## _cr10142

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---

### Overview and main findings
- The NDP was approved by cabinet on February 17, 2010 and was submitted to the International Development Association (IDA) and the International Monetary Fund (IMF) on March 9, 2010.
- The NDP is the first in a series of six plans intended to move the country towards the national vision of a transformed modern economy in the next 30 years. The five-year NDP will guide policies and resource allocation over the period 2010/11 to 2014/15.
- The NDP succeeds the third Poverty Eradication Action Plan (PEAP) which expires in June 2010.
- The NDP was developed through an extensive country-driven consultative process over 2008–2009, combining bottom-up and top-down approaches and reflecting a broad national consensus.
- Strategic shift: from “poverty reduction” to “structural transformation” with government playing a strategic role in removing barriers to growth and promoting private sector involvement in selected priority areas.
- Four priority targets identified:
  - human resources development through health, education and skills building;
  - boosting physical infrastructure, particularly in energy and transportation;
  - supporting science, technology and innovation;
  - facilitating private access to critical production inputs, particularly in agriculture.
- Sixteen national “flagship” projects are proposed to spearhead achievement of these targets.
- Overall assessment: development goals are well focused and adapted to current needs; macroeconomic framework and sector-specific plans are generally compatible with long-term vision.

### Risks and implementation constraints
- Institutional and governance constraints:
  - Under-developed institutions, limited technical capacity and weak control mechanisms constrain policy effectiveness and fuel inefficiencies and corruption.
  - Weak public financial management (PFM) systems persist despite progress with reforms.
- Exogenous and structural risks:
  - Vulnerable to recurrent droughts and other natural hazards, adverse terms-of-trade developments, and regional insecurity.
  - Prospect of oil revenues over the medium term raises substantial additional institutional and governance challenges.
  - Full-scale production of oil is not expected to materialize until well beyond the NDP period.
- Political and social context:
  - President Museveni is expected to seek a fourth term in 2011.
  - Civil conflict in Northern Uganda seems to be coming to an end, but regional and ethnic tensions could flare up if inequalities persist or widen.
  - Uganda’s population is young and growing rapidly, putting pressure on service delivery.
- Staff recommendation highlights to strengthen implementation:
  - Better prioritize and time programs; include actions to integrate lagging regions with leading ones to make growth more inclusive.
  - Ensure ambitious public investment program preserves space for private sector initiative and development; review and strengthen legal and fiscal framework for public-private partnerships (PPPs).
  - Include indicators of performance in PFM and governance in the NDP monitoring and evaluation plan consistent with the Joint Performance Assessment Framework indicators used in the Joint Budget Support Framework.
  - World Bank and IMF stand ready to support authorities, with other development partners, in addressing identified challenges and risks.

### Background: recent performance and structural context
- Macroeconomic record:
  - Per capita income grew at about 4 percent per annum over the past decade.
  - Inflation has generally remained in single-digit territory despite shocks.
  - Fiscal deficits have been modest and public debt is low due to debt relief and cautious borrowing.
- Crisis resilience:
  - Impact of the global economic crisis was less severe than expected; growth remained around 6 percent.
  - Financial system proved resilient due to a sound banking system and limited exposure to crisis-affected assets.
- Structural change and employment:
  - Service sector contribution to GDP increased from 35 percent to over 50 percent over two decades.
  - Agriculture’s share declined from 56 percent to 25 percent; industrial sector doubled to 26 percent.
  - Need to spur productivity improvements across sectors to bridge rural-urban income gap.

### Poverty diagnostics (key statistics and observations)
- Data sources: household surveys between 1992/93 and 2005/06, poverty maps, World Bank analyses.
- Poverty head count declined from 56 percent in 1992/93 to 31 percent by 2005/06.
- Gini coefficient is 0.41.
- Mean consumption in Kampala is 2.5 times that of the Northern region.
- Income poverty in Northern Uganda was still above 60 percent in 2005/06.
- Human development:
  - Uganda ranked 157 out of 182 countries in the UN’s 2009 Human Development Index (HDI), moving from low to medium human development category.
  - Universal Primary Education (UPE) increased enrolment rates to over 90 percent, but primary completion rates remain 52 percent and secondary enrolment is 27 percent.
  - Child, infant and maternal mortality were 137, 76, and 435 per 100,000, respectively, by 2005/06.
  - It is highly unlikely that Uganda will meet the health-related MDG targets.
- Equity focus: more equitable distribution of income growth requires reducing disparities in access to markets and public services (education, health, water and sanitation); spatial income disparities likely to persist for some time.

