Uganda: Improved Public Service Delivery

Published: Tue, 15 Sep 2009 14:05:37 GMT

Despite almost two decades of macroeconomic stability, Uganda remains in the lower tier of low-income developing countries and carries substantial debt. Local service delivery lags as central and local governments face capacity constraints. In the mid-1990s the Government of Uganda devised a strategy for economic reform, the cornerstone of which was implementation of a decentralized system of governance with improved service delivery. Accountability at the local level, transparent and participatory decision-making, and monitoring of implementation were vital to the implementation of this strategy.

IDA funded two projects in Uganda, the Local Government Development Program and the Second Local Government Development Project (LGDP II), to support local governments and communities in better managing economic and social development. LGDP I was designed to support decentralization through a sustainable, timely, and value-conscious system of transferring development funds from the central to local governments. The second project continued this support, with additional attention to building local government capacity.


By 2007, all major local governments had a three-year rolling development plan and almost all submitted final accounts on time to the Ugandan Office of the Auditor General. Many of these local governments registered an increase in their revenue base of 20 percent or more.


Highlights:
- Several innovations continue beyond the lifetime of the project. The Local Development Grants are now funded by the Government of Uganda, and the Capacity Building Grants have become institutionalized.

- Policy reforms under this project were accepted and implemented by government because there was a high level of ownership. Government played an important role in the preparation of analytical work, including identifying issues, preparing terms of reference, and recruiting and supervising consultants. IDA supported this process through advice and technical assistance.

- The project has also been instrumental in creating a national ‘market’ for training. Local governments procure training from a list of accredited private and public providers in a competitive bidding process.

- LGDP-financed projects have generated significant employment growth at the local level and increased opportunities for female workers.

- The project has provided discretionary development budget for local governments to deliver basic social services (primary education, primary health care, water & sanitation, roads, and agriculture extension) based on local needs and demands – services previously provided by sector ministries.


- IDA contributed US$80.9 million to fund LGDP I with an additional US$9 million funded by both the Government of Uganda and participating local governments.
- Under LGDP 1, IDA assisted with the development of the software necessary for systematic input and output monitoring.
- IDA’ support for LGDP II came in two bundles: a US$50 million credit and a US$75 million grant (for debt vulnerable countries).
- IDA’s resources were provided increasingly as budget support when Uganda developed a systematic budget-performance monitoring tool that reports on resource utilization.


The success of LGDP I attracted four development partners who joined IDA in funding LGDP II: Danish International Assistance contributed US$2.40 million, the Government of Austria contributed US$0.30 million, the Government of Ireland contributed US$7.50 million and the Netherlands government provided US$15 million.



In parallel with LGDP I and II, IDA financed the Second Economic and Financial Management Project (EFMP II) to improve the effectiveness of public expenditure management. In response to EFMP II and LGDP II, the government requested a follow-up operation. IDA is currently supporting the Local Government Management and Services Delivery Adaptable Program Loan with a US$170 million credit.


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