Tables

Table 1. Uganda: Policy Matrix, 1998/99-2000/01¹

Policy Area	Objectives and Targets	Strategies and Measures	Implementation	TA Requirements
A. Fiscal policies
1. Revenue	Improve tax administration, enhance tax base, and reduce distortions in tax system	Restructure excise taxes and restructure and reduce tariffs	1998/99-2000/01
		Implement changes in customs management and administration and improve internal audit procedures	1998/99	IMF, U.K. Department for International Development (DfID)
		Approval by URA of the new anti-smuggling action plan	September 1998
		Customs Departments implement Wide-Area Network to monitor customs traffic	1998/99
		Install seals on all petrol station pumps (including those in nonretail outlets). All unsealed stations along the main transit routes will be closed	September 1998
		Complete on-site audits of all retail and nonretail petrol outlets by the URA	June 1999
		Establish a Large-Taxpayer Unit (LTU) and assign to it the assessment, auditing, collection, and enforcement functions for the 100 largest taxpayers	September 1998	IMF
		Complete a centralized inventory of all available information on tax arrears by the business sector	September 1998
		Ensure auditing of enterprises whose tax holidays will have expired by the income tax department, in consultation with the (value-added tax) VAT and customs departments	June 1999
		Establishment of duty drawback desk and clearance of drawback backlog	1998/99
		Establishment of tax tribunal and commencement of its operations	September 1998
		Process VAT refunds within 30 days	1998/99
		Introduce nonwaivable (except for good cause) penalty tax on late VAT payments, set at 2 percent per month on the amounts outstanding	July 1998
		Replace the fixed penalty for late filing with a nonwaivable penalty tax of 2 percent of the tax liability—a general write-off facility on overdue taxes applies to this penalty	July 1998
2. Expenditure and budget control	Improve budget management	Improve expenditure control and financial accounting mechanisms, including,	1998/99-2000/01	IMF/World Bank
		put in place a Pilot Commitment Monitoring and Reporting System, and	April 1999	IMF
		put in place uniform budget preparation and reporting regulations for districts	1998/99-2000/01	IMF
		Cease issuing promissory notes except to regularize domestic arrears accumulated prior to July 1, 1997	Effective from July 1, 1997 onward
		Limit supplementary expenditures to no more than 3 percent of budgeted expenditures	1998/99-2000/01
		Ensure that all cash releases are recorded appropriately and provided in a timely manner	1998/99
		Increase allocation for priority program areas and for development budget at least at the rate of growth of nominal GDP	1998/99-2000/01
		Arrears Monitoring and Reporting Unit and its Verification subcommittee audit existing central government arrears and prepare plan for their elimination	February 1999
		Clear all outstanding arrears	1998/99-2000/01
B. Monetary and financial sector policies
1. Monetary policy	Maintain low and stable inflation	Strengthen the use of indirect instruments by promoting secondary markets in treasury bills	1998/99	IMF/World Bank
2. Institutional reforms	Promote efficiency and soundness of banking system	Strengthen financial sector supervision and training	1998/99-2000/01	World Bank
		Conduct 12 on-site examinations of commercial banks	1998/99
		Communicate required corrective measures to the four banks found to be in violation of bank regulations	September 1998
		Conclude reinspections of these banks	December 1998
		Begin policy of annual on-site inspections of all commercial banks	2000/01
		Issue a master repurchase agreement to serve as a guide to all sales of government securities	1998/99
	Promote rural finance	Provide subsidies, if needed, to keep selected rural branches of the Uganda Commercial Bank (UCB) operating	1998/99-2000/01
C. External sector policies
1. Exchange and trade liberalization		Submit new Foreign Exchange Bill to Parliament	March 1999
	Promote trade and reduce anti-export bias and other tax-induced distortions	Clear the stock of outstanding export duty drawback claims	1998/99
		Reduce the maximum processing time of export duty drawback claims to two months	June 1999
		Reduce the maximum processing time of export duty drawback claims to one month	June 2000
		Eliminate import ban on cigarettes	March 1999
		Phase out temporary additional tariffs on beer, soft drinks, automobile batteries	1998/99-March 2001
		Imported cigarettes, and other tobacco products	1999/00- June 2001
		Phase out discriminatory excise tax of 10 percent on selected imports	1999/00-2000/01
2. Debt strategy	Improve debt profile	Contract new concessional borrowing only on IDA terms, or better	1998/99-2000/01
		Limit amount of annual nonconcessional debt contracted or guaranteed by the government to US$10 million	1998/99-2000/01
		Normalize relations with non-Paris Club creditors	1998/99-2000/01
D. Structural and institutional reforms
