According to the International Monetary Fund, Uganda has made significant improvements in its public investment management over recent years.
The IMF’s new Public Investment Management Assessment (PIMA), reveals that Uganda is far ahead of its peers in many aspects of public investments management, including institutional design.
A number of important actions have been taken. These include giving the Development Committee a strong position as a gatekeeper for investment proposals, the establishment and operation of the Projects Analysis and Public Investment Department and the development and implementation of guidelines and manuals to improve the quality and efficiency of project preparation and appraisal.
Many of the reforms are relatively recent and not fully institutionalized. Therefore, there is a clear need for continued support and strengthening public investment management in Uganda. The government is supported by the IMF and other partners in pursuing these reforms.
According to the IMF report, the significant and sustained rise in infrastructure investment since the end of the Ugandan civil war in 1986 has been driven alternately by spurts both private and public investments. Large public sector projects such as major roads corridors and large hydropower projects across the country have contributed to the high level of investment in recent years.
“Significant expansion of oil related infrastructure, and road and rail networks are planned for the medium term. Uganda’s level of public investment recently surpassed the Sub Sahara Africa (SSA) and Low-Income Developing Country (LIDC) averages but remains below regional comparators. Uganda’s capital stock is still significantly lower than LIDC, SSA averages and peer comparators,” the report said.
Externally financed projects account for a large portion of the capital budget, and have had low execution rates for capital budgets. On average, approximately twothirds of the capital budget was executed from 2015−16 to 2020−21, and externally financed projects were the main contributor to this low absorption.
According to the IMF report, domestic resources accounted for 60% of budgeted resources over the past six years. The remaining 40% was financed by foreign support. This included a mix of concessional loans and grants. However, there has been a shift towards non-concessional loans in recent years, including heavy borrowing from China Exim Bank.
“Access to infrastructure for education, health, water, and electricity are significantly below both regional peers and SSA. The perceived quality of Uganda’s infrastructure improved steadily over the period from 2007 to 2011 but has stagnated since then. The IMF methodology to assess public investment efficiency scores Uganda relatively well, but there is still much to be done. As Uganda’s capital stock grows, it will need to improve both the quality and access to its infrastructure,” it said.
“Uganda has achieved significant improvements in public investment management since 2016. A number of measures have been undertaken, including giving the Development Committee a strong role as a gatekeeper for new investment proposals, the establishment of the Projects Analysis and Public Investment Department (PAP), and development of a draft policy, guidelines and manuals to improve the quality of project preparation and appraisal.”
In pursuing these reforms, the government has had active support from the IMF and other partners. The reform process has resulted in Uganda being ahead of its peers in many aspects, including institutional design, of public investment management. However, effectiveness is generally behind design. Figure 0.1 describes Uganda’s performance against the 15 institutions in the IMF’s Public Investment Management Assessment (PIMA) compared to peer country groups. Table 0.1 summarizes the evaluation of each institution’s institutional design, effectiveness, priority reform, and priority.
Source: newbusinessethiopia