### The poverty reduction strategy — Macroeconomic framework and fiscal strategy
- Growth and fiscal projections and targets:
  - NDP envisages GDP growth to gradually accelerate from around 6 percent in 2009/10 to 7.5 percent by 2014/15.
  - Public expenditures expected to rise from 17 percent of GDP in 2008/09 to just below 20 percent of GDP by end of plan period.
  - Revenues (excluding grants) projected to rise by about 0.5 percent of GDP per year, reaching 15 percent of GDP by end of the plan.
  - Public debt ratios will increase to close to 20 per cent of GDP by the end of the period.
- Investment and financing:
  - Total investment projected to increase from about 23 percent of GDP in 2009/10 to 28 percent by the end of the Plan period, driven mostly by public investment concentrated on large “flagship” projects in agriculture, oil refining and mining, education, transport, energy and water.
  - Financing will rely increasingly on non-grant revenues; tax-to-GDP ratio at 15 percent by end of period would remain well below current average for sub-Saharan Africa.
  - Continued need for development assistance; scope for a more ambitious effort to mobilize domestic revenue.
- Monetary and financial policy:
  - Monetary policy to focus on maintaining low inflation and a level of reserves sufficient to serve as a buffer from potential shocks.
  - Financial sector reforms to support an increase in intermediation to support growth.
- Staff assessments and cautions:
  - Staffs consider targeted growth rates achievable and macroeconomic framework sensible and internally consistent, but subject to downside risks (weather-related shocks, post-election uncertainties, regional/global uncertainties).
  - Staffs welcome increased infrastructure investment but caution about crowding out private sector and the need to align project execution pace to absorptive capacity and institutional support.
  - Recommendation to develop a system for project appraisal, implementation, monitoring and evaluation (“invest in its ability to invest”).
  - PPPs: advantages acknowledged, but significant fiscal risks and contingent liabilities require inclusion in budget processes; staffs encourage review and strengthening of legal and fiscal PPP framework before large-scale use.
  - NDP could better relate public investment drive to sectoral integration processes under consideration in the EAC, including promotion of EAC region as a single tourist destination and coordinated trade facilitation.
- Petroleum prospects and policy implications:
  - Exploration results indicate Uganda could have up to two billion barrels of recoverable oil, and reserves of more than 800 million barrels have been confirmed.
  - Staffs recommend mapping out potential macroeconomic effects early (likely appreciation of the exchange rate, more volatile fiscal revenues).
  - Fiscal recommendations: more transparent public expenditure management and rule-based evaluations of (new) public expenditure programs to mitigate inefficiencies associated with large oil windfalls.

### Structural and social sector reforms (sectoral diagnostics and recommendations)
- Framework and sector clustering:
  - Sectors organized into four clusters: primary growth drivers, complementary sectors, social sectors and enabling sectors.
  - NDP presents a conceptual framework for inter-sectoral linkages and synergies, but does not clearly prioritize public sector actions needed to accelerate growth and structural transformation.
- Infrastructure sector findings:
  - Key gaps identified:
    - Transport: only 4 percent of roads are paved.
    - Energy: only 11 percent of the population has access to grid electricity; consumption stands at 60 kWh per capita per year; cost is double that in Kenya and Tanzania.
    - ICT: coverage is still low and cost too high for businesses.
    - Water for production: consumption stands at 21 cubic meters per capita, compared to the world average of 599, reflecting low access to irrigation.
  - Staffs commend strategic actions and increased resources planned, but urge more prioritization in public investment budget, coordinated investments to support regional trade, and attention to interconnectivity between large market hubs and intra-urban connectivity within Kampala.
- Agriculture sector findings:
  - NDP prioritizes accelerated agricultural growth to support industrial growth, export growth, employment, and food security.
  - Plan envisages boosting production and productivity sustainably, increasing value addition, building markets, and strengthening agricultural institutions.
  - Concerns:
    - Mixed recent performance in agriculture, increasing environmental and natural-resource pressures from population growth and climate change, and lack of clarity on government’s role raise questions about likely outcomes.
    - Strategy relies on direct public interventions that risk crowding out the private sector, contrasting with overall plan thrust to remove binding constraints to private sector development.
    - Plan does not discuss role of different factors of production (in particular land and water).
    - High population growth rates will increase pressure on land and intensify land-tenure related conflicts.
  - Staffs suggest priority on promotion of efficient land market institutions, conflict resolution mechanisms, and ease of transfers of land use rights.