1. Private sector development	Enhance private sector's capacity to generate economic growth	Advance commercial related legislation and related judicial processes by:
		Drafting new commercial laws and obtaining cabinet approval	1998/99	World Bank
		Establishing a Tax Division of High Court to expedite tax-related disputes	1998/99
		Improve legal infrastructure by:
		Reducing backlog of cases	1998/99-2000/01
		Establishing a separate registry of commercial cases	1998/99
	Promote private equity and security markets	Begin offering residual shares in partially privatized enterprises to public via the Capital Markets Authority	1998/99-2000/01
2. Public service reform	Improve effectiveness and efficiency of the public service	Implement the major part of the remaining staff cuts arising from ministerial restructuring	1998/99
		Implement results-oriented management in government ministries	1998/99	World Bank
		Strengthen personnel and payroll management and control	1998/99-1999/00	DfID
		Complete job evaluation and grading exercise	1998/99	World Bank
		Complete National Service Delivery Survey	1998/99	World Bank
	Rationalize public service pensions and separation benefits	Approve a cabinet paper embodying the basic principles of the proposed pension reform, including a specification of the new pension formula as well as the intended adjustment to benefits for persons who retired prior to the monetization of in-kind benefits	December 1998
		Complete study on long-term financial requirements of revised benefit schemes	1998/99	World Bank
		Establish working group on pension reform	1998/99
3. Decentralization	Improve service delivery and accountability	Complete Decentralization Implementation Plan	December 1998
		Enhance financial oversight and management capacities at central and local levels	1998/99-2000/01
4. Privatization and public enterprise reform	Reduce the role of the government in commercial activities and increase exposure of retained public enterprises to market signals	Relinquish government management control to core investor or divest at least 51 percent of government shares in all 126 enterprises with at least partial public ownership	December 1999
		Approve for sale 16 of the 18 commercial public enterprises that remain to be approved for sale	1998/99
		Regularize all Uganda Electricity Board (UEB) debt service to the central government	December 2000
	Enhance efficiency and reduce costs of public enterprises	Properly reflect all direct subsidies from budget to public enterprises in the budget and eliminate all subsidies over the next three years, except for those to enterprises with agreed social missions	1998/99	World Bank
		Make loans from government to public enterprises at market interest rates	1998/99-2000/01
		Liquidate all arrears of public enterprises	1998/99-2000/01
		Complete study on rationalization and restructuring of public enterprises	March 1999	World Bank
		Strengthen MFPED's mandate for financial oversight of public enterprises	December 1998	World Bank
		Decide whether to adopt multisectoral regulatory agency for utilities regulatory structure for public enterprises	1998/99	World Bank
	Improve institutional framework for privatization	Monitor use of divestiture proceeds and their use for agreed activities	1998/99-2000/01
		Present to cabinet amendments to PERD statute	June 1999	World Bank
E. Sectoral Policies
1. Agriculture	Improve agricultural productivity	Develop, through participatory approach, consistent sector-wide approach, including redefinition of role and activities of Ministry, decentralization of activities and prioritization of investments.	December 1999
		Provide adequate budgetary provisions for agricultural research and rural roads	1998/99-2000/01
		Review all marketing regulations on agricultural outputs and inputs, remove any remaining restrictions, and simplifying export procedures for all agricultural exports	1998/99-2000/01
2. Environment	Build capacity for sustainable management of natural resources	Implement the National Environment Bill and proceed with follow-up on National Environmental Action Plan (NEAP)	1998/99-2000/01	World Bank
		Strengthen capacity of environmental and resource management agencies	1998/99-2000/01	World Bank
3. Infrastructure
Power	Improved supply of power on a least-cost basis	Cabinet will approve plan for power sector restructuring and private sector investment	March 1999	World Bank
		Establish a transparent process for evaluating the technical, financial, and environmental aspects of the independent power producer proposals, and for selecting the most economic order and timing of the proposed investments	December 1998
	Improve UEB's operational and financial performance	Reduce accounts receivable to: Four months of sales	December 1999	World Bank
		Three months of sales	2001 onward	World Bank
		Reduce energy losses from 30 percent to:
		26 percent	December 1998
		22 percent	December 2000
		Reduce UEB's operating ratio to: 36 percent	2000
