production of mining industry Objective: Strengthened infrastructure in support of increased production of goods and services PEAP Outcomes Indicators Intermediate Results Proportion of roads in good condition ris-  Maintenance of 18,000km/Rehabilitation of 1,500km of district roads by mid-2006 es from 75% to 100%  Uganda National Road Authority - Statute enacted by mid-2006 Proportion of rural households with - Operational by mid-2007 access to electricity rise from 3% to 8%  Rural electrification schemes under various donor projects implemented through out UJAS period Freight carried by rail rises from 863,000  At least 30 megawatts renewable energy: tons per year to 1,565,000 tons per year - Connected to main grid by end-2007 - Supplying the main grid by end-2008 Objective: Strengthened environment and natural resource management Increase in proportion of forest land cov-  Ministry of Water, Lands, and Environment coordinates: ered by sustainable forest management - Preparation of an interim business plan for environmental and natural resources plan by 2-3% (medium target being de- for the budget framework paper by mid-2006 veloped) - Full integration of the environmental and natural resources sector investment Proportion of wetlands with sustainable plan into the environmental and natural resources –the budget framework pa- management plan increased from 7.5% to per by mid-2007 20% - Full implementation of the environmental and natural resources sector invest- ment plan by mid-2008  Districts/sectoral agencies mainstream environmental concerns in policies and Decrease in environmental degradation programs: - 14/15 by mid-2006 - 28/25 by mid-2007 - 36/30 by mid-2008 Objective: Strengthened Financial Sector Increase number of clients served by Mi-  Microfinance Institutions supported for rural outreach and capacity building crofinance Institutions between 2005 and mid-2006  Business Culture Fund to improve business and financial skills in rural areas established by mid-2006 Pillar III. Security, Conflict Resolution and Disaster Management Objective: Reduced Insurgency conflict PEAP Outcomes Indicators Intermediate Results Reduced number of civilian casualties  Program for socioeconomic reintegration of ex-combatants into civilian life devel- from conflict (killed, wounded, abducted) oped by mid-2006  National policy on conflict prevention: Increased number of returnees/reporters - Developed by mid-2006 that are resettled - Implemented by mid-2007  National Security Policy developed and operationalized by mid-2006  Joint defense review with EAC: - Conducted by mid-2007 - Recommendations implemented by mid-2008 121 Annex C Strategic Objectives and Benchmarks Objective: Reduced number of people internally displaced Reduced number of internally displaced  National policy on internally displaced people translated and distributed by mid- people from 1.6 million 2006  Social and economic reintegration plan for internally displaced people coordinated and monitored by mid-2008  Database on internally displaced people developed by mid-2006 Pillar IV. Good Governance Objective: Increased efficiency in the justice and commercial justice system Reduced crime rate from 30 (incidents per  Strengthen and decentralize Justice, Law and Order institutions to improve 10,000 people) to 20 access to justice throughout UJAS period  Promote coordination initiatives among Justice, Law and Order Sector Decreased growth rate of commercial court institutions throughout UJAS period case backlog from 30 (per month) to 10  Five commercial laws passed by Parliament by mid-2006 Increased satisfaction of businesses with commercial court system from 30% to 70% Objective: Strengthened public financial management Increase percentage of Ministries/local  Reorganization of Accountant General’s Office completed by mid-2007 governments preparing regular financial  All local governments prepare financial statements for 2005/06 in accordance with statements in accordance with financial new financial and accounting regulations by mid-2007 regulations from 51% to 100% by  Roll out Integrate Financial Management Systems: 2013/14 (medium target being devel- - To 10 agencies and 10 local governments by mid-2007 oped) - To all remaining agencies and more local governments by mid-2008 Objective: Reduced corruption Decrease perceived incidence of corrup-  Leadership Code Act (Revised) presented to Parliament by mid-2006 tion (measured by National Integrity Sur-  Continued verification of assets declarations by ministers throughout UJAS period vey) from 23% to 12% (medium target will be adjusted) Objective: Improved public service performance Higher percentage of public satisfied  Strategic plan for national statistical system developed and adopted by mid-2006 with public service delivery  100% of PEAP indicators reported by mid-2008 Objective: Strengthened local government system for service delivery Local government revenue as share of  Application of Harmonized Participatory Planning Guide: local government budget increased from - Mechanisms for monitoring developed by mid-2006 6% to 9% (medium target will be re- - Monitor by mid-2008 vised)  Fiscal Decentralization Strategy: - Roll out to local government by mid-2006 - Monitor implementation throughout UJAS period - Operationalization of new local government structures by mid-2006 Pillar V. Human Development Objective: Improved Education opportunities for all Ugandans Increased primary net enrollment rate  Curriculum development for primary education: from 87% boys/86.4% girls to 90% girls - Finalized by mid-2006 and boys - Roll out implementation by mid-2008  Minimum primary teachers’ wage level: Increased primary completion rate from - Enhanced towards UShs.200,000/month by mid-2006 66% boys/44% girls to 74% boys/64% - Reached by mid-2008 girls  60 seed secondary schools constructed by mid-2008  Improved curriculum emphasis for science and technology in tertiary education by Increased post-primary gross enrollment mid 2007. rate from 20% male/17% female to 30% male/25% female Increased completion rate of senior 4 rate from 20% boys/17% girls to 26% boys/23% girls Increased tertiary gross enrollment rate from 4% to 5.5% 122 Annex C Strategic Objectives and Benchmarks Objective: Healthier Ugandans Reduced infant mortality rate (per 1,000  Continued joint implementation of the Revised National Framework for HIV/AIDS live births) from 88 to 68 throughout UJAS period  Indoor residual spraying strategy: Lower maternal mortality rate (per - Finalized by mid-2006 100,000 deliveries) from 505 to 354 - Implemented by mid-2007  Emergency obstetric care strategy implemented by mid-2007 Reduced percentage of population un-  Human resource policy for health care staff finalized and implementation initiated by dernourished from 19% to 5% (target will mid-2007 be revised) Reduced HIV prevalence rate from 6.2% to 5% Increased utilization of outpatient de- partment Increased percentage of approved posts filled by formally trained health workers from 68% to 90% Increased percentage of facilities without any stock outs of chloroquine, fansidar, measles vaccine, Depo Prevera, ORS and cotrimoxaxole from 40% to 60% Increased percentage of deliveries in health care centers from 24.4% to 50% Meeting the demand for family planning services from 27% (medium target being developed) Higher percentage of children immu- nized (DTP3) from 83% to 90% Objective: Improved access to safe water supply and sanitation Increased percentage of population us-  3,700 new water systems serving 950,000 people in rural areas throughout UJAS ing safe water from 55% rural/65% ur- period ban to 90% rural/100% urban  In small towns: - 3,500 new water connections by mid-2006 Increased percentage of population us- - 4,000 new water connections by mid-2007 ing sanitation facilities from 56% ru-  In large towns: ral/65% urban to 80% rural/100% urban - 12,500 new water connections/ 133 new sewerage connections by mid-2006 - 13,000 new water connections/ 139 new sewerage connections by mid-2007 Increased percentage of rural Water and - 13,500 new water connections/ 146 new sewerage connections by mid-2008 Sanitation facilities functional from 70% to 85% Objective: Revitalized community development function Increased number of filled community  Community mobilization and empowerment strategy operationalized by mid-2006 development worker posts  Equal Opportunities Commission: - Policy submitted to cabinet by mid-2006 Increased percentage of functional - Established by mid-2007 community management committees  National Gender Policy submitted to cabinet by mid-2007 Notes: DPT= diphtheria, pertussis, and tetanus; EAC=East Africa Community; GDP= gross domestic product; HIV= human immunode- ficiency virus; LGDP=Local Government Development Project; MTEF= Medium-Term Expenditure Framework; ORS= oral rehydration salts; PAF=Poverty Action Fund; PEAP= Poverty Eradication Action Plan; SME= small and medium enterprises; UEB= Uganda Elec- tricity Board; UJAS= Uganda Joint Assistance Strategy; WSS=water supply and sanitation. 123 Annex C Strategic Objectives and Benchmarks The African Development Bank The 2002-2004 AfDB Country Strategy Paper 1. Framework for Economic Growth and Structural Transformation AfDB Assistance Strategy Results/Intermediate Outcomes  Real GDP growth of 7% Promote fiscal sustainability  Inflation contained to 5%  Stable and non-appreciating exchange rate Diversify exports  Foreign reserves at 5 months of imports Improve tax administration  Increased tax revenue- GDP ratio Public expenditure reforms  PAF share of total expenditure increases to at least 25% from current base Strengthen institutional capacity of reg-  UEB separated into entities responsible for generation, transmission and distribution ulatory agencies Increase investment in power genera-  Generation capacity expands tion capacity Rehabilitation and upgrading of national  Inventory of main roads network classified as satisfactory increases roads Provide enabling environment (Private  Competition in financial sector increases. sector development)  Legal framework improves Improve access of SMEs to commercial  Availability of lines of credit for on-lending to SMEs. banks 2. Good Governance and Security AfDB Assistance Strategy Results/Intermediate outcomes Strengthen institutional and human  Improved access to and quality of basic services. capacity of local governments Improve public procurement and finan-  Reform programs for public procurement and financial management implemented. cial management systems Strengthen capacity of anti-corruption  Reduced perception of corruption institutions 3. Increase the Ability of the Poor to Raise their Income AfDB Assistance Strategy Results/Intermediate outcomes Support implementation of PMA  Sustained growth of agriculture sector of 3% or more Integrate environmental concerns in  Reduced soil degradation, biodiversity losses, and deforestation development programs Strengthen NEMA  Sustainable authority for environmental management Rehabilitation and maintenance of dis-  Increased accessibility in rural areas trict roads Commercial generation and distribution  Increased access of rural populations to power of energy in rural areas  Increased access of rural poor to financial services 4. Increase the Quality of Life of the Poor Assistance Strategy Results/Intermediate outcomes Improve efficiency and effectiveness of  54% of children less than 1 year old have received DPT3 vaccination existing health care delivery systems  Out-of-patient department utilization per capita is 0.47  HIV prevalence is reduced to 5.4% Support classroom construction,  Pupil-teacher ratio 45:1 teacher and curriculum development  Pupil-textbook ratio 3:1 and procurement of textbooks  Pupil-classroom ratio 89:1  P7 net enrollment 20% Increase access to water and sanita-  Increased access to safe WSS from 52% to 60% tion in small towns  80% WSS systems functioning  Increased access to safe urban WSS from 50% to 65% Notes: AfDB= African Development Bank; GDP= gross domestic product; HIV= human immunodeficiency virus; NEMA= National Envi- ronmental Management Agency; PAF=Poverty Action Fund; PMA= Plan for Modernization of Agriculture; SME= small and medium en- terprises; UEB= Uganda Electricity Board; UJAS= Uganda Joint Assistance Strategy; WSS=water supply and sanitation. 