Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698929859337.pdf (Uganda)
( b { fl E CLE KTO PA 15 Aug ?018 RECETVE D Box 7178. o MOTION FOR A RESOLUTION OF PARLIAMENT TO COMPEL GOVERNMENT TO ENSURE GREATER ADHERENCE TO THE NATIONAL DEVELOPMENT PLAN (NDP) il (Moved n csccordance with Ru/e 55 of lhe Ru/es of Procedure) WHEREAS the Notronol Developmeni Plon ll is the gurde for Ugondo's medrum ferm strotegrc drrecfion, development priontres ond otiendont implementoiion strotegies; in pursuil of the Notionol Vision Fromework 2040 under the theme "Slrengthening Ugondo's Competiliveness for Sustoinot:rle Weolth Creolron, inclusive Growth ond Employment."
AND WHEREAS Sections 13 (6) ond (7) of the Public Finonce ond Monogernent Act.2015 (PFMA) mondote the Notionol Plonnrng Auihority (NPA) to prepore o Certificote of Comphonce to the NDP, which ossesses the extent to which the onnuol budget of the previous yeor is oligned to lhe plonning ond budgeting fromeworks o[ the NDP, the Chorter of Fiscol Responsibility (CFR) ond the Budget Fromework Poper (BFP), o step towords ochieving lhe country's Vision 2040 COGNIZANT OF the rssuonce of o Certifrcote of Complionce for lhe Annuol Budget 2017/18 by NPA in complronce with Section 13 (7) of the PFMA.
D15 showing the extent to which Notionol Budget, comprising the sector.
MDA ond Iocol government budgets ore focused on implemeniolion of the Notiotol Developmenl Plons (NDPs) AWARE THAT rn 2OO7, Ihe Government of Ugondo [GoU) opproved the 30-1eor Nolionol Vision lo be implemented through' Three (3) )O-yeor plons; six (6) S-yeor NDPs; Sector Developmenl Plons (SDPs); Locol Governmeni Developmenl PIuns 1 (LGDPS); Annuol Work Plons {AWPs) ond budgeis; which together with ihe detoiled bottom-up ond top-down developmeni plonning processes, consiitute the Comprehensrve Notionol Developmenl Plcnnrng Fromework (CNDPF) thot defines the plonning process rn Ugondo.
AND FURTHER AWARE THAT in 2013, the NDP I Mid-Term Review under the Po|cy ond Strotegrc Directron theme report (Poge 35J noted the frogmeniolron of Ugondo's notionol plonning ond economic development functrons choroclerized by duplicotion of roles ond o lock of cleor desrgnolion of on rnstitution responsible for designing policy ond slrotegic ogendo for the country.

The creoiion of NPA with funclions thot ore lrmrled to development plonning.
monltoring ond evoluotion ond odvising ihe Presrdenl Ieft the responsibrlrty of developing the development policy ogendo frogmented omong NPA.

Bonk of Ugondo, Arlinrstry of Finonce ond the Presidency.

NOTING THAT the level of complionce of the Annuol Budgel to the NDp ll hos steodily dropped Irom 68.3% in FY 2015/l 5 1o 5B.B percent tn FY20l 6/)7 ond 547" in FY 201 7 /18.

Thrs drop is mornly otkibuted io the decline in performonce ot the lvlocroeconomic ond Sectorol levels.
The poor performonce oi seclor level is lorgely oltributed 1o inodequoie budget pnontrzollon of the NDPII projects during ollocotion ond releose of funds.
Two projects (2) out of the 39 core proiecls ore on course while implementotron of 60% of the prolects is yet to storl FURIHER NOTING THAT the declrne in comp|once to the NDp ll ond the non-pnoritizo |o n ond slow implementotion or non-implementotion of pnority projects rs o pornier io the misolignmeni of budgeting wrth the potentiol romificotion of rmpeding lhe reolizofion of notionol development ospirotrons.
FURTHER NOTING THAT over the lost 3 yeors, there hos been o declrne in complionce with NDP Il o1 oll levels of ossessmenl, nomely; Mocro, Notionol ond sectorol wiih Locol Governments regisiering moderole slrides.

