Uganda has achieved significant improvements in public investment management over the last few years, says the International Monetary Fund (IMF).
The new IMF Public Investment Management Assessment (PIMA) report shows that Uganda is well ahead of its comparators in many aspects of public investment management, in particular in institutional design.
A number of important 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, and development of guidelines and manuals to improve the quality of project preparation and appraisal.
Many reforms are fairly recent and are not fully institutionalized, so there is a clear need to continue and to further strengthen public investment management in Uganda. The IMF and other development partners are active partners to the government in pursuing these reforms.
Since the end of the Uganda civil war in 1986, the significant and sustained increase in infrastructure investment has been alternately driven by spurts of both private and public investment, the IMF report stated. The high level of public investment in recent years reflects large public sector projects, including major road corridors and large hydropower projects throughout the country.
“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.
Capital budget execution rates have been low, particularly for externally financed projects, which constitute a significant share of the capital budget. 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.
The IMF report stated that over the last six years, domestic resources have accounted for around 60 percent of budgeted resources, with 40 percent financed through foreign support, largely through a mixture of grants and concessional loans, but with a recent shift towards non-concessional loans, in particular heavy borrowing from the 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. Uganda scores relatively well against the IMF methodology that assesses public investment efficiency, but there is still significant room to improve. 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.”
The IMF and other development partners have been active partners to the government in pursuing these reforms. As a result of the reform process, Uganda is well ahead of its comparators in many aspects of public investment management, in particular in institutional design, but effectiveness is generally lagging significantly 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 assessment of institutional design, effectiveness, and reform priority for each institution.