124 Annex D: Achievement of Objectives World Bank: I. Governance Agenda Country Assis- Lending Program Nonlending (fiscal Expected Out- Outcome Rationale for Ratings tance Strategy (fiscal year) year) come Ratings of Pillar World Bank Contribution Effective De- -Local Government -Conflict Analysis Poli- -Increased num- Satisfactory Financial management and centralization Development II cy Note ( 2005) ber of districts accountability reforms un- (2003) -Uganda Legal and eligible for District der local government -Institutional Capaci- Judiciary Sector As- Development yielded positive results in ty Building (1995) sessment (2005) Grant under building institutions and -Local Government LGDP. supporting capacity. Development Pro- Achieved target estab- gram SIL (2000) lished under LGDP grant. -PRSC 1-6 (2001– Support also had positive 07) gender effect. Transparent, -Public Service Per- -Uganda PER (2002) -Improved pro- Moderately There is scope for im- Efficient and formance Enhance- -Uganda FSAP (2002) curement system. Satisfactory provements in procurement Poverty- ment (2006) -Financial Sector As- -Implementation reform. focused Public -Economic and Fi- sessment Program of results-based Capacity limitations in min- Expenditure nancial Management Follow-up Dialogue ( management. istries, departments, and Project (2000) 2002) -Established sus- agencies severely con- -EFMP II- -Budget and Medium- tainable pay strained the institutionaliza- Supplemental ( term Expenditure reform program. tion of the results-based 2003) (2002) approach to public service -PRSC 1-6 (2001– -Uganda Economic management. 07) Monitoring (2002) Pay reform not fully -Public Expenditure achieved. Support for fi- Review (2003) nancial management reform was positive Anti-corruption -PRSC 1-6 (fiscal -2003 PER (2004) -Reduction in Moderately Reform to improve accoun- year01-07) -PER/CFAA/Country perceptions of Unsatisfactory tability, thereby reduce Procurment corruption. corruption has not signifi- Assessment cantly reduced the percep- Report/LGIFA (2004) tion of corruption. Govern- -Uganda PRSC ment effectiveness is Stocktaking (2004) perceived not to have im- -Uganda PER (2005) proved. Strategic approach -Uganda ROSC AAR was not informed by suffi- Report (2005) cient analytic underpinning -Financial Sector As- and unambiguous mea- sessment Program surement of corruption. Update (2005) The direct links between -AML/CFT Assessment Bank support and out- (2005) comes were not clear. -PER (2007). 125 World Bank: II. The Growth Agenda Country Assis- Sub-Pillar Lending Pro- Nonlending b/ Expected Out- Outcome Rat- Rationale for tance Strategy gram a/ (fiscal year) come ings of World Rating Pillar (fiscal year) Bank Contri- bution Growth and Ma- Economic PRSC 1-6 ( 2001– -Poverty Assess- - High real GDP Satisfactory Perception of croeconomic Growth 07) ment (2005) growth (7%) slowing growth Stability -Country Econom- -Reduce regional and stalled po- ic Memorandum disparities in pover- verty reduction (2006) ty. was not dealt -Northern Uganda with on a timely Review (2007) basis before 2004 PEAP with appropriate ana- lytic support. Effort made in dealing with re- gional disparity in poverty was substantial. Macroeconomic -Oil Shock Sup- -Uganda Book -Inflation of 5%. Satisfactory Fiscal prudence Stability plemental-SAL III (2001) -Non-appreciating was maintained; (2001) -Debt Sustainabili- exchange rate. although arrears - PRSC 1-6 2001- ty (2003) -5 months import remain due to 07) -HIPC Tracking coverage. implementation Update (2003) -Increased Reve- weaknesses with -Debt Sustainabili- nue/GDP ratio. MTEF. Revenue ty Analysis (2006) -Reduced fuel le- mobilization re- -DTIS (2006) vies. mains weak and -Insolvency ROSC -Increased PAF the govern- (2006) share of total ex- ment’s aid de- penditures. pendence re- mains high. Enhancing Private sector -Road Develop- -Country Frame- No defined bench- Moderately Administrative Economy’s development ment. Phase 2 work Paper (2001) marks and targets. Satisfactory constraints to Competitiveness APL (2002)9 -Exp. Growth and private sector and private sec- -Private Sector Competitiveness development tor development Competitiveness (2004) have improved (PSD) 2 (2005) -Investment Cli- but not signifi- -Private Sector mate Assessment cantly. Key mar- Competitiveness (2004) ket ratings (1996) -Trade Export showed marginal Competition. improvement. (2004) World Bank -UEDC Transit support for in- Tariff (2005) dustrial zone and land cada- stre experienced delays. Financial Sector -Regional Trade -CFAA (2001) -Sustained supervi- Satisfactory Although inter- Development Facilitation (2001) -Country Pro- sion of commercial mediation and -Financial Market curement As- banks. interest rates Assistance (1999) sessment Report -Increased financial remain high, (2001) sector competition. credit grew fast, -Financial Sector -Efficient handling leading to sub- Follow-up (2006) of cases. stantial financial intermediation. World Bank World Bank: II. The Growth Agenda such as pension reform is behind schedule. Energy Devel- -Privatization & -Power Sector -Increased rural Moderately Timing of suc- opment Utility Sector Reform and Regu- access to electrici- Unsatisfactory cessful unbun- Reform (2001) latory Strategy ty. dling of UEB, -Power SIL 4 (2001) -Separate UEB coupled with (2002) -Key Factors for activities. supply crisis as -Energy for Rural Private Sector -Increased private a result of de- Transformation Investment in investment in pow- layed completion (2002) Power Distribution er generation. of the Bujagali -National RE Dev (2002) hydroelectric TAL (2004) Power Sector power plant and -Power Sector Reform: Assess- water shortage Development ing Impact (2006) in Lake Victoria Project (2007) constituted a -Power III (1998) strategic failure -Power III Sup- in risk assess- plemental (2000) ment. Increases in rural access and private in- vestment in power limited. Transport & -Road Sector & -Improved rural Moderately Substantial im- Logistics Institution Support roads through re- Satisfactory provements in (1998) pair and mainten- road network. -Roads Develop- ance. But high institu- ment APL (1999) -District Roads fully tional orientation -Road Develop- repaired by 2016 of infrastructure ment APL 3 support is yet to (2005) yield results. -El Nino Emer- High cost of gency Road transportation (1998) continues to be major constraint to business prof- itability. Improving In- PMA -Roads Develop- -Land Reform -Sustained agricul- Moderately Support for agri- come of the ment APL (1999) (2001) ture growth (4%). Unsatisfactory culture, although Poor through -National Agric -Agriculture Mod- focused, was too Agriculture Services SIL ernization (2001) heavy on institu- Productivity (2001) tional-building. -ICB-PAMSU Analytic under- (1999) pinnings were not usually time- ly. Current status of agriculture productivity un- known. Environment -ENCBP SIL 2 -Natural Resource -Reduced soil ero- Moderately Support for (2001) Management sion. Satisfactory NEMA has im- PAMSU SIL Analysis (2005) -Reduced defore- proved focus on (2003) station. the preservation -Lake Victoria -Reduced loss of of natural envi- Environnent. SIL wild life. ronment. Con- (1997) cern expressed -Nakivubo Chan- about excessive World Bank: II. The Growth Agenda (1999) on undertaking LVEMP Supple- studies, rather mental (2003) than improving the livelihood of communities. World Bank: III. The Human Development Agenda CAS Pillar Lending Program Nonlending Expected Out- Outcome Rationale for Ratings come Ratings of World Bank Contribution Improved Health -Sexually Transmitted -Health Expendi- -Immunization Moderately Despite improved access Care Services Infection (1994) ture Tracking ratios (DPT3) to Unsatisfactory and citizen’s satisfaction with -District Health ( 1995) (2002) increase to 80% public health service deli- -Child Nutrition Develop- -Health Sector Per- by 2002/03. very, there remains unsatis- ment SIL (1998) formance (2004) -Increased per- factory outcomes with re- -HIV/AIDS Control SIL -Health Systems centage of health gards to family planning and (2001) Support (2007) centers with reproductive health; and the -PRSC 1-6 (2001-07) trained staff to declining effectiveness of 65% by 2002/03 PRSC as instrument for dealing with specific health sector issues. Primary Educa- -Millennium Science Initi- -Post-Primary Edu- -Pupil/teacher Moderately Support has yielded equita- tion ative (2006) cation Sector Work ratio of 47 by Satisfactory ble coverage, especially for -Primary Education 2003) 2002/03 girls; provided institutional -Education Sector (1993) -Tertiary Education -Pupil/class ratio strengthening by meeting Adjustment Credit (1998) Sector Report of 87 by 2002/03 output target established in -Makerere Decentraliza- (2004) -Pupil/book ratio of the PEAP; and through tion Service (2002) 3 by 2002/03. PRSCs, sustained resource -PRSC 1-6 (2001–07) flow to sector. Support was unable to deal with ineffi- ciency issues and concerns with Uganda’s attainment of MDG2. Water and Sani- -Uganda Social Action -Review of Urban -Boreholes drilled: Satisfactory Support through the PRSCs tation Fund (fiscal year03) Water (2001) 1500 by 2002/03 to local governments helped -Small Towns Water -Water Supply De- -Protected exceed all CAS performance (1994) livery Impact As- springs: 700by targets (protected springs, -PRSC 1-6 (2001–07) sessment (2005) 2002/03 boreholes drilled and new -Protected wells: wells constructed). Both rural 1700 by 2002/03 and urban access to safe water showed major im- provement, on track to ex- ceed the corresponding MDG target. On the other hand, there was limited pro- gress in sanitation provision and hygiene mitigation, with potential negative effects on the achievement of MDGs in the area of infant, child and maternal mortality. Notes: AML/CFT= anti-money laundering/combating the financing of terrorism; APL= adjustable program loan; CFAA= Country Financial Ac- countability Assessment; DTIS= Diagnostic Trade Integration Study; EFMP= economic and financial management project; ESW= economic and sector work; FSAP= Financial Sector Assessment Program; GDP= gross domestic product; HIPC= Highly-Indebted Poor Countries; ICB= institu- tional capacity building; LGDP= Local Government Development Project; LGIFA= Local Government Integrated Fiduciary Assessment; LVEMP= Lake Victoria Environmental Management Project; MTEF= Medium-Term Expenditure Framework; NEMA= National Environmental Manage- ment Agency; PAF= Poverty Action Fund; PAMSU= Protected Areas Management and Sustainable Use; PEAP= Poverty Eradication Action Plan; PER= Public Expenditure Review; PMA=Plan for Modernization of Agriculture; PRSC= Poverty Reduction Support Credit; PSD= private sector development; ROSC= Reports on the Observance of Standards and Codes; SIL= specific investment loan; UEB= Uganda Electricity Board; UEDC=Uganda Electricity Distribution Company. AfDB: I. Governance Agenda Country Strat- AfDB Strategy Lending Pro- Expected Outcome Rationale for Ratings egy Paper Pil- gram Outcome Rating of AfDB lar Contribution Decentralization Strengthen institu- -Poverty Reduc- Improved Satisfactory Financial management and ac- tions and human tion Support Loan access to and countability reforms under local capacity at the local (2002) quality of basic government yielded positive governments -Institutional Sup- services. results in building institutions port Project for and helping improve access to Good Governance basic services. (2004) Public Sector Man- Improve public pro- -Poverty Reduc- Reform pro- Moderately Satis- Reform programs on procure- agement Reforms curement and fi- tion Support Loan gram for pro- factory ment yielded modest results. nancial manage- (2002) curement and Improved financial management ment system -Institutional Sup- financial man- has helped the government to port Project for agement func- achieve expenditure targets Good Governance tioning with respect to poverty spend- (2004) ing. Combating Corrup- Strengthen capacity -Technical Assis- Reduced per- Moderately Unsatis- Support for accountability and tion of anti-corruption tance (Law Insti- ception of cor- factory training as instruments to facili- institutions tute) (2002) ruption through tate the reduction in corruption -PRSL and Institu- improved ac- has