		Reduce staff to 2,000	December 1998
		Complete the divestiture of noncore activities	March 1999
4. Transport	Improve maintenance and rehabilitation of main roads	Increase government funding for routine maintenance to 100 percent of requirements	2001	World Bank
	Strengthen institutional capacity in roads sector	Make Road Agency Formation Unit operational	September 1998	World Bank
		Establish autonomous Road Agency/Authority	July 2000	World Bank
	Improve the accessibility of rural areas	Increase feeder road investment and strengthen planning at district level	1998/99-2000/01	World Bank
		Complete prioritized rural feeder road and investment plan	1998/99	World Bank
	Increase commercial orientation of Uganda Railways Corporation (URC)	Take decision on continued operation of the Kampala- Kasese line	1998/99	World Bank
		Take decision on increased private sector participation in Uganda Railway Corporation	December 1998
5. Post and Telecommunications	Increase private sector participation in service delivery through liberalization	Re-tender Uganda Telecommunications Ltd. (UTL)	December 1998
6. Water	Improve provision of safe water and sanitation to urban and rural populations	Complete review of water sector policy	December 1999
		Take decision on increasing private participation in NWSC	1998/99-2000/01
		Allow National Water Supply and Sewerage Corporation (NWSC) to make tariff changes as needed to cover marginal costs	1998/99-2000/01
		Increase government funding in sector	1998/99-2000/01
F. Social and statistical issues
1. Education	Universal Primary Education (UPE)	Implement the UPE dissemination strategy	1998/99
		Increase resource efficiency by adopting policy guidelines on double-shift teaching, multigrade teaching, and rationalization of teacher training program	1999/2000
		Expand in-service teacher training to cover all districts	1998/99
	Improve resource management	Ensure that all active teachers are on the payroll and paid on time	1998/99
		Implement monitoring system for accountability and transparency in use of public funds	1998/99-2000/01
		Implement the Education Management Information System	1999/2000
		Adopt education sector strategy	June 1999
2. Health	Improve health indicators	Update health policy and prepare five-year strategic plan	1998/99
		Carry out regular and systematic monitoring of:	1998/99-2000/01
		key health indicators;
		incidence and prevalence for major diseases/ conditions, such as HIV/AIDS, malaria and nutrition;
		service indicators, such as overall access to services and specific services, such as contraceptive use
	Improve nutritional situation	Implement program of locally based interventions supported by Nutrition and Early Childhood Development Project	1998/99-2000/01	World Bank
3. Statistics	Improve statistical base	Improve collection and reporting of national accounts, revenue, expenditure, BOP, and debt statistics, including through increased efforts to implement the recommendations of previous technical assistance missions	1998/99-2000/01	Fund
		Provide adequate funding for statistical development	1998/99-2000/01
1/ July 1998 to June 2001

 

Table 2. Uganda: Selected Economic and Financial Indicators, 1994/95-2000/011
	1994/95	1995/96	1996/97	1997/98		1998/99	1999/00	2000/01
				Prog.	Prov.
	(Annual percentage changes, unless otherwise indicated)
National income and prices
GDP at constant prices	10.5	8.1	5.2	5.0	5.5	7.0	7.0	7.0
GDP deflator	9.2	6.2	6.5	8.8	4.4	5.0	5.0	5.0
GDP at factor cost
(in billions of Uganda shillings)	4,915	5,640	6,323	7,207	6,964	7,824	8,790	9,875
Consumer prices
End of period	3.4	5.4	10.4	7.5	-1.4	5.0	5.0	5.0
Nonfood	6.2	7.2	1.7	...	3.5	5.0	5.0	5.0
Annual average	6.1	7.5	7.8	8.8	5.8	5.0	5.0	5.0
External sector (in U.S. dollars)
Exports, f.o.b.	134.5	-0.8	13.6	-22.5	-30.6	16.5	16.4	13.2
Imports, c.i.f.	61.6	12.2	2.3	7.1	11.8	8.1	8.0	9.2
Terms of trade (deterioration -)	72.2	-29.3	-11.4	4.0	15.0	-1.8	0.6	1.2
Average exchange rate
(Uganda shillings per U.S. dollar)	933	1,013	1,058	...	1,150	...	...	...
Nominal effective exchange rate
(end of period; depreciation -)	-6.8	-0.1	1.6	...	-7.1	...	...	...
Real effective exchange rate
(end of period; depreciation -)	-7.9	0.6	7.2	...	-11.5	...	...	...
Government budget
Total revenue and grants	37.3	15.2	16.9	11.0	16.5	17.0	11.1	11.1
Revenue	44.7	19.1	16.6	10.9	8.8	19.1	16.1	16.8
Expenditure and net lending	34.3	10.3	15.7	8.0	8.3	18.7	12.9	12.9
	(Annual changes in percent of beginning-of-period broad money, unless otherwise indicated)
Money and credit
Net foreign assets	33.9	22.9	33.0	12.2	38.7	15.0	11.1	13.8
Net domestic assets 2/	-3.4	-0.6	-12.5	4.3	-10.9	3.4	4.8	2.1
Domestic credit	-12.3	21.2	2.7	4.4	-1.0	3.4	4.8	2.1
Central government	-23.7	6.0	0.0	-5.6	-9.6	-8.6	-6.9	-8.9
Credit to the private sector	11.4	15.2	2.6	10.0	8.6	12.0	11.8	11.0
Money and quasi money	25.3	20.7	15.8	15.0	21.7	17.0	15.0	15.0
Velocity (GDP/M2) 3/	10.8	10.1	9.6	9.5	8.9	8.4	8.1	8.0
Interest rate (in percent) 4/	8.0	10.8	11.9	...	12.3	...	...	...