### Human resources, health, education, and skills
- The NDP prioritizes investing in human resources, including health, education, and skills development, given Uganda’s fast-growing, young and highly dependent population.
- The NDP advocates:
  - integrating population issues in sector development plans, policies and programs;
  - improving access to health services, in particular family planning;
  - promoting education and skills development.
- Staffs’ observations and concerns:
  - The NDP envisages more efficient use of public resources but provides disjointed interventions for ensuring good governance within social service delivery sectors.
  - A multi-sectoral approach and effective coordination structures are needed; the NDP is silent about such coordination structures.
  - There is a need to build on recent efforts to improve budgeting in education and health, raise value for money, and reduce waste and inefficiencies.
  - Given the magnitude of continued governance problems in these sectors, staffs strongly encourage the government to strengthen enforcement of existing accountability mechanisms to achieve the targeted increase in efficiency.

### Gender, inequality, and social inclusion
- The NDP has a strong focus on gender issues and commits to attaining gender balance in all sectors and programs.
- The NDP proposes strategies to:
  - redress gender gaps in access to education;
  - improve access to and control of productive assets such as credit and land;
  - correct under-representation of women in decision-making through affirmative action;
  - combat gender-based violence and retrogressive cultural practices such as female genital mutilation.
- Gaps noted:
  - Gender-sensitive strategies are less evident for the agricultural sector and access to modern sector wage employment, where the share of women was only 29 percent by 2006.
  - Women owned only 20 percent of registered land in 2009.
  - The NDP acknowledges that addressing inequality in education and formal sector employment would increase GDP growth by over a percentage point.

### Financial sector, savings, and intermediation
- The NDP identifies constraints: low penetration of financial services, underdeveloped capital markets, and high cost of credit.
- Strategic actions in the NDP:
  - stimulate savings and deepen financial intermediation;
  - develop novel financial market instruments;
  - liberalize the pension sector;
  - expand financial infrastructure;
  - enhance the microfinance industry.
- Projected savings outcome:
  - The savings rate is expected to rise from just below 13 percent of GDP to about 17½ percent by the end of the plan period.
- Staffs’ caveats:
  - For desired effects, difficult steps are required to address intermediation constraints, rural access to financial services, and access to long-term finance.
  - Sustaining reforms in the pension sector is a priority, including tackling the role and governance of the National Social Security Fund (NSSF).

### Governance, public-sector management, and public financial management (PFM)
- The NDP acknowledges weak public-sector management and pervasive corruption as cross-cutting, binding constraints to growth and identifies strategic areas of action.
- Progress and planned actions:
  - Progress in various areas of PFM to improve transparency and accountability is noted.
  - Plans include promoting results-based management through performance contracting, improved public access to information and data, civilian oversight of key legal/justice/security institutions, and strengthening Parliament’s oversight capacity.
  - Further interventions are needed to enhance value for money, strengthen the demand side of accountability, and foster compliance with accountability policies and service delivery standards.
- Challenges and recommendations:
  - PFM challenges include control of government arrears, improving cash-flow planning and budget preparation, and local government operational efficiency and funding constraints (including increasing number of districts, reduced local revenues, and increased administration costs).
  - Staffs recommend that performance measures, precise performance indicators, and milestones be more explicitly stated in the implementation plan.
  - The major challenge is enforcement of existing legislation and this needs to be addressed upfront.
  - Staffs caution against creating special incentives for favored sectors: all projects should be subject to similar budget scrutiny and selected through the regular budget process (and embedded in the MTEF) without special budgeting, ring-fencing, or fast-tracking.
  - Earmarking revenues for ‘flagship’ projects outside the regular budget must be avoided; all flagship projects should be subject to appropriate public procurement policies.