not helped to significantly tional Support countability and reduce the perception of corrup- Project for Good better audit tion. Government effectiveness Governance systems. is perceived not to have im- proved through the assistance provided for improving audit systems. AfDB: II. The Growth Agenda Country Sub-Pillar Lending Pro- Expected Outcome Outcome Rationale for Strategy Pa- gram Ratings of Ratings per Pillar AfDB Con- tribution Growth, Fiscal -Promote Fiscal -PRSL. -Real GDP growth of 7% Moderately Sa- Despite its narrow Reform and Ex- Sustainability -Institutional Sup- -Inflation contained to 5% tisfactory and focused sup- port Diversification -Improve Tax port to External Aid Stable and non-appreciating port, AfDB’s contri- Administration Coordination (1998) exchange rate bution was substan- -Public Expendi- -Institutional Sup- -Increase tax revenue/GDP tial in achieving the ture Reform port Project for ratio poverty-reducing Good Governance -PAF share of total expenditure expenditure targets. (2004). increases to at least 25% from Fiscal prudence current base. was maintained; although arrears remain. Revenue mobilization re- mains weak. -Diversify Exports The Area-based -Foreign reserves at 5 months Satisfactory Progress on export Agricultural Moder- of imports diversification oc- nization Project curred, which cu- (2000), and other shioned the wide support for diversifi- fluctuations in ex- cation. port prices and un- favorable terms of to 6.5 months of imports cover by fiscal year 2007. Enhancing Econ- -Strengthen insti- -Bujagali Intercon- -UEB separated into entities Moderately Un- Economy’s compe- omy’s Competi- tutional capacity nection Project responsible for generation, satisfactory titiveness was not tiveness and pro- of regulatory (2007). transmission and distribution significantly en- moting PSD/SME agencies -Urban Power Re- -Generation capacity expands hanced because of Development -Increase invest- habilitation Project -Increased access of rural failure to resolve ment in power (1996) populations to power. the power issue, generation capac- -Alternative Energy although support ity Resources Assess was provided for -Commercial gen- and Utilization alternative sources eration and distri- Study (2000) of energy. bution of energy in rural areas. -Rehabilitation -Road Sector Sup- .-Inventory of main roads net- Moderately Sa- Road sector sup- and upgrading of port Project (2005) work classified as satisfactory tisfactory port has not re- national roads -Road Sector Sup- increases. sulted in substantial -Rehabilitation port Project (Sup- -Increased accessibility in rural cost reduction but and maintenance plemental) (2006) areas. support for com- of district roads. -Rural Feeder munal road is help- Roads Maintenance ing open up the Program (1991) rural area. Neither -Kyotera-Mutukula AfDB nor the World Upgrading Project Bank has supported (1998) direct investment in -Roads Mainten- new district roads. ance and Upgrad- ing Project (2000) -Transport Sector Development Pro- gram (2003) -Provide enabling -Rural Microfinance -Competition in financial sector Satisfactory Focus on rural environment for Support Project increases. finance has helped private sector (1999) -Legal framework improves improve availability development. -Sheraton Kampala -Availability of lines of credit for of lines of credit for -Improve access Hotel (2002) on-lending to SMEs. on-lending to of SMEs to com- -Sustainable Man- SMEs. mercial banks. agement of Mineral Resources (2004) Improving Income Support Imple- .-Northwest Small- -Sustained growth of agriculture Satisfactory Diversified ap- of the Poor mentation holder Agricultural sector of 3% or more. proach to support- through Agricul- of PMA, thereby Development ing agriculture ture Productivity helping increase (1999) yielded mixed re- the productivity of -Area-based Agri- sults: sustained small farmers. cultural Moderniza- growth of agricul- tion Program (2000) ture of 3 percent -Fisheries Devel- has not been opment Project achieved but inte- (2002) grated approach is -Livestock Produc- helping reduce soil tivity Improvement degradation and Project (2002) supporting fisheries -Farm Income En- and livestock. hancement Project (2004) -Creation of Sus- tainable Tsetse cultural Infrastruc- ture (2007) -Integrate envi- . -Reduced soil degradation, bio- Non-evaluable Support to streng- ronmental con- diversity losses, and deforesta- thening NEMA pro- cerns in develop- tion. vided indirectly ment programs through other -Strengthen projects. NEMA AfDB: III. The Human Development Agenda Country Sub-Pillar Lending Program Expected Out- Outcome Rationale for Rat- Strategy Pa- come Ratings of ings per Pillar AfDB Contri- bution Health: Improve Improve access -Health Services Re- -54% of children less Moderately Satis- Access to mental health efficiency and and reduce habilitation Project than 1 year old have factory and maternal health ser- effectiveness of inequality to (1989) received DPT3 vaccina- vices increased. Howev- existing health mental and -Support to Health tion er, access to material care delivery sys- community ma- Sector Strategic Plan -Outpatient department health continued to be tems ternal health (2000) utilization per capita is severely limited by short- care services -Support to Health 0.47 ages of staffing and Sector Strategic Plan -HIV prevalence is re- drugs. (2006) duced to 5.4% Education: Sup- Improved -Support to the ESIP -Pupil-teacher ratio 45:1 Moderately Satis- Gender inequality in ac- port classroom access to quali- (Education II Project) -Pupil-textbook ratio 3:1 factory cessing science educa- construction, ty primary edu- (2000) -Pupil-classroom ratio tion in rural communities teacher and curri- cation, and for -Education III Project- 89:1 decreased. But improve- culum develop- girls, into sec- Support to Post- -P7 net enrollment 20% ments in the quality of ment and pro- ondary science Primary (2005) education were limited by curement of education in the slow pace of delivery textbooks. rural areas. of support and high de- mand for education. The education sector contin- ued to be characterized by high drop-out rates, and low transition rates from primary to post sec- ondary education. Water and Sanita- Increase access -Economic and sector -Increased access to Satisfactory Support from the Small tion to water and work safe WSS from 52% to Towns Water project sanitation in -Rural Towns Water 60% helped exceed all CSP small towns. Supply and Sanitation -80% WSS systems performance targets (pro- Study (2000) functioning tected springs, boreholes -Small Towns Water & -Increased access to drilled and new wells Sanitation Project safe urban WSS from constructed). Both rural (2004) 50% to 65%. and urban access to safe -Rural Water Supply & water showed major im- Sanitation Program provement, on track to (2005) exceed the corresponding MDG target. On the other hand, relative neglect of sanitation provision and hygiene mitigation could have potential negative fant, child and maternal mortality. Notes: AfDB= African Development Bank; CSP= Country Strategy Paper; ESIP= Education Sector Improvement Plan; ESW= economic and sector work; GDP= gross domestic product; MDG= Millennium Development Goal; NEMA= National Environmental Management Agency; PMA= Plan for Modernization of Agriculture; PRSL= Poverty Reduction Support Loan; ISPGG=Institutional Support Project for Good Gover- nance; SME= small and medium enterprises; UEB= Uganda Electricity Board. Annex E: The Poverty Reduction Support Credits, I-VI Although this Country Assistance Evaluation has focused on evaluating the strategy of the World Bank and the AfDB in Uganda, and not on individual interventions, the World Bank’s Poverty Reduction Support Credits (PRSCs) played such an important role that they require a more detailed analysis in this Annex. The PRSCs were one-tranche operations, disbursed as annual budget support into the government’s national budget. The first three PRSCs were designed as an integrated program, with tentative commitments for PRSC-2 and PRSC-3, foreshadowed in the project appraisal document for PRSC-1. Similarly, PRSC-4 was originally conceived as the first of a second set of three one-year PRSCs that would support a new Ugandan PEAP as the tentative agenda for actions was included in PRSC-2 and 3, as part of the “rolling design” of these operations. Delays in the completion of the new PEAP, however, led to PRSC-4 to be presented as a stand-alone operation. Part 1 of this Annex provides the main conclusions from the 2004 Stocktaking Study of the first three PRSCs in Uganda, conducted by the World Bank. Part 2 presents the lessons learned from the Independent Evaluation Group (IEG) 2008 Project Performance Assess- ment Report that covers the first four PRSCs. Finally, the conclusion brings together the main messages on PRSCs on the basis of part 1 and 2, and the findings of the current Coun- try Assistance Evaluation which reviewed PRSCs 1-6. The 2004 Stocktaking Study (covering PRSCs 1-3) conducted by the World Bank found that the PEAP and PRSC processes had led to a substantial sharpening of the overall vision of the development challenges faced by Uganda and helped focus on the main strategic approaches to follow. This facilitated the allocation of resources, helped increase the effi- ciency of basic service delivery, and contributed to improving the coordination of the type of cross-sectoral efforts needed for poverty reduction in its various dimensions. Some of the most important conclusions and recommendations in the report are:  Focus. The first three PRSCs emphasized the human development dimensions of poverty by focusing on improved access to education, health, and water and sanita- tion. Relatively less attention was paid to issues of macroeconomic stability, better allocation of public resources, improved governance and some aspects of agricul- ture— all of which are needed to achieve rapid and sustained economic growth for sustained poverty reduction. The study noted that, in retrospect, the focus of the PRSCs could have been somewhat different, by placing greater emphasis on pover- ty reduction through economic growth. Even though one of the stated outcomes by which PRSCs were to be measured was “(income) poverty reduction”, this did not receive adequate attention relative to the objective to improve service delivery.  Predictability of Resource Flows. The PRSC process helped improve the predicta- bility of resource flows at the aggregate level. There were, however, some problems with the flows at the sub-national level that need to be addressed. These were not due to the failure of PRSCs, but rather due to lapses in budget implementation. 134 ANNEX E THE POVERTY REDUCTION SUPPORT CREDITS, I-VI  Transaction Costs are viewed to have declined. Despite complaints about the size of PRSC missions and the reform agenda that leaves little room for any down time, the government made it clear that the budget support approach was by far the pre- ferable way of proceeding. With respect to the World Bank, the available evidence suggested that resource costs for program preparation were considerably higher for the PRSCs than for regular IDA investment projects. The report recommended that for the follow-up PRSCs, attention should focus on improving the impact of the transferred resources rather than worrying too much about the costs of program preparation.  Donor Coordination. The PRSCs helped to streamline and coordinate donor sup- port, and this led to increased resource flows from donors as aid shifted progres- sively into direct budget support. The main locus for local PRSC donor activities has been the Sector Working Groups, supplemented by special meetings arranged during PRSC missions. Improved coordination was evident in the exchanges of do- nor assistance strategies and key reports, feedback to the World Bank, and conti- nuous informal exchanges. These were especially important when they involved government representatives to reinforce the sense of partnership and transparency.  