UNDP Poverty Report 2000

From Decentralization to Participation

Uganda has one of the most developed poverty programmes in Africa. Despite the lack of resources, the government has been attempting to devolve greater authority to local levels to fortify the campaign against poverty. Increasing local participation and control could contribute much to advancing the struggle.

Uganda began explicitly addressing poverty as a major development concern in response to the high social costs associated with structural adjustment, launching the Programme for the Alleviation of Poverty and the Social Cost of Adjustment in 1990.

The programme targeted social services and welfare to a narrow range of disadvantaged groups, such as orphans, slum dwellers, war widows and laid-off civil servants. When it became apparent that the programme's impact on poverty was minimal, the government set up a national task force in 1995 to develop a more systematic and broad-based approach that would address the deep-seated historical and structural roots of poverty.

The result was the Poverty Eradication Action Plan, whose duration coincides with that of the 10-year Public Investment Plan, 1997 - 2008. The government's goal is to eradicate extreme poverty by 2017 by shifting public expenditures and donor assistance into areas with a greater impact on poverty - such as rural development, physical infrastructure, direct human development and decentralized governance.

Agricultural development is crucial to poverty reduction. The sector accounts for half of GDP and 80% of employment. Food, most of which is produced in the subsistence sector, accounts for two-thirds of agricultural production.

The Need for Broad-Based Programmes

Income poverty, on a downward trend since 1992, still affects about 46% of the population. Official estimates using the human poverty index suggest that human poverty is similarly widespread. With such a large share of the population in poverty, broad-based programmes make more sense than narrowly targeted ones, particularly in rural areas, where most of the poor are concentrated. A particularly important precondition for poverty reduction in Uganda is peace and security. Unstable political conditions have impeded progress in the north and west, periodically displacing sizeable groups.

An indication of the importance of Uganda's poverty plan is that the Ministry of Finance, Planning and Economic Development manages it and reports directly to the offices of both the prime minister and the president. This setup helps provide better coordination than in most other countries, where ministries of social policy are often put in charge or separate social funds set up.

Although Uganda's poverty plan is comprehensive, its components still are not well integrated. There remains significant duplication of effort, with some areas of the country benefiting disproportionately. The government hopes to overcome this disparity by providing equalization grants to districts and targeting more public investment to poorer districts.

Beyond Donor Dependence

The government links a substantial part of its budget to poverty reduction, but much of this financing continues to come from donors, leaving programmes donor-dependent. Hoping to continue benefiting from the Enhanced Heavily Indebted Poor Countries Initiative, the government has established a Poverty Action Fund in anticipation of the release of money through debt reduction.

Overcoming the scarcity of funds for poverty reduction is a major concern. Equally important is achieving accountability and transparency in the use of the funds available. To this end, the government is involving the inspector general and the Ministry of Ethics and Integrity more closely in the monitoring of finances.

One strength of the Uganda poverty plan is its monitoring and evaluation. The National Bureau of Statistics has been conducting annual household-level monitoring surveys since 1992, providing information on national and regional poverty trends. A recent innovation has been a participatory poverty assessment conducted in nine pilot districts with the help of UNDP and the World Bank (see chapter 10).

Targeting could be improved if the poor were more directly involved in choosing and designing programmes. And civil society organizations, although consulted during the formulation of the poverty plan, could have been encouraged to be more active since then.

Progress in Decentralization

Uganda's reforms to decentralize to the district level date from the early 1990s. The new constitution adopted in 1995 devolved responsibilities and power to local government. The Local Government Act of 1997 deepened reforms by giving authority to local councils at the subcounty level to raise revenues and initiate development projects. Local councillors were elected in 1998 at various levels of government, though their responsiveness to the electorate has yet to be tested.

Fiscal decentralization has accompanied the decentralization of responsibilities. Subcounties may now retain about two-thirds of the revenue collected within their area. But overall resources remain meagre, and transfers from central government are low and increasingly tied to conditions, leaving little room for local discretion. A 1996 auditor general's report highlights the problem of diversion of funds from development purposes.

Broader reforms are necessary to achieve effective participation by villagers. Local elites still exercise much influence in determining how funds are used. Many local leaders are held back by illiteracy, lack of knowledge of government procedures and low awareness of their rights.