### Implementation framework, monitoring and evaluation (M&E), and statistics
- The proposed M&E framework aims to fully integrate, harmonize and coordinate NDP implementation, tracking key performance targets, outputs, and outcomes, and providing annual progress reports with identified reporting agencies.
- Institutional mechanisms:
  - The National Planning Forum chaired by the President will regularly assess NDP performance.
  - A feedback mechanism for the Ministry of Finance, Planning and Economic Development (MoFPED) to report on budget execution and performance is envisaged.
- Staffs’ observations and needs:
  - The key challenge is ensuring the government-wide M&E system is implemented and builds on existing systems.
  - A coherent results framework is needed that defines measurable indicators with baseline and targets for each sector objective with clear linkage to interventions.
  - The frequency of planned progress reports and specific annual milestones are welcomed.
  - It is unclear how different periodic reports (Performance Reports coordinated by OPM, MoFPED and NPA) will be integrated to assess agency performance and accountability.
  - The M&E framework needs resources, clear institutional mandates and support from all levels of Government.
  - Most M&E data would be generated under the National Statistical System headed by the Uganda Bureau of Statistics (UBOS); adequate funding of UBOS is required to produce the data and analysis for full evaluation of the NDP.

### Conclusions and prioritized recommendations
- Staffs endorse the NDP’s focus on structural transformation to achieve faster growth and poverty reduction, building on PEAP achievements to boost public infrastructure, foster skilled employment growth and expand higher value-added activities.
- Risks to implementation:
  - Exogenous shocks, weak governance, limited administrative capacity and delays in structural reforms could impede implementation with adverse consequences for growth and poverty reduction.
- Staffs recommend focused attention on:
  - (i) Maintain a cautious macro stance in view of the uncertain path of global and regional growth, unpredictable weather-related and other shocks, and lingering weaknesses in implementation capacity;
  - (ii) Decisively strengthen governance, accountability and transparency, through stronger commitment and enforcement, to raise public spending efficiency;
  - (iii) Build capacity to manage risks associated with oil resource development over the medium-term;
  - (iv) Clarify the appropriate role of the public and private sectors in the ‘flagship’ projects and agricultural strategy;
  - (v) Improve project selection and prioritization in the public investment budget; and
  - (vi) Address the risks associated with a fast-growing, young population.

*IMF staff assessment of Uganda’s National Development Plan as presented in the source document.*

### 1.      This Joint Staff Advisory Note reviews the National Development Plan (NDP)

### This Joint Staff Advisory Note reviews the National Development Plan (NDP) 2010/11 to 2014/15

### Overview and main findings
- The NDP was approved by cabinet on February 17, 2010 and was submitted to the International Development Association (IDA) and the International Monetary Fund (IMF) on March 9, 2010.
- The NDP is the first in a series of six plans intended to move the country towards the national vision of a transformed modern economy in the next 30 years. The five-year NDP will guide policies and resource allocation over the period 2010/11 to 2014/15.
- The NDP succeeds the third Poverty Eradication Action Plan (PEAP) which expires in June 2010.
- The NDP was developed through an extensive country-driven consultative process over 2008–2009, combining bottom-up and top-down approaches and reflecting a broad national consensus.
- Strategic shift: from “poverty reduction” to “structural transformation” with government playing a strategic role in removing barriers to growth and promoting private sector involvement in selected priority areas.
- Four priority targets identified:
  - human resources development through health, education and skills building;
  - boosting physical infrastructure, particularly in energy and transportation;
  - supporting science, technology and innovation;
  - facilitating private access to critical production inputs, particularly in agriculture.
- Sixteen national “flagship” projects are proposed to spearhead achievement of these targets.
- Overall assessment: development goals are well focused and adapted to current needs; macroeconomic framework and sector-specific plans are generally compatible with long-term vision.

### Risks and implementation constraints
- Institutional and governance constraints:
  - Under-developed institutions, limited technical capacity and weak control mechanisms constrain policy effectiveness and fuel inefficiencies and corruption.
  - Weak public financial management (PFM) systems persist despite progress with reforms.
- Exogenous and structural risks:
  - Vulnerable to recurrent droughts and other natural hazards, adverse terms-of-trade developments, and regional insecurity.
  - Prospect of oil revenues over the medium term raises substantial additional institutional and governance challenges.
  - Full-scale production of oil is not expected to materialize until well beyond the NDP period.
- Political and social context:
  - President Museveni is expected to seek a fourth term in 2011.
  - Civil conflict in Northern Uganda seems to be coming to an end, but regional and ethnic tensions could flare up if inequalities persist or widen.
  - Uganda’s population is young and growing rapidly, putting pressure on service delivery.
- Staff recommendation highlights to strengthen implementation:
  - Better prioritize and time programs; include actions to integrate lagging regions with leading ones to make growth more inclusive.
  - Ensure ambitious public investment program preserves space for private sector initiative and development; review and strengthen legal and fiscal framework for public-private partnerships (PPPs).
  - Include indicators of performance in PFM and governance in the NDP monitoring and evaluation plan consistent with the Joint Performance Assessment Framework indicators used in the Joint Budget Support Framework.
  - World Bank and IMF stand ready to support authorities, with other development partners, in addressing identified challenges and risks.