Aid Modalities. Overall, the direct budget support provided by the PRSCs was an invaluable instrument that had done much to sharpen the focus of the govern- ment’s poverty reduction program. However, it was also clear that providing aid to Uganda only through budget support could not be the best approach, even if it is the main instrument of choice for the government. The report noted that there were always reform areas (typically in capacity and institution building, but also in major infrastructure investments in sectors such as power and roads) that could arguably be better handled in the project mode. The choice of instrument, therefore needs to be done in the context of a sector strategy, be transparent to all actors (donors as well as government), be well justified. Further, they should be on the budget.  Implementation. The report noted that progress in implementation was somewhat slow. It pointed out that more needed to be done to improve both the efficiency and equity of resource utilization, so that more of the GBS resources could reach poor communities and remote areas. Equally, part of the improvement needed to take place at the local level, where a combination of lack of capacity and skills, as well as corruption and local influence continues to divert poverty-oriented resources from their intended purposes.  Aid Dependency. Increased aid flows (from both budget and project support) brought to bear concerns about high aid dependency. Despite the benefits of pre- dictable budget resources, the report noted clear signs of an imbalance between do- nor aid and the mobilization of domestic resources. The report stated that the vo- lume of aid flows Uganda is receiving helped undermine the incentive to improve domestic revenues mobilization. 135 ANNEX E THE POVERTY REDUCTION SUPPORT CREDITS, I-VI  Results Orientation. Finally, the stock-taking exercise emphasized the repeated calls for a greater results-orientation. There was a wide-spread sense that although there has been good progress on a number of input fronts (budget execution was under control, sector ceilings were in place, teachers and health workers were being hired, more students were in schools, and so on), the concern remained how to at- tain better outcomes. Operational efficiency was thought to be low and much re- mained to be done with respect to a better connection between policy actions and monitorable indicators in the PRSC matrices. The draft 2008 Project Performance Assessment Review (covering PRSCs 1-4), rates the overall outcome of World Bank support through the PRSCs as moderately satisfactory, with a modest rating for risk to development outcome, a moderately satisfactory rating for World Bank performance, and satisfactory rating for borrower performance. It points to the following lessons:  The Ugandan experience does support the idea that generalized budget support for well-performing countries can be delivered with lower transactions costs and (probably) with higher payoffs than project assistance. The available information indicates that the PRSCs have reduced the costs of delivering a dollar of aid to Uganda. The redirection of some effort away from specific to general management concerns appears to have reduced costs for both the Ugandan government and the Bank. It also achieved important improvements in government management of its budgetary execution in general, and its attention to poverty-related spending in particular.  The Ugandan experience does not suggest that a “mature partnership” existed be- tween the Bank and Uganda. Unilateral demands (“prior actions”) were an impor- tant feature of each PRSC. Altogether, the four PRSCs required a total of 44 prior actions by the Ugandan government before Board presentation. Another 193 other undertakings were also required of the Ugandan government during implementa- tion. The opportunity to require some action by the government appears to have led to a steady increase in such demands through PRSC-3, though these require- ments were reduced in PRSC-4.  The Bank focused too much on social services and too little on income generation as the exit from poverty. PRSCs 1-3 focused almost entirely on social service delivery issues. The attention to agriculture – the source of income for the great majority of Ugandans – was entirely absent from PRSC-1, and appeared in the next two PRSCs in a very minimalist fashion. Even with the PRSC-4, the linkage between commit- ments and actual outcomes with respect to the poor in Uganda is difficult to make. The neglect of investment in roads and rural electrification in the PRSCs and in the government budget meant that opportunities for income growth among the 80 per- cent of the population living in rural areas were attenuated by lack of adequate in- frastructure. The share of investment spending in the government budget steadily declined during the implementation of the four PRSCs, from 6.4 percent of GDP to 4.5 percent, though none of the Project Appraisal Documents drew attention to this. 136 ANNEX E THE POVERTY REDUCTION SUPPORT CREDITS, I-VI  Additional budget support and/or improvement in budgetary planning and man- agement may not eliminate or reduce resource constraints. The four PRSCs, to- gether with the associated funding from other donors, provided about half of the government budget for the Ugandan government during 2001-04. HIPC debt relief further eased the resource constraint. Yet the government’s fiscal management problems appear no less difficult than at the beginning. Government spending rose apace with the increase in donor funding. Some of the increase was clearly indi- cated, as with the necessary expansion of teachers to keep pace with the growth in enrollments and commitments to reduce pupil/teacher ratios, as well as with com- mitments for delivery of health and water and sanitation services. Nevertheless, unanticipated expenditure growth occurred through several channels: (i) pay in- creases for education and health workers beyond planned levels; (ii) costs of creat- ing new districts for which staffing of local officials and their administration was required; (iii) increases in defense spending beyond previous commitments, and; (iv) unanticipated increases in spending for government commissions and other ac- tivities not clearly linked to outcomes. During this period, domestic revenue collec- tions continued to stagnate as a share of GDP. Thus, service increases desired by donors continually had to compete for budgetary space with politically-driven priorities. This suggests a sort of Parkinson’s Law of budgeting: Spending will rise to fill any space created by additional income.  Bank staff sought to “push the envelope” of reform, though this often led to expec- tations that exceeded outcomes. Although this was a good thing, because of con- cern with government commitment on certain policy issues (for example, on popu- lation control issues and corruption), Bank support did not meet targets set out in the CAS. However, falling short of ambitious goals is not necessarily a sign of lack of success. It opened up the dialogue to the general population, which established the environment for the next round of reform.  The Bank made progress on governance and reduction in corruption mainly by strengthening systems. The improvements in budget transparency and procure- ment reform achieved through the PRSCs were substantial. Such reforms could not, in the short-term, eliminate the potential for corruption. However, through im- proved transparency, they did reduce the areas where corruption is easily possible at the institutional level.  Decentralization of World Bank staff to the country office has probably contributed to the Bank’s effectiveness, though less than might have been expected. A visiting mission, with a clear mandate and a limited time in country, is sometimes able to galvanize timely action and to focus attention on the issues to be discussed. On the contrary, the presence of in-country staff could result in slower progress on deci- sions or commitments, as the urgency of decision is not equally perceived by coun- try counterparts.  Monitoring and evaluation was given inadequate attention. The Project Appraisal Documents for the PRSPs laid out an optimistic picture of regular surveys, which did not materialize in practice. Baseline data were also sketchy and often inconsis- 137 ANNEX E THE POVERTY REDUCTION SUPPORT CREDITS, I-VI tent with the methodologies used to subsequently track progress (usually the Na- tional Accounts and periodic surveys). As a consequence, policymakers had li- mited timely information that could be used to monitor the effectiveness of pro- grams and to correct course as necessary. Conclusion Combining the findings of the Stocktaking Study, the draft PPAR on the first four PRSCs, and the findings of the Country Assistance Evaluation team, several overarching messages can be distilled as to how the PRSCs served as an instrument for executing the World Bank’s strategy. The messages are organized around the three main pillars of the World Bank CASs and strategy documents (Governance, Growth, and Human Development), and are based on the totality of prior actions agreed upon between the International Develop- ment Association (IDA) and the government with respect to PRSCs 1-6 as outlined in table 1 (below). The table organizes the prior actions for each PRSC by the pillars outlined in the World Bank’s strategy. The main messages are:  Contrary to the expectation that the PRSCs would replace the social sector sector- wide approaches (SWAps), the six PRSCs reviewed had a heavy focus on promot- ing governance. Strong emphasis was placed on public financial management, with a quite consistent inclusion of prior actions throughout the annual PRSCs on overall expenditures, accountability in financial management, and procurement. These were complemented with project level support that helped to generate good progress. At the same time, these supported efforts to address corruption issues by improving transparency, but the extent of success is unclear. A more direct ap- proach to anti-corruption was occasionally attempted through the PRSCs by includ- ing prior actions, for example regarding the verification of assets held by politicians and high-level bureaucrats. This also proved largely unsuccessful. Similarly, pay reform and public service reform have underperformed, with prior actions effec- tively rolled-over through several PRSCs. This reflects both lack of ownership and the need for complimentary project support, which arrived late during the series of PRSCs (2006).  The first six PRSCs underperformed in fulfilling their role as effective instru- ments for meeting the World Bank’s Growth agenda. The strong emphasis on go- vernance issues, and to some extent on human development, exhausted the scope and opportunity for dialogue on growth issues, as there was limited room for addi- tional policy conditionality. In the first three PRSCs, a total of only three prior ac- tions on the growth agenda were included. The 2004 Stocktaking Study subsequent- ly called for greater focus on growth, especially in the area of income generation, but the follow-up fourth PRSC had no prior actions on growth. Subsequently, a few prior actions on agriculture and the private sector were introduced in the fifth and sixth PRSCs, but these did not represent the fundamental shift of focus that was needed.  Resolving the challenge of Human Development was central to the PRSCs, but some limitations to the use of budget support were observed. The PRSCs were 138 ANNEX E THE POVERTY REDUCTION SUPPORT CREDITS, I-VI used as the main vehicle to support basic service delivery goals in health, educa- tion, and water and sanitation. This was approached by consistently including prior actions that required satisfactory implementation of undertakings in the respective sector reviews. The evaluation, however, acknowledged the limitation of the PRSC as an instrument for dealing with endemic (and usually deep-seated) health sector issues where an investment operation or technical assistance would have been ap- propriate as the resource flow from the government budget could be limited by ri- gid budget parameters. 