rmplyrng thot lhrs 2 Ml,,- regressive lroleciory will curtorl lhe otloinment of the iorgels of NDp ll ond vrsron 2040.
NOW THEREFORE be it resolved by lhis Porlioment os follows; l. The Notionol Plonnrng Authonty should prepore the frscol yeor's Developmenl Budgel, covering oll osset ond copitol expenditures of Government, tncluding estrmotes of recurrent expendriures thot ore direc y reloted to the development projects, The developmenl brudget estrnoles so developed will be integroied rnto the Notionol Budget Fromework poper for oppropriotron.
2 Parlioment should omend the PFMA 2015 wilh o view to rnclude o provtsron for o complionce pre-oudit of lhe nexl yeor's Annuol Budgel to estob sh Ievels of odherence 1o the NDP with ottendont sonctions for non- od here n ce.

3.

The nolionol plcnnrng function, includrng the mondote for developrng the notronol ond economrc development strotegy should be exclusively domicilecJ ot the Notronol Plonning Authonty ond not the Ministry of Frnonce, Plonning ond Economrc Developmenl.

The Mrnrstry of ',Finonce.


Plonnrng ond Economic Development" drops the "plonnrng ond Econornrc Developmenl" componeni 1o ovoid duplcotion The NpA should reporf to Porlioment through o designoted slonding commifiee of porlioment.

4.
4.

Government consrders scropping the Srngle Treosury Accouni policy os il couses o locuno in occouniobility for forlure io ochreve results by seclors since o lorge number of enlilies do not recetve ocluol releoses of funds opproprioted by Porlromenl_ The Single Treosury Account leoves lh e releose of funds to entilles ol the discretion of ihe Secrelory to Treosury.

5.
5.

The Ministry of Finonce, Plonning ond Economic Developmenl should ensure timely integrotion of off-budget resources rnto the budgelng 3 4 process lo rmprove reportrng on resulis, inhrbit duplrcofion ond eose the monrtorrng of the outcomes of governmentol rnlerventtons 6 The nctionol plonning ond budgeting function should be hormonized wrth the IMF's supported Polrcy Supporl lnstrument (PSI) processes io minrmize the current exislrng rnherent dtsconnecl.

7.
7.

Public debt should fund only projects rdentlfied in NDPII ond domestic borrowing should be copped Further, debt monogemenl needs lo be strengthened lo oppropriotely schedule debi repoymenls by odequolely boloncrng the structure of the debt incurred.

Moved by: Mwiru Poul (MP.

Jrnjo Eosi) Secondedby:--- L Hon.

Ariko Herbert Edmund (MP, Sorott Municipolity) ) 2.

Hon.

Nsombo Potnck Oshobe (MP.


Kossondo Norlh) ADDITIONAL INFORMATION ON THE MOTION 4 o) The Notioncl Plonning Authority (NPA) issued the Certrfrcoie of Conrpltonce (CoC) to the NDP ll on lst Apnl 20)B rn consononce wtth Sectton l3 (/) of the PFMA 2015.
The CoC oims ot ensurtng thot the Notionol Budget, comprising lhe Sector, MDA ond Locol Government (LG) budgets focus on the ottornment of the torgets envisoged tn the Nolronol Development PIons (NDPs) b) This requiremeni seeks to guoronlee thot public secior plonntng, budgeting ond therr oltendoni outputs ond oulcomes ore olrgned to ochrevrng the NDP ll Vision of ''Strengthening Ugondo's Compelitrveness for Sustornoble Weolth Creotion.
inclusrve Growth ond Employment" ond its gool of propelling Ugondo to middle income stotus by 2020 os well os the prioritizo|on of the Vrsron 2040 key growth drivers nomely: Agnculture; Tourism; Minerols, Oil ond Gos; Infrostructure; ond Humon Copilol Development.
c) The NPA ossessment of complionce to the NDP ll considered tor four drfferenl levels nomely: Mocroeconomrc, Noiionol, Sector/MDA ond LG in o brd to evoluote the consistence of mocro-economic torgets with lhe NDPII medrum-ierm mocroeconomrc torgets ond outcomes, the olrgnmeni of strotegrc drrections with the NDPII strolegrc drrections, whelher sector/MDA specifrc rnterventions ore ormed of dehvering the NDPII lorgets ond results ond ultimotely whether the LG intervenlions ore focusing towords deliverrng the NDPII lorgets ond outcomes.
d) The findings of the NPA wos thot ihe complionce of the Annuol Budgetfor the FY 20,) Z/lB wos noi only unsotisfoctory but hos steodtly declined over the lost 3 FYs os indicoted below; Toble l: Trend of Certificole of Complionce Assessments -4 I 5 S/N Level of ossessment 2015/16 2O16/17 2017 /18 Sc ore Sc ore Sc ore Commenl 72 48,l 41.9 Unsotisfoctory Mocro level Assessm enl 2 3 4 Notionol Level 7 5.4 7 4.2 59.3 Unsotisfoctory Assessm e nt Sector level 5// Locol Governmenl 60.1 5t.B s3.2 Unsolrsfoctory Moderolely Sotisfoctory Totol Complionce to1 58-B 54.0 Unsotisfoctory The Annuol Budget for the FY 2017 ll9 ts 54.2 percent complront dropping ftorn 5B.B percent rn FY20l 6/17 ond further dropping from 68.3% tn FY 201 5/16.
The u,orst decline is ot the mocro level folling by 31%from72% in 2015/l 6lo 41 .9% tn 20I //l B. ll is noteworthy thot ihe overoll declrne tn compltonce scores in the FY20l7llB is mornly otiributed 1o the decline in performonce ol ihe Mocroeconomic ond Sectorol levels.