### Background: recent performance and structural context
- Macroeconomic record:
  - Per capita income grew at about 4 percent per annum over the past decade.
  - Inflation has generally remained in single-digit territory despite shocks.
  - Fiscal deficits have been modest and public debt is low due to debt relief and cautious borrowing.
- Crisis resilience:
  - Impact of the global economic crisis was less severe than expected; growth remained around 6 percent.
  - Financial system proved resilient due to a sound banking system and limited exposure to crisis-affected assets.
- Structural change and employment:
  - Service sector contribution to GDP increased from 35 percent to over 50 percent over two decades.
  - Agriculture’s share declined from 56 percent to 25 percent; industrial sector doubled to 26 percent.
  - Need to spur productivity improvements across sectors to bridge rural-urban income gap.

### Poverty diagnostics (key statistics and observations)
- Data sources: household surveys between 1992/93 and 2005/06, poverty maps, World Bank analyses.
- Poverty head count declined from 56 percent in 1992/93 to 31 percent by 2005/06.
- Gini coefficient is 0.41.
- Mean consumption in Kampala is 2.5 times that of the Northern region.
- Income poverty in Northern Uganda was still above 60 percent in 2005/06.
- Human development:
  - Uganda ranked 157 out of 182 countries in the UN’s 2009 Human Development Index (HDI), moving from low to medium human development category.
  - Universal Primary Education (UPE) increased enrolment rates to over 90 percent, but primary completion rates remain 52 percent and secondary enrolment is 27 percent.
  - Child, infant and maternal mortality were 137, 76, and 435 per 100,000, respectively, by 2005/06.
  - It is highly unlikely that Uganda will meet the health-related MDG targets.
- Equity focus: more equitable distribution of income growth requires reducing disparities in access to markets and public services (education, health, water and sanitation); spatial income disparities likely to persist for some time.

### The poverty reduction strategy — Macroeconomic framework and fiscal strategy
- Growth and fiscal projections and targets:
  - NDP envisages GDP growth to gradually accelerate from around 6 percent in 2009/10 to 7.5 percent by 2014/15.
  - Public expenditures expected to rise from 17 percent of GDP in 2008/09 to just below 20 percent of GDP by end of plan period.
  - Revenues (excluding grants) projected to rise by about 0.5 percent of GDP per year, reaching 15 percent of GDP by end of the plan.
  - Public debt ratios will increase to close to 20 per cent of GDP by the end of the period.
- Investment and financing:
  - Total investment projected to increase from about 23 percent of GDP in 2009/10 to 28 percent by the end of the Plan period, driven mostly by public investment concentrated on large “flagship” projects in agriculture, oil refining and mining, education, transport, energy and water.
  - Financing will rely increasingly on non-grant revenues; tax-to-GDP ratio at 15 percent by end of period would remain well below current average for sub-Saharan Africa.
  - Continued need for development assistance; scope for a more ambitious effort to mobilize domestic revenue.
- Monetary and financial policy:
  - Monetary policy to focus on maintaining low inflation and a level of reserves sufficient to serve as a buffer from potential shocks.
  - Financial sector reforms to support an increase in intermediation to support growth.
- Staff assessments and cautions:
  - Staffs consider targeted growth rates achievable and macroeconomic framework sensible and internally consistent, but subject to downside risks (weather-related shocks, post-election uncertainties, regional/global uncertainties).
  - Staffs welcome increased infrastructure investment but caution about crowding out private sector and the need to align project execution pace to absorptive capacity and institutional support.
  - Recommendation to develop a system for project appraisal, implementation, monitoring and evaluation (“invest in its ability to invest”).
  - PPPs: advantages acknowledged, but significant fiscal risks and contingent liabilities require inclusion in budget processes; staffs encourage review and strengthening of legal and fiscal PPP framework before large-scale use.
  - NDP could better relate public investment drive to sectoral integration processes under consideration in the EAC, including promotion of EAC region as a single tourist destination and coordinated trade facilitation.
- Petroleum prospects and policy implications:
  - Exploration results indicate Uganda could have up to two billion barrels of recoverable oil, and reserves of more than 800 million barrels have been confirmed.
  - Staffs recommend mapping out potential macroeconomic effects early (likely appreciation of the exchange rate, more volatile fiscal revenues).
  - Fiscal recommendations: more transparent public expenditure management and rule-based evaluations of (new) public expenditure programs to mitigate inefficiencies associated with large oil windfalls.