139 Annex E Table 1. Prior Actions Required for Uganda’s Poverty Reduction Support Credits(PRSCs) I-VI—as reported by the respective Project Appraisal Documents Topic PRSC I PRSC II PRSC III PRSC IV PRSC V PRSC VI 1. Promoting Governance Overall Ex- Agreement on a MTEF for In the annual PER, Government In the annual PER, In the PER, the In the PER, the penditures 2000/01-2002/03, with the government has agreement with the government has government has government has budget execution for the agreed with donors donors on an MTEF agreed with donors agreed with do- agreed with donors first two quarters of on MTEF for for 2002-05, and on MTEF for 2003- nors on the on the Medium 2000/01 consistent with 2001/02-2003/04, budget execution 06, and has ex- MTEF for Term Expenditure agreed allocations. and has executed through the first two ecuted the 2003-04 2004/05-2006/07, Framework for the 2001/02 budget quarters of 2002/03 budget for the full and has executed 2006/07-2008/09, through the first two consistent with year consistent with the 2004/05 and has executed quarters consistent agreed allocations. budget allocations. budget consistent the fiscal with budget alloca- with the budget year2005/06 tions. allocation as budget consistent appropriated and with the budget adjusted with allocation as ap- approval of Par- propriated and liament. adjusted with the approval of Par- liament and taken remedial action in the fiscal year 2006/07 budget where major devia- tions occurred. Financial A new coordination me- The Ministry of Enactment of a MOFPED drafts a Ministry of Public Management chanism for guiding and Finance, Planning Public Finance and revised Audit Bill Service approves monitoring reform pro- and Economic De- Accountability Bill. (2002) to ensure a revised organiza- grams in financial man- velopment has adequate opera- tional structure for agement. tabled the Public tional Indepen- the Accountant Finance Bill in Par- dence of the General’s Office liament. Auditor General that will operatio- nalize the Public Finance and Ac- countability Act of 2003, and enable financial manage- ment reforms such as the implementa- tion of the Inte- grated Financial Management Sys- tem. The audit bill is ready for cabinet by February 2007. Procurement New procurement regula- MOFPED has Enactment of a Cabinet drafts local The Local Gov- Satisfactory tions for ministries, de- tabled the Pro- Procurement that government pro- ernments progress with im- partments, and agencies. curement Bill in ensures competition curement and asset Amendment Bill plementing meas- Parliament. in the selection of disposal regulations (Procurement) ures to improve Implemented interim pro- third-party pro- and proposals to tabled in Parlia- the effectiveness curement arrangements in curement agents. amend the Local ment. of the public pro- the health sector consis- Government Act curement system tent with new procurement relating to appoint- by January 31, regulations for ministries, ment and removal 2007. departments, and agen- of local government cies. tender boards members. Anti- Introduction into Parlia- Parliament has The Inspector Gen- The Inspector Gen- The Inspector The Inspector Corruption ment of bills for Leader- passed the Leader- eral of Government eral of Government General of Gov- General of Gov- and Leader- ship Code addressing ship Code and In- has issued letters completes analysis ernment verifies ernment commits ship Code corruption, and creating an spector General of indicating the need of assets and in- asset declara- to achieving the office of the Inspectorate Government Sta- for disciplinary ac- formation collected tions of Ministers activities as speci- Annex E Table 1. Prior Actions Required for Uganda’s Poverty Reduction Support Credits(PRSCs) I-VI—as reported by the respective Project Appraisal Documents Topic PRSC I PRSC II PRSC III PRSC IV PRSC V PRSC VI nisters, Presidential government officials leadership catego- breach appropri- results matrix. Advisors, Perma- who have failed to ries, begins asset ate action is tak- These are aimed nent Secretaries, declare their in- verification, investi- en by relevant at: reducing the Directors, and comes, assets, and gates all complaints authorities in incidence and Uganda Revenue liabilities, with ap- by the public re- accordance with experience of cor- Authority officials propriate action ceived by Novem- the law by May ruption measured have submitted to taken in accordance ber 2003, and 2005. by the national the Inspectorate of with the law. presents a time- integrity survey; Government their bound action plan introducing special statement of in- for implementing anti-corruption come, assets and the Leadership courts to expedi- liabilities. Code. Most Minis- tiously deal with ters, Presidential cases of a corrupt Advisors, Perma- nature; and clear- nent Secretaries, ing the backlog of Directors, and cases under the Uganda Revenue Implementation Inspector General. Authority officials of the National have submitted to Anti-Corruption Implementation of the Inspectorate of Action Plan the National Anti- Government their commences. Corruption statement of in- Action Plan as the come, assets and framework to as- liabilities. sess progress in the fight against corruption contin- ues. Pay Reform Agreement on the objec- Cabinet approved Ministry of Public Ministry of Public Ministries of Pub- Submission of an tives and principles of a and published the Service and Minis- Service and lic Service and of inception report for pay reform strategy con- pay strategy, con- try of Finance, MOFFPED have Finance, Plan- a study to assess sistent with the MTEF and sistent with MTEF Planning, and Eco- made salary ad- ning, and Eco- the feasibility of improved service delivery. and improved public nomic Development justments consis- nomic Develop- control of the size service delivery. (have agreed on tent with the pay ment jointly of the public ser- target salary ad- reform strategy and commit to an vice and integrat- justments in line the MTEF. updated pay ing staffing and with the pay reform reform strategy, wage bill issues strategy, with the and target salary into the budget associated wage bill adjustments for process. reflected in the the medium term. MTEF. Public Ser- Ministry of Public Ministry of Public Ministry of Public Submission by Satisfactory vice Reform Service, in consul- Service has submit- Service and Minis- the Ministry of progress in imple- tation with other ted preliminary try of Finance, Public Service in menting new stakeholders, has findings on cost- Planning and Eco- collaboration with phase of Public developed a draft effectiveness and nomic Development Ministry of Service Reform strategic framework efficiency of em- have completed a Finance, Plan- Program reflected for the new phase ployment/staff utili- comprehensive ning and Eco- by accomplish- of public service zation in the social draft policy paper nomic Develop- ment of the agreed reform. sectors. on issues, meas- ment of a cabinet undertakings. ures, and modalities memorandum on for controlling the recommendations size of the public for controlling the administration and size of public ensuring cost effi- administration. ciency and effec- Also recommen- tiveness in Human dations for en- Resource develop- hancing cost ment of social sec- efficiency and tor establishment, effectiveness in and discussed this the public sector with social sector targeting: health, ministries. education, agri- Annex E Table 1. Prior Actions Required for Uganda’s Poverty Reduction Support Credits(PRSCs) I-VI—as reported by the respective Project Appraisal Documents Topic PRSC I PRSC II PRSC III PRSC IV PRSC V PRSC VI development. Submission to IDA of an Action Plan on the im- plementation of these measures by end of May 2005. 2. The Growth Agenda Agriculture MAAIF has com- Satisfactory im- Satisfactory im- pleted a draft insti- plementation of plementation of tutional review of core undertak- core undertakings, public funding of ings by April as agreed in the agricultural re- 2005, as agreed October 2004 Joint search. in the October PMA Annual Re- 2004 Joint PMA view and con- Annual Review firmed by the Oc- tober 2005 review. Land Sector MOFPED and The Ministry of MOWLE have Water, Lands and agreed on financial Environment and and institutional the Public Service arrangements for Commission have the implementation completed recruit- of the Land Sector ment of staff for the Strategic Plan. LSSP implementa- tion division Private Sec- Strengthen the tor coordinated ap- proach to improve the investment climate, and make satisfactory progress on agreed key in- vestment climate undertakings iden- tified in the PEAP (including reforms in institutions that can impede or facilitate the access of busi- nesses and poten- tial investors to formal registration, land titles, and courts). 3. Human Development Challenge Education Implemented agreed Satisfactory imple- Satisfactory imple- Satisfactory imple- Satisfactory im- Satisfactory im- commitments from the mentation of under- mentation of agreed mentation of under- plementation of plementation of the joint Government-donor takings agreed in education undertak- takings agreed in the undertakings undertakings education sector review. education sector ings from October education sector agreed in the agreed in the edu- review in April 2002 review. review in May 2003 education sector cation sector re- Launched a national re- 2001, and con- and confirmed by review in Novem- view in November cruitment campaign for firmed by October November 2003 ber 2003 and 2004 and con- 15,000 new teachers. 2001 review. review. confirmed by the firmed by the 2005 2004 review review, and of the undertakings agreed in the 2005 review and con- firmed by the Oc- Annex E Table 1. Prior Actions Required for Uganda’s Poverty Reduction Support Credits(PRSCs) I-VI—as reported by the respective Project Appraisal Documents Topic PRSC I PRSC II PRSC III PRSC IV PRSC V PRSC VI ments agreed in the joint mentation of under- mentation of agreed mentation of under- plementation of plementation of the Government-donor health takings agreed in health undertakings takings agreed in the undertakings undertakings sector review. health sector review from October 2002 health sector review agreed in the agreed in the in April 2001, and review. in April 2003, and health sector health sector re- confirmed by Octo- confirmed by No- review in Novem- view in November ber 2001 review. vember 2003 re- ber 2003, and 2004, and con- view. confirmed by the firmed by the 2005 2004 review review, and of the undertakings agreed in the 2005 review and con- firmed by the Oc- tober 2006 review. Water and Fully-staffed district water MOWLE/DWD has Ministry of Public Satisfactory imple- Satisfactory im- Satisfactory im- Sanitation and sanitation teams in established fully Service has ap- mentation of under- plementation of plementation of half of the districts. staffed technical proved reorganiza- takings agreed in undertakings undertakings support units. tion of DWD and water and sanitation agreed in water agreed in the wa- initiated its imple- sector review in and sanitation ter and sanitation mentation. September 2003 sector review in sector review in and confirmed by September 2003 September 2004 March 2004 review. and confirmed by and confirmed by the 2004 review. the 2005 review, and of the under- takings agreed in the 2005 review and confirmed by the September 2006 review. Finances for Settled debts of 5 billion The National Water Ministry of Finance, Water Corpo- Uganda shillings to the and Sewerage Cor- Planning and Eco- ration National Water and Sewe- poration (NWSC) nomic Development rage Corporation by gov- has adopted a for- and NWSC have ernment ministries, de- mula for periodic agreed on a time- partments, and agencies. tariff adjustment. bound action plan to settle the existing arrears to NWSC, and have acted to prevent new ones. 4. Other PRSP Introduction of monitoring Satisfactory Progress of results and annual out- progress in the put targets in the roads, implementation of education, health and the overall reform water and sanitation sec- program and PEAP, tors in the 2000/01- as indicated by the 2002/03 Budget Frame- PRSP progress work Paper. report. Local Gov- Satisfactory ernment progress on core system for undertakings service deli- agreed by JARD very 2004 and JARD 2005, including: (i) the Ministry of Public Service to review the mandate and structure of the Ministry of Local Government, or in the interim provide appropriate addi- Annex E Table 1. Prior Actions Required for Uganda’s Poverty Reduction Support Credits(PRSCs) I-VI—as reported by the respective Project Appraisal Documents Topic PRSC I PRSC II PRSC III PRSC IV PRSC V PRSC VI gap measure to address low ca- pacity in the minis- try to deliver on its mandate; (ii) Minis- try of Local Gov- ernment to identify an alternative source of revenue for local govern- ments, to be ap- proved by the gov- ernment during fiscal year 2006/7; (iii) Ministry of Finance Planning and Economic Development to provide compensa- tion to local gov- ernments for reve- nue losses related to the abolition of graduated tax (Ush 45 billion); and (iv) Government has submitted a bill to Parliament to pro- mote organized urban develop- ment and human settlement replac- ing the existing Town and Country Planning Act of 1964. Notes: DWD= Directorate of Water Development; IDA= International Development Association; IGG= Inspector General of Government; LSSP= Land Sector Strategic Plan; MAAIF= Ministry of Agriculture, Animal Industry and Fisheries; MOFPED= Ministry of Finance, Planning and Economic Development; MOPS= Ministry of Public Service; MOWLE= Ministry of Water, Lands and Environment; MTEF= Medium-Term Expenditure Framework; NWSC= National Water and Sewerage Corporation; PEAP= Poverty Eradication Action Plan; PER= Public Expenditure Review; PMA= Plan for Modernization of Agriculture; PRSC= Poverty Reduction Support Credit; PRSP= Poverty Reduction and Strategy Paper. Annex F: Government Comments No comments have been received from the Government. 