Perspectives and emerging issues

of Uganda’s external development finance landscape

By Ezra Francis Munyambonera

In most developing countries, there are observed changes in EDF by source, nature, and mechanisms. Traditional overseas development assistance is reducing and making room for new important state players such as China, India, Brazil, the Gulf Countries and South Korea. In addition, philanthropies and private organizations are emerging as major players for EDF in their own right. For developing countries like Uganda, this emerging landscape brings new opportunities as well as challenges and risks in meeting their development priorities.

This study on Uganda’s current EDF landscape was conducted by Economic Policy Research Center (EPRC) in collaboration with the Ministry of Finance, Planning and Economic Development (MFPED) for the period 2015/16 and commissioned by the African Center for Economic Transformation (ACET). It aimed at reviewing and assessing the changing behavior of Uganda’s institutions towards development cooperation in the emerging EDF landscape. More specifically, the study examined how Uganda mobilises, allocates and manages a variety of external resource inflows, and how the country manages relationships with the development partners (DPs).

The study was guided by five specific objectives as listed below:

i)To assess how Uganda has been accessing external development finance in the past decade in light of the changing external environment.
ii) To provide an understanding of how government systems (institutional structures, processes and coordination) are adapting both to influence the intermediate targets of external resource inflows and to ensure efficient mobilization and allocation of development finance.
iii)To assess how Uganda is engaging and managing the new state and non-state actors.
iv) To assess the extent to which traditional partners are adapting and aligning their in-country assistance programs in the new EDF environment.
v)To explore the scope of the use of technology platforms to enhance the availability, quality, and timeliness of data that will enhance monitoring and evaluation of the use of development finance.

Various methods were employed to implement the study including document review, secondary data analysis of EDF, key informant interviews, and case study analysis of projects that had been financed under EDF.
This brief provides a synthesis of the findings of the responses from the key informant interviews based on the five specific objectives. The institutions interviewed included:
MFPED, National Planning Authority (NPA), Office of the Auditor General (OAG), and other Ministries, Departments and Agencies (MDAs) from the government; the World Bank Group, the African Development Bank (AfDB), the European Union (EU), the International Monetary Fund (IMF), the Japanese embassy, and other embassies and aid agencies among traditional DPs; the Chinese embassy for the non-traditional DPs; Uganda Debt Network and Uganda NGO Forum for the civil society representatives; and the Strømme Foundation representing philanthropist groups.

Findings and Discussion

Crosscutting Issues
In assessing how Uganda has been accessing EDF, all the respondents agreed that there were laws and guidelines in place that directed access by government to all forms of EDF, but that these guidelines were not always followed; both by the government and all groups of development partners.
In terms of government systems for EDF mobilization, respondents agreed that systems existed to ensure EDF sustainability, but that there was no full implementation. This they stated, was exacerbated by poor coordination among MDAs especially MoFPED and BOU, the key institutions that monitor EDF flows. Respondents also noted that although there was increased budget transparency, corruption remained a problem.

 

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