A week after World Bank suspended further release of financial aid towards government projects citing low absorption and poor implementation, Prime Minister Ruhakana Rugunda has noted that government is ‘handling this problem’’ through specific reforms.
On Thursday afternoon while meeting foreign donors, Rugunda said government is looking to undertake major reforms including; strengthening the office of the chief government valuer, improving project readiness, speeding up processes of approval and land acquisition.
“Cabinet has looked up the matter of absorption of funds from World Bank, African Development Bank and Islamic Development Bank following the drastic decision by World Bank to stop funding,” the Prime Minister said.
The suspended USD 1.5 billion was meant to fund projects in the sectors of water, agriculture and public works. According to World Bank Country Manager for Uganda, of the Ugsh 8 trillion threshold, only 10% was being absorbed.
Rugunda added; “It is critical that we enhance performance assessment mechanisms through strengthened systems of public finance management as well as improving oversight.”
The head of the local development partners Ms. Jennie Barugh remarked; “We need to ensure more transparency and accountability and we look to you (government) to lead out joint efforts to achieve results. Out of 60 projects implemented, 81% of these were unsatisfactory and went beyond schedule.”
Earlier on Thursday morning, Finance Minister Matia Kasaija sounded a strong caution to public servants in sectors that have a low absorption saying they will no longer be allocated funds. He also said that government Ministries, Department and Agencies that do not possess strategic plans will also not receive funds from Ministry of Finance.
According to the overall government performance, implementation of projects improved slightly to 60% in 2015 from 58% in 2014.
However, an average of 72% of all externally funded projects had an unsatisfactory performance between 2011 and 2015. This was coupled with among other barriers low absorption and slow implementation. External funding from World Bank, Africa Development Bank, Islamic Development Bank and others to Uganda over the 5 year term amounted to USD 7.3 billion.