145 Annex G: List of People Contacted International Development Partners AfDB Uganda Field Office Mr. Mukaila A. Ojelade, Resident Representative Mr. Ashie Mukungu, Macro-Economist Mr. Patrick O. Kahangire, Consultant, Water and Sanitation Mr. Asaph Nuwagira, Agricultural and Rural Development Specialist Mr. Mohamed Hedi Manai, Chief Evaluation Officer Mr. Daniel Rutabingwa, Investment Officer AfDB Tunis Office Mr. Albert Gakusi, Education Consultant Mr. Kechelfi Sarhan Mr. Charles Omolubi, Agriculture Economist Mr. Lawrence C. Tawan Mr. Justus Kabyemera Mr. Alex Mend Mr. Mecuria Mr. Jerimaih Muonga Mr. Gerard Kambou (now in World Bank, Washington) Mr. Abayomi Babalola Mr. Hemchand Rai Heeroo Department for International Development (UK) Mr. Richard Edwards, Deputy Head of Office-Programs Ms. Gwyeth Chittleborough, Senior Economic Adviser Mr. Jens-Peter Kamanga – Dybak, Governance Adviser Ms. Jill Fletcher, Statistics Adviser Dr. Alastair Robb, Regional Health Adviser Ms. Maja De Vibe, Governance Adviser Mr. Adrian Stone, Private Sector Development Adviser Embassy of Belgium Mr. Marc Denys, Counsellor for International Cooperation Embassy of Ireland Mr. Kevin Kelly, Charge d’Affairs Mr. Fintan Farrelly, Head of Development, Irish Aid 146 ANNEX G LIST OF PEOPLE CONTACTED Embassy of the Netherlands Mr. Michel Rentenaar, Deputy Head of Mission Mr. Jeroen de Lange, First Secretary Economic Advisor Embassy of Sweden Ms. Elly Kaganzi Mwesigwa, Program Officer: Trade, Private Sector & Rural Development Ms. Maria Selin, First Secretary, Infrastructure, Private Sector and Financial Development European Union Mr. Costas Tsilogiannis, First counselor/ Head of Operations Mr. Tom Vens, First Secretary, Economic Trade and Regional Integration Section Ms. Celine Prud’Homme, Attaché Programme Officer Royal Danish Embassy Mr. Warwick Thomson, Program Coordinator UNICEF Ms. Sheila Wamahiu, Chief - Education European Bank for Reconstruction and Development (EBRD) Mr. William Keenan, Senior Evaluation Manager Mr. A. Dennis Long, Senior Environmental Evaluation Manager, Evaluation Department Frankfurt School of Finance and Management Ms. Pamela Hedstrom, Resident Advisor, International Advisory Services Mr. Victor Agaba, Mortgage Infrastructure Officer, International Advisory Services KfW, Bankengruppe Dr. Britta Oltmann, Director, Special Programmes Uganda and Tanzania European Investment Bank (EIB) Mr. Ivory Yong Protzel, Senior Evaluator Banque Oust Africaine de Developpement (BOAD) Mr. Napo Zoumaro, Division Chief, Operations Evaluations Department The World Bank Group World Bank Uganda Field Office Mr. John McIntire, Country Director Uganda and Tanzania Ms. Kundhavi Kadiresan, Country Manager, Uganda Ms. Harriet Nannyonjo, Sr. Education Specialist Mr. Young Kim, Sr. Country Economist Mr. Paul Murphy, Consultant Ms. Mary Muduuli, Operations Officer 147 ANNEX G LIST OF PEOPLE CONTACTED Ms. Mary Bitekerezo, Sr. Social Development Specialist Mr. Madhur Gautam, Lead Economist, Agriculture & Rural Development, Sustainable De- velopment Department Ms. Grace Yabrudy, former Country Manager, Uganda Mr. Peter Okwero, Sr. Health Specialist Mr. Denyse Morin, Sr. Public Sector Development Specialist Mr. Dieter Schelling, Lead Transport Specialist Mr. Michael Wong, Sr. Private Sector Development Specialist Mr. Paul Baringanire, Energy Specialist Ms. Amanda Ellis, Lead Gender Specialist Washington Office Ms. Judy O’Connor, former Country Director Mr. Roy Canagarajah, Lead Economist Ms. Kathryn Hollifield, Acting Country Program Coordinator Mr. Dino Merotto, Senior Economist Mr. Lance Morrell, Lead Operations Officer Ms. Louise Fox, Lead Specialist Mr. Michael Crawford, Sr. Education Specialist Ms. Kathryn Ann Funk, Country Program Coordinator Mr. Malcolm Cosgrove-Davies, Sr. Energy Specialist Ms. Melaine Marlett, former Country Program Coordinator Ms. Christine Cornelius, Lead Operations Officer Ms. Xiaoyen Liang, Sr. Education Specialist International Finance Corporation Field Office Mr. Githuku Mwangi, Business Development Officer Mr. Dan Kasirye, Senior Investment Officer Mr. Paul B. Mukasa, Investment Officer Ms. Gertrude Mlachila, Regional Advisory Services Coordinator, Mr. Emmanuel Nyrikindy, manager, Infrastructure Advisory, Sub-Saharan Africa Mr. Victor Ocaya, Sr. Highway Engineer, Transport unit, Sub-Saharan Africa IFC Headquarters Mr. Javier Calvo, Principal Investment Officer Mr. Niels Martens, Principal Investment Officer Mr. German Cufre, Investment Officer Government of Uganda Bank of Uganda Prof. Emmanuel Tumusiime-Mutebile, Governor Mr. Michael Atingi-Ego, Executive Director Research Mr. Patrick Byabakama Kaberenge, Chief Internal Auditor Mr. Apollo Obbo, Director Commercial Banking Mr. Daniel L. Kaggwa, Deputy Director Commercial Banking Mr. Godfrey Yiga Masajja, Deputy Director Commercial Banking 148 ANNEX G LIST OF PEOPLE CONTACTED Competitiveness and Investment Climate Strategy Secretariat Mr. Peter Ngategize, National Coordinator Electricity Regulatory Authority Dr. F. B. Sebbowa, Chief Executive Officer Mr. P. J. Mwesige, Manager, Finance & Administrative Services Mr. B. M. Mutambi, Manager, Economic Regulation Ministry of Agriculture, Animal Industry and Fisheries Mr. Vincent R. Rubarema, Permanent Secretary Dr. William Olaho – Mukani, Director, Animal Resources Ms. Rhoda Tumusiime, Commissioner, Planning Unit Mr. B. Kerzire, Department of Agricultural Planning Mr. M. Otim, Department of Agricultural Planning Mr. Komayombi Bulegeya, Commissioner for Crops Mr. Deus Muhwezi, Director, Agribusiness Ministry of Education and Sports Mr. John Geoffrey Mbabazi, Director of Education Ministry of Energy and Mineral Development Mr. Paul Mubiru, Commissioner and Acting Permanent Secretary Mr. Godfrey Turyahikayo, Executive Director, Rural Electrification Agency Ministry of Finance, Planning and Economic Development Mr. Chris Kassami, Permanent Secretary Mr. M. Bekabye, Technical Advisor, Economic Affairs Mr. Mugambe, Commissioner Budget Mr. Charles Victor Byaruhanga, Budget Advisor Ms. Margaret Kakande, Poverty Analyst- Poverty Monitoring & Analyst Unit Mr. Keith J. Muhakanizi, Deputy Secretary to Treasury Mr. Peter Ngategize, National Coordinator Mr. Patrick Ocailap, Director Budget Mr. David Ssebabi, Director, Privatisation Unit Ms. Monica Namuli, Programme Assistant, Privatisation Unit Mr. Bernard Oundo, Legal Assistant Ministry of Finance, Secretary of Treasury Mr. Keith J. Muhakanizi, Deputy Secretary to Treasury Ministry of Gender, Labor & Social Development Mr. Steven Kasaija, Commissioner -Planning Ministry of Health Ms. Mary L. Nannono, Permanent Secretary 149 ANNEX G LIST OF PEOPLE CONTACTED Ministry of Local Government Mr. Tom Matte, Director Local Government Administration Inspection Mr. Samuel A.A. Amule, Commissioner, Local Authorities Inspection Mr. Paul Kasule-Muncasa, Program Coordinator Ministry of Water and Environment Mr. Sottie L. M. Bomukama, Director/Acting Permanent Secretary, Directorate of Water Development Mr. S. Otuba, AC-Planning Mr. C. Tindimugaya, Agriculture Commissioner, Water Regulation Mr. C.H. Azid, Agriculture A/C (W/A) Mr. G. Kimanzi, Agriculture Commissioner (RWS) Mr. C. E. Okwaja, US F&A Mr. R. Cong, Agriculture Commissioner (WJP) Mr. D. Ssozi, Agriculture Assistant Commissioner (WSLD) Mr. J. Kasiita, Project Coordinator, STWSP-MWE Ministry of Works and Transport Mr. F. M. Byaruhanga. Agriculture Director Mr. Kajuna Benon, Transport Economist National Agricultural Research Organization Mr. Denis T. Kyetere, Director General Mr. Sylvester Dickson Baguma, Principal Research Officer, M&E and MIS National Environment Management Authority Dr. Gerald Musoke Sawula, Deputy Executive Director Mr. Francis Ogwal, Natural Resource Management Specialist Mr. Waiswa Ayazika Arnold, Environmental Impact Assessment Coordinator National Forestry Authority Mr. Michael Malinga, Tree Improvement supervisor National Planning Authority Mr. Amos Lugoloobi. Deputy Executive Director Mr. Dhizaala Sanon Moses, Co-Ordinator Research & Statistics Mr. John Bosco Kintu –Kavuma, Economic Analyst Ms. Sandra Kirenga, Assistant Statistician Office of the Prime Minister Mr. David Rider Smith, Advisor – Monitoring, Evaluation and Public sector Reform, Na- tional Integrated M&E Strategy Secretariat Mr. Peter Ssentongo, Assistant Commissioner, Coordination and Monitoring 150 ANNEX G LIST OF PEOPLE CONTACTED Competitiveness and Investment Climate Secretariat Mr. Peter Ngategize, National Coordinator Ms. Angela Katama, Private Sector Expert Ms. Catherine Ssekimpi, Project Support Officer, M&E National Social Security Fund Dr. Mondo Kagonyera, Deputy Managing Director Ms. Grace Isabirye, Chief Finance Officer Uganda Electricity Transmission Company (UETCL) Mr. Eriasi Kiyemba, Managing Director, CEO Uganda Investment Authority Dr. Maggie Kigozi, Executive Director Mr. Lawrence Byensi, Director Private Sector Celtel Uganda Mr. Yesse Oenga, Managing Director Mr. Enid Edroma, Legal and Regulatory Manager DFCU Bank Mr. Moses Kibirige, Executive Director Orient Bank Ltd. Mr. Mark Horwood, Executive Director Private Sector Foundation of Uganda (PSFU) Ms. Juliet Mpanga Byaruhanga, Project Manager Ms. Ruth B. Musoke, Director Member Services Ms. Carolyn N. Ndawula, Policy Analyst Uganda Microfinance Union Mr. Charles Nalyaali, Chief Executive Officer Plan for Modernization of Agriculture (PMA) Dr. Godfrey Bahiigwa, Director Population Secretariat Mr. Zirarena Charles, Ag. Director Rural Electricity Agency Mr. Godfrey R. Turyahikayo, Executive Director Uganda Bureau of Statistics 151 ANNEX G LIST OF PEOPLE CONTACTED Mr. David Rider, Adviser, Monitoring, Evaluation and Public Sector Reform Nongovernmental Organizations Africare Mr. Anthony A. Ngosi, Country Representative Community Management Services (CMS) Kanyomozi Yonasani Bankobeza, Consultant Development Finance Company of Uganda Mr. Moses Kibirige, Executive Director Economic Policy Research Center Mr. Lawrence Bategeka, Research Fellow Makerere University Ms. Nakanyike B. Musisi, Director, Makerere Institute of Social Research Mr. Katunguka Samwiri, Task Manager, Innovations at Makerere Commitee NEPAD Ms. Silvia Angey Ufoyuru, Programme Manager, NEPAD/APRM Unit Nongovernmental Organization Forum Mr. Warren Nyamugasira, Executive Director Private Sector Foundation of Uganda (PSFU) Mr. Gabriel Hatega, Executive Director Mr. Francis Kisirinya, Director Finance Mr. Geoffrey Ssebuggwawo, director – BUDS-ERT Mr. Gideon Badagawa, Director, Policy Advocacy Roads Agency Formation Unit (RAFU) Mr. Francis Byaruhanga, Director Uganda Debt Network Ms. Daisy Owomugasho, Ag. Executive Director Mr. Julius Kapwepwe Mishambi, Programme Officer Uganda Manufacturers Association Mr. James Kalibbala, Chairman, UFA Mr. Andrew Luce Kaggwa, Policy Officer Mr. Sikander Lalani, Chairman & Managing Director, Roofings Ltd. Ms. Jocelyn K. Ucanda, Chief Manager Marketing, National Insurance Corporation 152 ANNEX G LIST OF PEOPLE CONTACTED Mr. J. Katarikawe, Policy Economist UMEME Mr. Ian Williams, Managing Director Mr. M. Francis, Chief Technical Officer Mr. S. Zimbe, Chief Customer Service Manager Uganda National Agro-Input Dealers Association (UNADA) Mr. Wilfred Thembo – Mwesigwa, Executive Secretary Project Field Visits Mr. Joseph Lumu Mazuuku, Mayor, Mpigi Town Council Local Government Kakiri Farmers Development Cooperative Society (KAFADECO) Private Sector Celtel Uganda Mr. Yesse Oenga, Managing Director Mr. Enid Edroma, Legal and Regulatory Manager DFCU Bank Mr. Moses Kibirige, Executive Director Orient Bank Ltd. Mr. Mark Horwood, Executive Director Private Sector Foundation of Uganda (PSFU) Ms. Juliet Mpanga Byaruhanga, Project Manager Ms. Ruth B. Musoke, Director Member Services Ms. Carolyn N. Ndawula, Policy Analyst Uganda Microfinance Union Mr. Charles Nalyaali, Chief Executive Officer 153 Annex H: References ————. 