### Structural and social sector reforms (sectoral diagnostics and recommendations)
- Framework and sector clustering:
  - Sectors organized into four clusters: primary growth drivers, complementary sectors, social sectors and enabling sectors.
  - NDP presents a conceptual framework for inter-sectoral linkages and synergies, but does not clearly prioritize public sector actions needed to accelerate growth and structural transformation.
- Infrastructure sector findings:
  - Key gaps identified:
    - Transport: only 4 percent of roads are paved.
    - Energy: only 11 percent of the population has access to grid electricity; consumption stands at 60 kWh per capita per year; cost is double that in Kenya and Tanzania.
    - ICT: coverage is still low and cost too high for businesses.
    - Water for production: consumption stands at 21 cubic meters per capita, compared to the world average of 599, reflecting low access to irrigation.
  - Staffs commend strategic actions and increased resources planned, but urge more prioritization in public investment budget, coordinated investments to support regional trade, and attention to interconnectivity between large market hubs and intra-urban connectivity within Kampala.
- Agriculture sector findings:
  - NDP prioritizes accelerated agricultural growth to support industrial growth, export growth, employment, and food security.
  - Plan envisages boosting production and productivity sustainably, increasing value addition, building markets, and strengthening agricultural institutions.
  - Concerns:
    - Mixed recent performance in agriculture, increasing environmental and natural-resource pressures from population growth and climate change, and lack of clarity on government’s role raise questions about likely outcomes.
    - Strategy relies on direct public interventions that risk crowding out the private sector, contrasting with overall plan thrust to remove binding constraints to private sector development.
    - Plan does not discuss role of different factors of production (in particular land and water).
    - High population growth rates will increase pressure on land and intensify land-tenure related conflicts.
  - Staffs suggest priority on promotion of efficient land market institutions, conflict resolution mechanisms, and ease of transfers of land use rights.

*Joint Staff Advisory Note on the National Development Plan (NDP) 2010/11–2014/15*

### 28.      The NDP makes a strong case for increasing the quantity and strengthening the

### _cr10142 - 28.      The NDP makes a strong case for increasing the quantity and strengthening the 

### Human resources, health, education, and skills
- The NDP prioritizes investing in human resources, including health, education, and skills development, given Uganda’s fast-growing, young and highly dependent population.
- The NDP advocates:
  - integrating population issues in sector development plans, policies and programs;
  - improving access to health services, in particular family planning;
  - promoting education and skills development.
- Staffs’ observations and concerns:
  - The NDP envisages more efficient use of public resources but provides disjointed interventions for ensuring good governance within social service delivery sectors.
  - A multi-sectoral approach and effective coordination structures are needed; the NDP is silent about such coordination structures.
  - There is a need to build on recent efforts to improve budgeting in education and health, raise value for money, and reduce waste and inefficiencies.
  - Given the magnitude of continued governance problems in these sectors, staffs strongly encourage the government to strengthen enforcement of existing accountability mechanisms to achieve the targeted increase in efficiency.

### Gender, inequality, and social inclusion
- The NDP has a strong focus on gender issues and commits to attaining gender balance in all sectors and programs.
- The NDP proposes strategies to:
  - redress gender gaps in access to education;
  - improve access to and control of productive assets such as credit and land;
  - correct under-representation of women in decision-making through affirmative action;
  - combat gender-based violence and retrogressive cultural practices such as female genital mutilation.
- Gaps noted:
  - Gender-sensitive strategies are less evident for the agricultural sector and access to modern sector wage employment, where the share of women was only 29 percent by 2006.
  - Women owned only 20 percent of registered land in 2009.
  - The NDP acknowledges that addressing inequality in education and formal sector employment would increase GDP growth by over a percentage point.

