Corti Paul Lakuma & Musa Mayanja Lwanga
In 2010, Uganda adopted the National Development Plan (NDP) framework aimed at positioning Uganda on a path to achieve a “Transformed Ugandan Society from a Peasant to a Modern and Prosperous Country within 30 years”. However, a significant proportion of the NDP policy measures – including key objectives and priorities – did not realize the expected outcomes due to implementation challenges and absorption constraints. According to a recent study by EPRC titled “Linking budgets to plans in a constrained resource and institutional environment: The Case of Uganda”, constraints to budget execution have largely been a consequence of weaknesses of institutional support required to ensure sound and sustainable budgetary outcomes.
During the implementation of NDP 1, the budget system faced significant pressure in containing volatility in budget disbursement especially at the sectoral level. As such, some sectors spent more funds than the allotted amount, while others spent below their share. A significant part of the volatility was also as a result of delayed energy construction works for the hydro dams at Isimba, and Karuma. The volatility was also as a result of large budget cuts in social sectors (education and health) associated increased need to finance infrastructure projects, increased public sector employment and creation of new districts. As such, the realization of country’s aspirations will largely depend on the extent to which the variance between budgets and outturn are minimised. While this is a difficult task to accomplish, it is not an entirely unique task for it requires imposition of a hard budget constraint on overspending sectors and minimizing the tendency of creating new districts and institution during budget implementation.
Construction works implemented during the first NDP, also experienced gaps between planned and actual physical progress. But the level of gaps varied between projects. As earlier mentioned, the delays in key projects such as Karuma, and Isimba dams resulted into gaps between the plans and the realization of physical output progress. Another example is the construction of the Entebbe Expressway which has so far realized less that 50 percent of cumulative physical progress. The EPRC report argues that these delays were caused by lengthy feasibility studies, land and property compensation, financing gaps and lack of local capacity to implement a project of such magnitude.
In some case, constraints in implementation was due to the bureaucracy related to procurement.The procurement process during the NDP 1 was marred by many objections and appeals delayed many NDP project. In addition, the frequent changes in Public Procurement and Disposal Authority (PPDA) regulations contributed to the confusion and the increase in the number of objections and appeals, delaying the procurement process hampering NDP project implementation. Some potential bidders also tend to cancel the submission of their proposal or change project designs. In other cases, the potential bidders need to establish a consortium for the sources of finance, which causes delay.
At the operational level, the low disbursement of funds in agriculture, education, tourism and health could have emanated from little flexibility and much restraint in the budget system, which has often led to increasingly poor implementation outcomes. However, too much flexibility, without appropriate checks and balances, is also problematic and could lead to abuse of powers/ corruption. Corruption thrives, where public officials exercise substantial discretion in decision making and, are not constrained by mechanisms that check arbitrary action.
To resolve operational constraints, there is need for building institutional mechanisms that support and demand a performance orientation for all dimensions to check abuse of delegation and generate demand for information. In the longer term, the mandate of accounting officers at the sectoral level needs to be expanded to preside over more autonomy on implementation of NDP projects. Abuse of such a mandate can be checked by performance contract that reward performance and punish non- performance. Evidence from South Africa suggest that performance contracts, as way of managing flexibility accorded to accounting officers in MDAs, have improved budget effectiveness (outcome) and efficiency (output).
Whilethere is improved absorption capacity in the key sector of Roads, Agriculture, Education, Health, Energy and Tourism with over 90 percent absorption capacity during the NDP, there is a scope for improvement in other ten sectors. Furthermore, the apparent improvement in absorption capacity in the sectors may mask the decreased effectiveness in delivering on sector outcomes. For example, the court cases involving the Uganda National Roads Authority (UNRA) in early 2013 are a typical case.
In conclusion, the success of the NDP will depend on the extent to which the budget system supports and demand for information to reduce on the low disbursement of funds, improve flexibility in budget implementation by encouraging Ministries Departments and Agencies (MDA) and local government to take charge of implementing NDP project, and restraint in budget planning by restricting planning and budgeting and policy reform to Ministry of Finance Planning Economic Development (MoFPED) and National Planning Authority (NPA).