2000. “Agriculture and Rural Development Sector Policy.” Tunis. Byaruhanga Charles. 2004. “Managing Investment Climate Reform: Case Ahmad, Ehtisham, Giorgio Brosio and Maria Study of Uganda Gonzalez. 2006. “Uganda: Managing Telecommunications.” Background More Effective Decentralization.” paper prepared for the World IMF Working Paper 279, Development Report. Washington, D.C.: IMF. Cline, William. 2007. “Global Warming and AfDB 2008. “Review of Bank Assistance Agriculture: Impact Estimate by Effectiveness in the Education Sector Country.” Center for Global in Uganda (1985-2007).” Tunis: Development and Peterson Institute OPEV Draft Report. for International Economics. ————. 2007. “Investing in Africa’s Future Washington. D.C. – The ADB in the 21st Century.” (wwwcgdev.org/content/publicatio Report of the High Level Panel. ns/detail/14090#Chpt) Tunis. Collier, Paul and Ritva Reiniker. ————. 2006a. “Evaluation of General 2001.“Reconstruction and Budget Support – Uganda Country Liberalization: An Overview.” In Paper: A Joint Evaluation of General Reinikka, Ritva and Paul Collier (eds, Budget Support 1994-2004.” Tunis, op cit). May. DANIDA.Danish International Development ————. 2006b.“Process Review of Agency. Ministry of Foreign Affairs Harmonization/Joint Assistance of Denmark. 2006. “Danish Strategy Process in Five (Regional Assistance to Uganda 1987-2005.” Member Countries) RMCs.” Tunis.— December. ———. . 2005. “Joint Assistance Dove, Linda A., Angela W. Ransom, and Strategy 2005-2009.” Tunis. Peter S. Sherer. 2003. “A Strategic ————. 2004. “Republic of Uganda: Partnership between the African Country Assistance Evaluation,” Development Bank and the World Operations Evaluation Department. Bank: Summary of the External Tunis. Review Report.” Tunis: AfDB. ————. 2003. “Republic of Uganda: Economic Commission for Africa. 2005. Country Strategy Paper 2002-2004.” “Land Tenure Systems and their Country Operations Department, Impact on Food Security and North, East and South. Tunis. Sustainable Development in Africa.” ECA/ADD/05/09. Tenure systems ————. 2001. “Republic of Uganda: and their impact. Addis Ababa, Evaluation of General Budget Ethiopia. Support – Uganda Country Paper.” Tunis. FINScope. 2007. “Results of a national survey on access to financial services in Uganda.” Final Report. Kampala, Uganda. 154 Annex H References Gauthier, Bernard. 2006. “PETS-QSDS in of Finance, Planning and Economic Sub-Saharan Africa: A Stocktaking Development. Study.” Commissioned by the World ————. 2006g. “Annual Performance Bank, Washington DC. Monitoring and Evaluation Report Government of Uganda (2007a), The 2006 for Financial Year July 2005- June Annual PEAP Implementation 2006. Kampala: Monitoring and Review: Main Report, Kampala Evaluation Division, Agricultural Planning Department. ————. 2007b. “Small Hydropower Development in Uganda.” ————. 2006h. Uganda National Household Electricity Regulatory Authority: Survey (2005/06) Report on the Socio- Kampala. Economic Module. Kampala: Ministry of Finance, Planning and Economic ————. 2007c. “Three-Year Business Plan Development. (2007-2010).” Electricity Regulatory Authority: Kampala.Government of ————. 2004a. “Poverty Eradication Action Uganda. 2007d. “Peace, Plan.” (2004/5-2007/8). Rehabilitation and Development Kampala: Ministry of Finance, Plan (PRDP) for Northern Uganda Planning and Economic (PRDP (2007-2010).” Office of the Development. Prime Minister: Kampala, Uganda. ————. (2004b), Education Sector Strategic ————. 2006a. “State of the Environment Plan, 2004-2015, Kampala: Ministry Report for Uganda 2006/2007.” of Education and Sport Kampala. ————. 2004c. Policy Statement for MAAIF ————. 2006b. “Water and Sanitation for the Budget Financial Year 2004/05. Sector Report.” Kampala: Presented to Parliament for Budget Ministry of Water and Sanitation. Debate by the Minister of Agriculture, Animal Industry and ————. 2006c. “National Agricultural Fisheries. Research Act.” Entebbe, Uganda: Ministry of Agriculture, Animal ————. 2004d. Policy Statement for MAAIF Industry and Fisheries. for the Budget Financial Year 2004/05. Presented to Parliament for Budget ————. 2006d. “Policy Statement for Debate by the Minister of MAAIF for the Financial Year Agriculture, Animal Industry and 2006/07.” Presented to Parliament Fisheries. for Debate by Eng. Hilary O. Onek (Member of Parliament). Kampala: ————. 2004e. “The National Fisheries Ministry of Agriculture, Animal Policy (Final Version).” Entebbe: Industry and Fisheries (MAAIF). Ministry of Agriculture, Animal Industry and Fisheries. ————. 2006e. Policy Statement for MAAIF for the Financial Year 2006/07. , ————. 2004f. Poverty Eradication Action Presented to Parliament for Debate Plan (PEAP) 2004/5 – 2007/8. by Eng. Hilary O. Onek (Member of Kampala: Ministry of Finance, Parliament), Kampala: Ministry of Planning and Economic Agriculture, Animal Industry and Development. Fisheries. ————. 2003a. Policy Statement for MAAIF ————. 2006f. Uganda National Household for the Budget Financial Year 2003/04. Survey (2005/06) Report on the Socio- Presented to Parliament for Budget Economic Model. Kampala: Ministry Debate by Dr. Kisamba Mugerwa (Member of Parliament). Kampala: 155 Annex H References Ministry of Agriculture, Animal Support Credit I-IV. Report Number Industry and Fisheries. 48942. ————. 2003b. Policy Statement for MAAIF Miovic, Peter. 2004. “Poverty Reduction for the Budget financial Year 2003/0. Support Credits in Uganda: Results Presented to Parliament for Budget of a Stocktaking Study.” World Bank, Debate by Dr. Kisamba Mugerwa June 29. World Bank Africa Region, (Member of Parliament). Kampala: Washington DC. Ministry of Agriculture, Animal Moon, Allister (1997), Uganda’s Budget Industry and Fisheries. Framework, Presentation to the ————. 2003c. Uganda National Household Parliament of Uganda. Public Survey (2002/03) Report on the Socio- Expenditure Review Fiscal year 97- Economic Survey. Kampala: Ministry 98, December 12. Washington DC: of Finance, Planning and Economic World Bank. Development. National Environment Management ————. 2003d. Uganda National Household Authority. 2004. State of the Survey (2002/03) Report on the Socio- Environment Report for Uganda. Economic Survey.Kampala: Ministry New Partnership for Africa’s Development of Finance, Planning and Economic NEPAD. 2007. “The Uganda Country Development. Self Assessment Report and Program ————. 2002a. “The Energy Policy for of Action.” Kampala, Uganda. Uganda.” Kampala: Ministry of African Peer Review Mechanism Energy. (APRM) National Commission. ————. 2002b. The Renewable Energy OECD-DAC. 2006. “Evaluation of General Policy for Uganda. Kampala: Budget Support – Uganda Country Ministry of Energy. Report: A Joint Evaluation of General Budget Support 1994-2004.” ————. 2001a. “Energy for Rural Transformation Project: Project OECD. Evaluation of Joint Budget Support: Implementation Plan.” Kampala. Synthesis Report: 1994-2004, Burkino Faso, Malawi, Mozambique, ————. 2001b. “National Agricultural Nicaragua, Rwanda, Uganda, Advisory Services Act.” Entebbe, Vietnam. See: Uganda: Ministry of Agriculture, http://www.oecd.org/dataoecd/47 Animal Industry and Fisheries. /51/35074789.pdf ————. 2000a. “Land Sector Strategic Plan: Overseas Development Institute. 2007. 2001 – 2011.” Kampala: Ministry of “Interim Report of the Uganda Water, Lands and Environment. Donor Division of Labor Exercise.” ————. 2000b. “Plan for Modernization of London: March. Agriculture: Eradicating Poverty in PEFA (Public Expenditure and Financial Uganda. Government Strategy and Accountability). 2006. Public Operational Framework.” Kampala: Financial Management Performance Ministry of Agriculture, Animal Report and Update of CIFA (Country Industry and Fisheries, and Ministry Integrated Fiduciary Assessment) of Finance, Planning and Economic Action Plan. Final Report. July. Development, Reinikka, Ritva and Paul Collier. 2001. IEG. Independent Evaluation Group. “Uganda’s Recovery: The Role of Project Performance Assessment Farms, Firms, and Government.” Report. Uganda Poverty Reduction Washington DC: The World Bank. 156 Annex H References Republic of Uganda. 2006. “Uganda’s Plan ————. 2007c. Republic of Uganda: Joint for the Modernisation of Agriculture IDA-IMF Staff Advisory Note on the (PMA): A Joint Evaluation.” Poverty Reduction Strategy Paper Kampala: PMA Secretariat. Annual Progress Report. Report No. 39939-UG. Rudaheranwa, Nichodemus. 2007. “Production Impact of Policy ————. 2006. Uganda: Poverty and Reforms in Uganda’s Energy Sector Vulnerability Assessment. PREM since 2001.” Kampala: Economic Report No. 36996-UG. Policy Research Centre. Draft. ————. 2005a. Joint Assistance Strategy for Tangri, Roger and Andrew Mwenda. 2001. the Republic of Uganda. December Corruption and Cronyism in Uganda’s 14. Report No. 34310-UG. Privatization in the 1990s in African ————.2005b. The World Bank in Uganda - Affairs. (100): 117-133. Country Brief, 2005-2006. Tumusiime-Mutebile, Emmanuel. 1998. Washington DC. Opening the Budget to Stakeholders: Use ————. 2004. The World Bank: Uganda of MTEF/PER as a Catalyst for Client Survey 2003. Washington DC Enhanced Accountability. Presentation (Draft). to Budget Process and Foreign Aid, Regional Research Project on Public ————.2000. Country Assistance Strategy. Expenditures Workshop. November Africa Region. 2, Washington DC: World Bank. ————.2001. Uganda Country Assistance UNDP. 2007. Uganda Human Development Evaluation (Two Volumes). IEG Report 2007: Rediscovering Report No. 22120. Washington, D.C. Agriculture for Human Development. Kampala. UNEP/IISD 2005. Connecting Poverty and Ecosystem Service, Focus on Uganda. International Institute for Sustainable Development and United Nations Environmental Programme. Nairobi, Kenya. http://www.unep.org World Bank. 2008. World Development Indicators. Washington DC. ————. 2007a. Uganda: Moving Beyond Recovery. Investment and Behaviour Change, For Growth: Country Economic Memorandum, Volumes I and II, Poverty Reduction and Economic Management Unit. Africa Region (Report No. 39221- UG). ————. 2007b.Uganda: Fiscal Policy for Growth – Public Expenditure Review 2007. Volume I and II. PREM2, Africa Region (Report No. 40161-UG). 157 Endnotes Chapter 1 1. The National Resistance Movement took power in 1986. Under the National Resistance Movement government’s Economic Recovery Program, Uganda began a period of improved macroeconomic stabili- ty (see Collier and Reiniker 2001). 2. During 1990-2006, average per capita growth for Uganda was estimated at 2.9 percent compared to 0.5 percent for sub-Saharan Africa. Reserves, measured in months of imports, increased from 0.7 in 1990 to a peak of 7.0 in 2001, and are estimated at 6.2 in 2006 (World Bank Development Indicators, April 2008). 3. Internal conflicts have persisted even under the National Resistance Movement regime, among them the Intongwa conflict in the Buganda region; the Allied Democratic Forces conflict in the Western Region; the People’s Redemption Army uprising in the South-Western Region; and limited conflicts in the West- ern, West Nile, and Northern Regions, including the ongoing Lord’s Resistance Army-led conflict. For the Northern Region, a Peace Recovery and Development Plan was prepared in 2007, but effective implemen- tation of this plan will depend on the signing of a durable peace accord. 