### Financial sector, savings, and intermediation
- The NDP identifies constraints: low penetration of financial services, underdeveloped capital markets, and high cost of credit.
- Strategic actions in the NDP:
  - stimulate savings and deepen financial intermediation;
  - develop novel financial market instruments;
  - liberalize the pension sector;
  - expand financial infrastructure;
  - enhance the microfinance industry.
- Projected savings outcome:
  - The savings rate is expected to rise from just below 13 percent of GDP to about 17½ percent by the end of the plan period.
- Staffs’ caveats:
  - For desired effects, difficult steps are required to address intermediation constraints, rural access to financial services, and access to long-term finance.
  - Sustaining reforms in the pension sector is a priority, including tackling the role and governance of the National Social Security Fund (NSSF).

### Governance, public-sector management, and public financial management (PFM)
- The NDP acknowledges weak public-sector management and pervasive corruption as cross-cutting, binding constraints to growth and identifies strategic areas of action.
- Progress and planned actions:
  - Progress in various areas of PFM to improve transparency and accountability is noted.
  - Plans include promoting results-based management through performance contracting, improved public access to information and data, civilian oversight of key legal/justice/security institutions, and strengthening Parliament’s oversight capacity.
  - Further interventions are needed to enhance value for money, strengthen the demand side of accountability, and foster compliance with accountability policies and service delivery standards.
- Challenges and recommendations:
  - PFM challenges include control of government arrears, improving cash-flow planning and budget preparation, and local government operational efficiency and funding constraints (including increasing number of districts, reduced local revenues, and increased administration costs).
  - Staffs recommend that performance measures, precise performance indicators, and milestones be more explicitly stated in the implementation plan.
  - The major challenge is enforcement of existing legislation and this needs to be addressed upfront.
  - Staffs caution against creating special incentives for favored sectors: all projects should be subject to similar budget scrutiny and selected through the regular budget process (and embedded in the MTEF) without special budgeting, ring-fencing, or fast-tracking.
  - Earmarking revenues for ‘flagship’ projects outside the regular budget must be avoided; all flagship projects should be subject to appropriate public procurement policies.

### Implementation framework, monitoring and evaluation (M&E), and statistics
- The proposed M&E framework aims to fully integrate, harmonize and coordinate NDP implementation, tracking key performance targets, outputs, and outcomes, and providing annual progress reports with identified reporting agencies.
- Institutional mechanisms:
  - The National Planning Forum chaired by the President will regularly assess NDP performance.
  - A feedback mechanism for the Ministry of Finance, Planning and Economic Development (MoFPED) to report on budget execution and performance is envisaged.
- Staffs’ observations and needs:
  - The key challenge is ensuring the government-wide M&E system is implemented and builds on existing systems.
  - A coherent results framework is needed that defines measurable indicators with baseline and targets for each sector objective with clear linkage to interventions.
  - The frequency of planned progress reports and specific annual milestones are welcomed.
  - It is unclear how different periodic reports (Performance Reports coordinated by OPM, MoFPED and NPA) will be integrated to assess agency performance and accountability.
  - The M&E framework needs resources, clear institutional mandates and support from all levels of Government.
  - Most M&E data would be generated under the National Statistical System headed by the Uganda Bureau of Statistics (UBOS); adequate funding of UBOS is required to produce the data and analysis for full evaluation of the NDP.

### Conclusions and prioritized recommendations
- Staffs endorse the NDP’s focus on structural transformation to achieve faster growth and poverty reduction, building on PEAP achievements to boost public infrastructure, foster skilled employment growth and expand higher value-added activities.
- Risks to implementation:
  - Exogenous shocks, weak governance, limited administrative capacity and delays in structural reforms could impede implementation with adverse consequences for growth and poverty reduction.
- Staffs recommend focused attention on:
  - (i) Maintain a cautious macro stance in view of the uncertain path of global and regional growth, unpredictable weather-related and other shocks, and lingering weaknesses in implementation capacity;
  - (ii) Decisively strengthen governance, accountability and transparency, through stronger commitment and enforcement, to raise public spending efficiency;
  - (iii) Build capacity to manage risks associated with oil resource development over the medium-term;
  - (iv) Clarify the appropriate role of the public and private sectors in the ‘flagship’ projects and agricultural strategy;
  - (v) Improve project selection and prioritization in the public investment budget; and
  - (vi) Address the risks associated with a fast-growing, young population.

*IMF staff assessment of Uganda’s National Development Plan as presented in the source document.*

---


_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2010/_cr10142.pdf_