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Uganda PRSC

Uganda PRSC. Ritva Reinikka, DECRG May 24, 2001. Why Programmatic?. Macroeconomic policies less of a constrain Structural adjustment agenda “achieved” Fungibility of public expenditure Poverty Eradication Action Plan (PRSP) Comprehensive, poverty-oriented strategy

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Uganda PRSC

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  1. Uganda PRSC Ritva Reinikka, DECRG May 24, 2001

  2. Why Programmatic? • Macroeconomic policies less of a constrain • Structural adjustment agenda “achieved” • Fungibility of public expenditure • Poverty Eradication Action Plan (PRSP) • Comprehensive, poverty-oriented strategy • Prioritization of public policy and spending • MTEF • Ex ante framework to translate poverty priorities into budgets

  3. Why Programmatic? • Projects tend to undermine budget policy and process in an aid-dependent country • Cash flow budget management • Ex post mechanism to ensure that with-in year implementation in line with budgets • While macroeconomic distortions largely removed, public sector performance and poor service delivery key constraints to growth and poverty reduction

  4. Why Programmatic? • Public sector reform projects have not delivered • Often too ambitious technical solutions • Limited coverage (e.g. nothing on procurement) • Corruption no less common in Bank projects (procurement audit in 3 sectors)

  5. Innovations in Bank Processes • Bank and Government Teams • Stove-pipe approach undermines Government’s efforts to coordinate and reform its institutions • A single integrated Bank team to prepare PRSC • Cross-cutting and sector-specific staff interacting • Recruitment and payroll main problems in education • Procurement of drugs in health • Government responded with a multi-sector team • Emphasis on results and medium-term agenda • Country director decisive once reached decision

  6. The Country Context • Champions for change • President “Inflation is indiscipline” • Economic team • Consultation commonplace • Poverty Eradication Action Plan • Stability of the government team • Capacity building by empowerment • EdSAC

  7. Government’s Credibility • Delivered results • Peace • Rescinded export taxation • Stable currency due to prudent fiscal policy • Progress in budgetary process (e.g. MTEF) • Roads and education spending priorities • Does not shy away from bad news (expenditure tracking survey results)

  8. Challenges • Increase private and public investment • Behavioral change — takes time • Decentralization • 30% of expenditure (all basic services) • Increase transparency • Information for empowerment • Increase participation

  9. PRSC Content and Design • 4 pillars of PEAP/PRSP • Growth and economic transformation • Governance and security • Increasing incomes of the poor • Improve quality of life of the poor • Implementation of PEAP/PRSP • Selectivity • In a sequenced fashion • other IDA instruments; other donors

  10. PRSC Components • 1. Efficient and equitable use of public resources • Comprehensive budget and results-orientation • 2.Cross-cutting public sector reforms • Public service and pay • Financial management and procurement • Transparency, participation and anti-corruption • Monitoring and evaluation • 3.Education, health, water/sanitation

  11. Other Credit Features • A series of annual credits • in line with government budget cycle • From conditionality to partnership • ex post “conditionality” • Finances all public spending • but reform program more focused • For EA and safeguards a SECAL • category B

  12. Other Credit Features • Underlying government processes and systems become central to lending • avoids creating parallel donor systems • creates fiduciary concerns (CFAA, CPAR) • Primary goal is building experience within government to manage reform • decision-making shifts from donor to recipient

  13. Is Uganda Unique? • Analytic base • If it can be built in Uganda, it can be done anywhere • PERs, household, firm, service facility surveys, PPA • Bank staff has duty to help build capacity for evidence-based decision-making • Supply for information creates demand

  14. PRSC Team • Team work essential • Instead of a stream of Bank missions now coordinated • Sector programs in education and health a major strength • Several donors on board over time • Used to results -- ready to take the risk

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