However, there wos on improvement in performonce of Lrco I Government Level.

The key emerging issues orising out of the onolysis ore os follows: o) Drsconnect between plonning ond budgeting processes ot mocroeconomic level.
The PSI ts the moin driver of budgeltnq ot mocroeconomic level.

On overoge, the budget mocro iorgets for FY2017118 differ by 17 percent from the NDPII torgets.

lnsleod, the budget torgets seem to be more closely ohgned to the IMF supporled Polcy 6 (*- Supporl lnstrumeni (PSl) torgets Thrs rmplres thot the budget is guided more by the PSI rnsteod of the Notionol Plonnrng Fromework.
There is therefore on urgenl need to hormonize lhe notionol plonning, budgeiing ond the PSI proceSses b) The low economrc growth performonce for the losi three yeors of NDPII implementotion rmplres thot the country rs unlikely to ochieve the low middle-rncome siotus by 2020.

The growlh rote wos only 4 B% ond 4 0% in FY 20,]5/15 ond 2016/17, respectively ond is prolected to grow ot 5,5% in FY2O17l18.

The NDPII torgeted growth rotes were 5.8%,5.9% ond 5.6% for the some yeors.
c) Therefore, for Ugondo to enier lower middle-income siotus in the remoining 2 yeors of NDPII implementolion, rt hos to grow by over ) 5% onnuolly.

This is very unlrkely given the resources ovorloble to the country However, the country should remoin focused on lhe mrddle-income ogendo by progmoticolly ond prudently implemenling the prioritized inlerventions in lhe Vrsron 2040 ond its ottendont plons.
d) Ugondo is likely io mrss the opportunity to enhonce fiscol exponsron beiore operoiionolizotron of the EAC convergence crrteno in 2021 .In onlicipotion of EAC convergence thot puts o limrt on the fiscol deficit to 3 perceni, to ochieve competitiveness, the NDPII plonned to fronllood mojor infrostructure rnvestmenis lhrough deficit finoncrng, peoking of 7.7 percent of GDP ln FY20l7ll B before consolidotron in the loter yeors to 4.3 percent n FY2O19/20.

However, over the post three yeors.


the overoge deficrf outlurn of 5 percent hos been less thon the overoge NDPII torget of 7-3 percent for the some period.

Therefore, the country hos to tost-irock the implementotion of key competitiveness enhoncing prolects such os lhe SGR before this window of opportunrty closes.
7 e) Although the public debt is rising ond rs consistenl wilh the NDPII torgets, the borrowing seems no1 to be for the NDPII core proiects whtch were expected lo be the morn drrvers of lhe pubhc debt.

