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Uganda: A slipping lion that must wake up

By Mubatsi Asinja Habati

Kadiresan Kundhavi has for the last three years been the World Bank’s Country Director in Uganda – her first African posting after working in Asia, Latin America and Eastern Europe. Kundhavi has been transferred to manage the bank’s operations in Zimbabwe, Malawi and Zambia. The Independent’s Mubatsi Asinja Habati spoke to her.

US$1 billion in Uganda over the last three years of your tenure as WB country manager. What do you feel have been your greatest achievements in this regard?

Over the last three years, the bank has financed projects close to $1billion in Uganda in various important sectors including agriculture, energy, education, transport and private sector development. We have been involved in the construction of hundreds of kilometers of roads and carried out study designs for future government development processes. We have been supporting the Ministry of Works to build and strengthen UNRA, we have jointly supported the development of Bujagali Hydro Power Project which will increase electricity supply when completed sometime next year. We have been proudly supporting the rural electrification project to help connect rural people to energy. We have been helping the people of northern Uganda to resettle and develop by providing services in education, health, water through the Northern Uganda Rehabilitation Programme. We have also helped return 4000 ex-combatants reintegrate with the civilian population in Northern Uganda. Another large project is the Private Sector Development project which supports improving the lands registry to ease the registration of land from 225 days to 75 days. Also in the area of registering business, the number of days has reduced from 135 days to 25 days. We have done public reviews on education, health, works, and in financial accountability report which looks at overall financial management and performance. We have jointly with the academia, IGG, and Civil Society launched a data tracking mechanism on corruption. It is a method of tracking corruption with key measurements in reducing corruption.

How will this tracking mechanism help reduce corruption?

If the Auditor General’s office comes with audit reports every year, these reports raise a number of issues like inefficiency and value for money. We have to find out are these issues are being addressed; if the reports are being taken seriously and implicated individuals face the consequences.

Going forward, what is likely to influence the trend of World Bank’s funding commitment to Uganda in terms of both budget and project support?

The latest World Bank country assistance strategy stresses governance as the main theme for all planned funding to government. It looks at governance and anti-corruption measures more carefully and puts an end to leakage of public resources. It all entails dialogue with the government in strengthening institutions, putting the necessary resources, skills, and employing capable people. It is a long term agenda which needs time and resources to achieve. For budget support assistance programmes, we look at indicators like accountability, transparency, and effective use of resources to award assistance. We also do country policy and institutional assessment annually and based on the ratings, the resources will be extended. If the ratings are lower the resources from the bank to a country will be lower and vice versa.

Plans are underway by the Government of Uganda to start producing oil. It is expected that oil revenues will be invested in future growth. What is the World Bank’s thinking on Uganda’s oil management strategy?

Oil brings both opportunities and challenges. It can bring about dramatic increase in the foreign direct investments and domestic revenue and, more than anything else, there is a possibility of reducing energy costs. But also there are huge challenges. We know from the experience of other countries that it brings inflationary pressures, exchange rate appreciation, and a whole lot of governance challenges; the so called oil curse. Natural resources, especially oil, reduce government transparency and increase corruption as government becomes less dependent on the usual tax base and less accountable. With Uganda’s good oil policy and the soon to be tabled petroleum Bill, we are hoping Uganda’s case will be transparent. One way could be to put out the oil revenues collected recently in a consolidated statement and put it out to the population, no matter how little it would be, as a signal of transparency.

Apart from oil, what does the Government of Uganda have to do in order to accelerate and sustain faster growth?

If Uganda wishes to become a middle income country within the next 5 years, it is too ambitious but within the next 15 years it is possible.  Countries like Thailand and Malaysia were more or less the same as Uganda 40 years ago and offer lessons on how they moved to become middle income countries. As incomes increased there, their population fertility rate began to fall. They have less dependence ration meaning that a large proportion of the population is employed thus contributing to the economy. If Uganda can really address that it would be fantastic. By 2050 Uganda’s population will be over 120 million. Unless it is skilled, educated and tooled to compete regionally and globally, then having a large population will not help. If this is not addressed we are likely to see more income inequality cases increasing.  This is another area that government needs to be looking at; how do you economic development more inclusive where everyone gets a share.

Given the financial limitations, should Uganda be concentrating on infrastructure development or service delivery?

This is not an either or question. Infrastructure development facilitates service delivery and without efficient service delivery you cannot have meaningful infrastructure. You can have a good road network, but you also need a healthy and skilled population to utilize and manage this road. So you need the hardware and software.

Some people believe heavy investment in agriculture is the best way to spur economic growth, but World Bank and donor money in this area is at best limited. What is your view about funding to agriculture?

Funding is one part of the story. To bring about transformation in agriculture you need research and information advisory services to farmers, better organised farmers and better markets. The other aspect is how to bring about better storage and quality so that the food produced is indeed of the desired quality. These are things that Uganda needs to implement. But the mind set of farmers is the most important in this area. Changing the farmers’ mind set from subsistence to commercial farming is important.

So does the World Bank have any support to Uganda’s agricultural sector development?

This is an important sector for us. The President himself has asked for the bank’s support in this. We have the US$130 million agricultural technology and advis

ory services project focusing on integrated research and advisory services. We also have the Agriculture Development Strategy and Investment Pplan (ADSIP) project which lays the overall agricultural strategy and development plan which has taken us two years to develop with the Ugandan government.

Development partners have shouted themselves hoarse about governance and corruption. What is your assessment of the Government’s progress in this regard?

My assessment of the government’s fight on corruption is mixed. On one hand we see what government has done in terms of improving performance of its management through various anticorruption institutions and laws. The ministry of finance has been trying to link budget to outcomes which is a good model for Africa economies. The data tracking mechanism to address corruption is a welcome idea. I am also pleased with the anticorruption bodies in the country.  However, Uganda is so great in passing legislation and I would give it 99% but when it comes to implementation of the fight on corruption I would give it 49%. So there is a huge implementation gap in the fight on corruption.

How can government achieve the remaining 51% implementation of these laws?

It must make sure that the law on corruption applies similarly on everybody. Let people see that the law enforcement agencies are apprehending everyone implicated to send a strong signal to the public that corruption is not tolerated.  The cost of losses to procurement corruption alone is close to a staggering US$100 million annually. This should not be tolerated. Government should take the lead.

You have worked in various countries, what would you say is most unique about Uganda?

I have worked in Asia, Latin America and Eastern Europe and Uganda was my first Africa experience. When I came here I was given a booklet on how to be a Ugandan. My best kept secret about Uganda is the fantastic climate. The warmness, hospitality, outspokenness and intelligence of Ugandans are very enjoyable. I was privileged to start my Africa work in Uganda.

If Uganda were an animal which one would it be and why?

Uganda is known for its tree climbing lions. For many years Uganda was a giant lion climbing higher in the tree. From the World Bank’s perspective Uganda was always on the forefront. It was the first to take advantage of the Heavily Indebted Poor Countries Programme. It was also the first country in the World Bank’s Poverty Reduction Strategy Credit. It was also the first where the World Bank took three of its agencies, World Bank, International Finance Cooperation and IDA had a large flagship in the Bujagali Power Project. Even before coming to Uganda I had that the country had some of the best sector-wide projects in addressing development issues. As a country which has been in the forefront in the bank’s assessment in the 1990s and early 2000s, however, somewhere in the middle Uganda has started getting comfortable, taking a rest and getting tired. It is time to wake up and start climbing higher.

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