	(In percent of GDP at factor cost)
National income accounts
Gross domestic investment	18.4	16.7	17.1	20.5	16.9	17.1	17.1	17.1
Gross national savings (including grants)	15.7	14.7	16.2	17.9	14.9	13.4	14.4	14.7
External sector
Current account balance
(including official grants)	-2.7	-2.0	-0.9	-2.6	-2.0	-3.7	-2.7	-2.4
(excluding official grants)	-8.4	-6.9	-6.0	-7.7	-8.3	-9.2	-7.6	-6.7
External debt (including Fund)	62.4	61.1	56.4	56.7	54.2	52.2	49.0	45.9
Government budget
Revenue	10.7	11.1	11.6	11.4	11.4	12.1	12.5	13.0
Grants	4.8	4.4	4.6	4.5	5.7	5.7	5.1	4.4
Total expenditure and net lending	18.3	17.6	18.1	17.2	17.8	18.8	18.9	19.0
Government balance (excluding grants)	-7.6	-6.5	-6.6	-5.8	-6.4	-6.7	-6.4	-6.0
Government balance (including grants)	-2.8	-2.0	-1.9	-1.3	-0.7	-1.0	-1.3	-1.6
Net foreign financing	4.8	3.5	3.3	2.9	2.8	3.3	2.4	2.6
Domestic bank financing	-1.9	-0.5	-1.1	-0.5	-1.0	-0.9	-0.8	-1.0
Domestic nonbank financing	-0.0	-0.9	-0.2	-1.0	-1.1	-1.4	-0.3	0.0
	(In percent of exports of goods and nonfactor services)
Debt-service ratio 5/
Including Fund obligations	23.5	21.8	17.9	26.9	26.7	15.6	16.2	12.7
Excluding Fund obligations	18.8	15.6	10.6	17.7	16.9	7.4	10.2	7.9
	(In millions of U.S. dollars, unless otherwise indicated)
Overall balance of payments	125.2	59.6	111.2	44.5	109.7	47.1	43.2	78.6
External payments arrears (end of period)	234.6	255.0	314.2	0.0	273.5	0.0	-0.0	-0.0
Foreign exchange reserves	388.2	479.7	621.9	693.4	750.5	832.7	900.7	974.8
Gross foreign exchange reserves (in months
of imports of goods and nonfactor services)	3.4	3.6	4.5	4.7	4.9	5.0	5.0	5.0
Sources: Ugandan authorities; and Fund staff estimates and projections.
1/ Fiscal year begins in July.
2/ Change in net domestic assets for 1998/99 through 2000/01 is calculated using constant exchange rate of        U Sh 1,232 per U.S. dollar.
3/ Nominal GDP divided by average of current year and previous year end-period money stocks.
4/ End-period rate on 7-12 month time deposits.
5/ The debt-service ratio incorporates estimates of the effects of the April 1998 Paris Club stock-of-debt        operation and assumes rescheduling with non-Paris Club bilateral and commercial creditors on        comparable terms.

Table 3. Uganda: External Financing Requirements, 1998/99-2000/01
(In millions of U.S. dollars)
	1998/99	1999/00	2000/01	1998/99-2000/01 Total
		Proj.
Total financing requirements	-1,032.1	-705.5	-697.0	-2,434.6
Current account 1/	-583.8	-543.1	-527.6	-1,654.4
Amortization (public sector)	-72.9	-84.1	-83.0	-240.0
Other capital (net)	39.8	40.6	41.4	121.8
Change in gross official reserves
of the BOU (increase = -)	-84.3	-69.3	-81.0	-234.7
Change in arrears (decrease = -)	-273.5	-0.0	0.0	-273.6
IMF repayments	-57.3	-49.6	-46.8	-153.8
Sources of financing	1,032.1	705.5	697.0	2,434.6
Official grants	349.9	352.9	341.8	1,044.7
Import support	147.0	129.5	98.2	374.7
Project support	203.0	223.4	243.6	670.0
Official loans	316.3	278.4	313.6	908.3
Import support	113.3	55.0	70.0	238.3
Of which: IDA	85.0	55.0	0.0	140.0
Project support	203.0	223.4	243.6	670.0
Of which: IDA	...	...	...	0.0
IMF disbursements	44.8	35.9	0.0	80.7
Exceptional financing	321.0	38.3	41.6	401.0
Current maturities	23.5	-0.0	-0.0	23.5
Arrears	260.3	0.0	0.0	260.4
HIPC	37.2	38.3	41.6	117.1
Financing gap	0.0	0.0	0.0	0.0
Sources: Ugandan authorities; and Fund staff projections.
1/ Excludes official grants.