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Linking Processes of Decentralization and Service Delivery with the Poverty Reduction Strategy A Potential to Maximize Synergies. Presentation at the Course for Senior Policy Staff in Donor and Governments on the Effective Involvement in the Poverty Reduction Strategies

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  1. Linking Processes of Decentralization and Service Delivery with the Poverty Reduction StrategyA Potential to Maximize Synergies Presentation at the Course for Senior Policy Staff in Donor and Governments on the Effective Involvement in the Poverty Reduction Strategies 6th – 9th June 2006 By Richard Ssewakiryanga Team LeaderUganda Participatory Poverty Assessment Process Ministry of Finance, Planning and Economic Development P.O.Box 8147, Kampala, Uganda Tel: 256-41 236205E-mail: Richard.Ssewakiryanga@finance.go.ug

  2. Decentralization Timeline • 1986: First decentralization study • 1992: Decentralization Secretariat established • 1993: Resistance Councils Statute developed • 1994/95 - 13 districts received block grants • 1995/96 - 14 districts • 1996/97 - 12 districts • 1995: Promulgation of 1995 Constitution in Uganda • 1995 Enactment of Local Government Act

  3. The Structure of Decentralization • There are 6 types of LGs comprising: • 1City • 5 City divisions • 79 District Councils by July 2006 • 900 Sub County Councils, • 13 Municipal Councils, • 92 Town Councils • Administrative units are: 150 counties, 5225 parishes and 45,000 villages • LGs are body corporate, they develop, approve and execute their budget, implement their development plans, hire, manage and fire their staff and implement a broad range of policies

  4. Linking Decentralization to the PEAP • Decentralization is hypothetically intended to improve service delivery • In response to the political concerns the first PEAP by a taskforce identified a number of priority programme areas • The Poverty Action Fund was therefore set up in 1998 in response to the HIPC financing for poverty programmes and to protect poverty spending from in-year budgetary cuts

  5. Poverty Action Fund • After the revision of the PEAP 1997 and the introduction of HIPC, the volume of funding in the PAF grew • By FY 2000/01, the PAF accounted for 30% of the total Government budget, of which 75 % was transferred to the districts and PAF has increased from 98 bn in 1998/99 to 692 bn in 2002/03 • The PAF was also supplementing Constitutional financial grants classified as Unconditional, Conditional and Equalisation Grants • The figures show the growth of the PAF and different volumes of LG grants…

  6. Sources of PAF funds 1997/8 to 2002/3

  7. Transfers to LGs • In 2005/6 the conditional grant had increased to 79% of revenues to LGs • Local generated revenue has fallen to about 1% with the abolition of Graduated tax • Donor financing now makes up about 16% of local revenue • All this shows that LGs are becoming more dependant to the central govt which is a major concern for the LGs • In the revision of the PEAP 2000 the LG did raised the following issues:…

  8. PRS & decentralisation:selected interventions • Increased discretion through the Fiscal Decentralization Strategy • Enhanced planning (HPPG) • Decentralisation support Interventions e.g LGDP II • Review Legislation • Expedite process of restructuring • Enhanced Monitoring and Evaluation systems (LOGICS & LGFIAS)

  9. Lessons Learnt • Aligning political and administrative decentralisation is not a simple issue and it affects devt results at the local level • Increasing local revenue and fiscal autonomy of LGs is key to the success of PRS at the local level • In situations of scarce national resources, the role of donors is crucial • Decentralisation and poverty eradication works best when LGs as front line institutions are well equipped and fully supported • Discretionary funding to LGs can create poverty impacts

  10. Thank you for listening!

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