4. Consultations were held with the other partners in the UJAS. Although their participation in the eval- uation could not be worked out for a variety of logistical and scheduling reasons, they responded favora- bly to contacts by the evaluation team. Looking forward, several other partners have now joined (or ex- pressed a wish to join) in the UJAS. In general, although one would expect that joint evaluation is more cost-effective than the equivalent separate evaluations, it is also probable that, as the number of partners increases, transactions costs would also increase and eventually become prohibitive, outweighing the ad- vantages of joint evaluation. A priori, it is difficult to generalize as to the number of partners needed to reach the point of diseconomies of scale, as the point at which this happens is likely to be context-specific. Chapter 2 1. The fiscal year of the World Bank begins on July 1 and ends on June 30 and that of the AfDB begins on January 1 and ends on December 31 (that is on calendar year basis). 2. The UJAS was prepared in 2005 by the World Bank, the AfDB, and five other development partners: Germany, the Netherlands, Norway, Sweden, and the United Kingdom (Department for International Development (UK)). Austria, Denmark, the European Commission, and Ireland have also signed on to the strategy. 3. Implementation of the World Bank-CAS was extended by two years due to delay in the preparation of the government’s updated Poverty Eradication Action Plan (PEAP), and the longer drafting period re- quired for the UJAS given the need for close coordination among the development partners on the new strategy. 4. The IFC’s strategy under the UJAS, evaluated in Chapter 6, also seeks to: (i) improve the investment climate; (ii) build the capacity of SMEs and microenterprises, as well as the capacity of the institutions that support them; and (iii) provide proactive support for project development in the financial, agribusi- ness, and infrastructure sectors. 5. It is not clear what criteria were used by World Bank in selecting its areas of focus. A division of labor exercise is underway to specify the areas of focus of the development partners in Uganda in order to en- sure complementarities among programs (see Chapter 6). 6. Cost data are easily available; however, output data are not. 7. The policy dialogue and associated measures supported (prior actions) under the PRSC centered, for the most part, on public sector reform, especially public expenditures. Regarding the use of resources, the 158 focus of the PRSCs was to increase allocation to the Poverty Action Fund. It should be noted that the allo- cation of PRSC resources is notional and that some of the sectors received significantly more limited funding from the budget than indicated in table 1. Chapter 3 1. The government identified the following elements of political governance: prevention and reduction of intra- and inter-state conflicts; constitutional democracy, promotion and protection of rights; upholding of the separation of power; the promotion and protection of the rights of women as well as children and young people; and the promotion and protection of the rights of vulnerable groups, internally displaced persons, refugees, and disabled persons (see New Partnership for Africa’s Development (NEPAD) 2007). 2. The result of the procurement reform included: (i) the establishment of the Contract Committee at the sectoral level; (ii) the harmonization of local government procurement regulations with those of the cen- tral government; (iii) the creation of procurement units in all ministries, departments, and agencies; and (iv) the incorporation of procurement plans in the expenditure programs of the sector ministries. 3. The Worldwide Governance Indicator project reports aggregate the individual governance indicators for 212 countries and territories over the period 1996-2006 for six dimensions of governance: voice and accountability, political stability and absence of violence, government effectiveness, regulatory quality, rule of law, and control of corruption. Refer to: www. worldbank.org/wbi/governance. 4. Transparency International’s Corruption Perception Index (CPI) also indicates that Uganda’s ranking improved in a limited way from 1.9 out of 10 in 2001 to 2.8 out of 10 in 2007, though this is still very low. The CPI ranks countries in terms of the degree to which corruption is perceived to exist among public of- ficials and politicians. Refer to: www.transparency.org/policy_research/surveys_indices/cpi Chapter 4 1. The World Bank Country Economic Memorandum (World Bank 2007a, paragraph 1.38) reports that the incremental capital-output ratio (ICOR) for the period 1992-96 was 1.8. This increased slightly to 2.2 for the period 1996—2004. It concluded that the ICORs are very low and are likely to increase rapidly with improved utilization of capacity. 2. The Country Economic Memorandum (World Bank 2007a) was prepared jointly with government au- thorities and local researchers. It had been 10 years since the last Country Economic Memorandum had been prepared. The Country Economic Memorandum explored constraints to growth, putting the World Bank again in the forefront of thinking about economic growth in Uganda. The analytical work concurs on the need to give economic growth a higher priority and suggests a focus on removing growth con- straints. The Country Operations Unit of the World Bank has underscored that because of the participato- ry approach adopted in preparing the Country Economic Memorandum, although completed late in the period under review, it did contribute significantly to the growth discussion for the 2004 PEAP and sub- sequent UJAS. 3. Some stakeholders interviewed by the IEG/OPEV team noted that there were many irregularities asso- ciated with the privatization process and felt that the people of Uganda lost a great deal of funds in the process. 4. These include: promoting private sector competitiveness, increased agriculture production, increased and more effective production of nonagriculture goods and services, strengthened infrastructure in sup- port of increased products of goods and services, strengthened environment and natural resources man- agement, and strengthened financial sector. 159 5. The documentation for Power IV presented a risk analysis of the electricity expansion plan under im- plementation and noted that the energy balance would be tight until the completion of the Bujagali hy- droelectric power plant. Construction of complementary thermal capacity was considered and dismissed. The internal documentation is ambiguous and often misrepresents the true contribution to capacity of the extension of Owen Falls. The UJAS, coming after the postponement of the Bujagali hydroelectric power plant initiative, did put forth a strategy on energy concomitant with the magnitude of the risk and the cri- sis. Oddly, the results matrix emphasizes rural electrification and the production of alternative energy. In addition, there was no analysis of the risks implicit in the proposed overhaul of the institutional frame- work. 6. If fishing (mostly monetary) is added, the percentage increases to 15 percent of GDP. The rest of the pro- duction is mixed between monetary and nonmonetary. For food crops, which comprise the bulk of the pro- duction (64 percent of the total agriculture value added), 47 percent of the production is monetized. Chapter 5 1. The four-child limit was soon abandoned, and today all school-aged children are eligible for free pri- mary education. 2. These initiatives were supported by the Education Strategic Investment Plan of 1998-2003 (ESIP) and the Education Sector Strategic Plan of 2004-15 (ESSP), both of which were anchored in the PEAP. 3. The World Bank PRSC Stocktaking Paper; Lister et al. (2006); Joint Evaluation of General Budget Sup- port, 1994-2004, Uganda Country Report; and the draft PPAR for PRSCs I-IV. 4. The HIV/AIDS Control Project became effective in fiscal year 2001, and at that time was the only major source of external funding for HIV/AIDS. That changed when the Global Fund and, later, PEPFAR (U.S. President’s Emergency Plan for AIDS Relief) took up operations in Uganda. 5. Education II was preceded by Education I (1990), which supported the improvement of the quality of scientific and technical teacher training. 6. It should also be noted that government data tend to overstate achievements compared to results from household surveys. This is true for the contraceptive uptake indicator “couple years of protection,” for example. The latest Demographic and Health Survey does not indicate any significant increase of contra- ceptive prevalence, and the PEAP indicator has steadily gone up. Similarly, vaccination rates look better in government tabulations than in household surveys. 7. The Bank is represented in 3 of 10 sector working groups under the division of labor exercise. 8. Figures vary somewhat, but this is the most frequently quoted one for 2005 (Uganda Demographic and Health Survey 2006, United Nations Development Programme Human Development Report 2007, United Nations Population Division database). Other sources quote up to 7.1 births per woman (World Bank World Development Indicators Database for 2005). Chapter 7 1. OECD-DAC figures tend to underestimate aid flows in recent years because of delays in reporting. Figures tend to be larger than similar information obtained from government sources because of some disbursements attributable to the country, especially from regional programs that are undertaken outside the country. 2. In Uganda, general budget support includes: sector budget support that is notionally earmarked to a particular sector, such as SWAps; support that is notionally earmarked to the PAF; and support that is not earmarked to any sector, such as the World Bank PRSC (Refer to OECD-DAC2006, p. S3). 160 3. General budget support was first used in Uganda in 1998 with the funding of the PAF. The introduc- tion of the PRSC by the World Bank in 2001 marked the first full general budget support designed specif- ically to support Uganda in the implementation of the PEAP and is not earmarked to any sector. 4. Refer to PEAP Volume 3, Annex I (2001). The undertakings in the Partnership Principles by the Devel- opment Partners predated the Paris Declaration of 2005. 5. See the 1998 report commissioned by the two banks, Study on Strategic Partnership between the World Bank and the African Development Bank, and follow-up Memorandum of Understanding of March 2000 and related evaluation reports by Dove, Ransom, and Sherer 2003. 6. Since the presentation of the Uganda PEAP (PRSP) to the Boards of the World Bank and IMF in May 2000, the latter has provided support through PRGFs. 7. Subsequently, Austria, Denmark, the European Commission, and Ireland have signed up to UJAS. 8. The idea of preparing a joint strategy was first discussed in the fall of 2003, ahead of the PEAP of 2004. The first comprehensive draft was shared with government, civil society, and other development partners in April 2005, and the final UJAS was issued in December 2005 (refer to World Bank 2005a, p. viii). Part of the delay in completing the UJAS was caused by the delayed PEAP. 9 In effect, the AfDB Board of Governors has adopted a resolution to remove this procurement restriction, which became effective in March 2009. 10. The Uganda Partner Division of Labor Exercise was first undertaken during June-December 2006. It builds on harmonization and alignment activities underway in Uganda since the 1990s. 11. The Progress Assessment Framework is the matrix used by the UJAS partners in assessing the contri- butions of their specific interventions to outcomes. The UJAS matrix is fully consistent with the PEAP re- sult matrix, but also contains milestones that are specific to the partners’ interventions. 12. An example is the case with the follow-up Technical Assistance for Makarere University for local gov- ernment capacity building. Annex B 1. In this note, assistance program refers to products and services generated in support of the economic development of a client country over a specified period of time, and client refers to the country that rece- ives the benefits of that program. Annex C 1. A subset of PEAP policy actions from annual PEAP results and policy matrix. 161