The AB proiected debt of 40.1 percent of GDP is rn lrne wrth NDPII torgets yet the morn drrvers of thts debt (NDPII prolecls) ore not performing os well.

f) The low privote sector credit growth hos been o persislent constroint to economrc growth.
The privote credit is oboul 7.6% yet NDPII envisioned it lo be l7 4%;1his hos o huge implicotion for growth, porticulorly thol becouse fhe privole seclor rs expected to be the drrver of sustoinoble growth g) Debt rnterest poymenls ore second to Works ond Tronsport sector, crowding out budget ollocotrons to key sectors ond priorrly infrostructure prolects thot ore key rn drrvrng growth ond rmproving compelitrveness of the economy.
The domesilc rnteresl poyments in FY2017/18 were 2.3 percent of GDP, compored 1o 0 B percent for externol rnterest poyments.

Interest rote poymenls ond ihe nolure of debl finoncrng ore o couse for concern.

There rs therefore need to ensure prudent debt monogemen I toking into occoun t o conducive debt repoymenl schedule.

Furlher, for Ugondo 1o ochieve ils development osprrotrons, enhoncing domesltc resouTCe mobilizotron through innovotrve opprooches must be priorr zed.
h) The Budget concentrotes more on the expenditure srde but weok on how revenue will be innovotively mobilized from domestic sources.

The AB hos performed sotisfoctorily in line to NDPII lorgets for domesilc resource mobilizoiion.

due to moinly improved tox odmlnistrotion.

However, the BFP locks o medium-term slrotegy 1o holisticolly sirengihen domesirc resource mobilizotion ond expond the tox bose.

In poriiculor o strotegy on the moximizotton ond utrlizotron of Non-Tox Revenue (NIR) rs slill Iockrng.
There ore coses where some MDAs such os CAA, UCC, NDA, NFA, NEMA, UWA.

UETCL, ERA, UEDCL omong others collect ond sometimes spend of source NTR.

ll is not cleor whether Government is geiling moxrmum volue oul of 8 Jhe collection ond use of ihese NTRs.

To moximize domestic revenue mobilizolion, oll NTRs should be collected solely by URA.

At lhe Notionol Strotegic Level Ri.

Hon.


Speoker, the key emergrng issues orising out of the onolysis ore os follows o) There rs o disconnect between the intent of the budget ond the octuol budget ollocotions.

The FY20l7 /18 AB wos intended to deltver on industrrohzotion for job creotion.

However, the meons of ochreving rndustriolizotion ln lerms of intervenlions ond TesouTCe ollocolions ore inodequote.
Key l'.lDPll priorities for induslnolizolton such os'scoling up volue odditron ond collectrve morketrng; estoblishrng on integroted steel ond tron lndustry; re estoblishment of cooperolives to support volue-odditton; llght monufocturrng ond zonol ogro-processing industries; forest ond wetlonds restoroiton; improvrng occess to finoncrol servtces; omong others, hove noi been ollocoted sufficient funds tn the budget.
ln oddition, of the nrne rndustriol porks only two (Luziro ond Bweyogerere) ore operolionol; three (Nomonve, Soroti, ond Mbororo) ore porliolly operottonol ond the remorning four ore yel to loke off due to rnodequote fundtng.

b) There ore spectfic inierveniions thot requtre immediote oltentton in order to ensure ochievement of the NDPII objectrves.
These include: improving occess to wofer for ogriculturol production; promotion of volue oddition to the vorious pnoritized commodities, rurol feeder roods moin'tenance; Irnking of the remorning locol governments through the NBI io improve intetne-f connectivity, implementing the Eorly Chtldhood Development porcy; rmplementoiron of the five-regtonol skills developmenl centres; teocher recruitment; ond enhoncing government effectiveness ond efficrency- c) The Affirmotive Actions or Equolizolion progrommes in the NBFP ond AB ore not desrgned to moximize the ochievement of NDPII key resulls The NDPII torgeted these progrommes io reduce income dtsporilies ocross the 9 t_.
counlry through mornly the Locol Economtc Development model/opprooch.

However, the progromming os per the NBFP ond the AB connot yield meonrng results.

The proposed ociions ond inlerventions in ihe budget such os Luweero Rwenzori Developmenl Progrom (LRDP), Koromolo lntegroted Development Progromme {KIDP); NUSAF ll ond lll omong others, do not hove o cleor focus on Locol Economic Development ond do not provide for hornessing of synergies ocross the drfferenl volue chorns of inveslmenls.
There rs therefore need to redesign these progrommes bosed on the LED opprooch to dellver the expecied outcomes.

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