Uganda is banking on the private sector to finance nearly half of the Ush185 trillion ($63.5 billion) second phase of the National Development Policy (NDPII).

National Planning Authority (NPA) chairman Wilberforce Kisamba Mugerwa said private sector investment would account for 46 per cent of total expenditure under the development policy. Public funding will focus largely on building enabling infrastructure.

“NPA has already started the process of getting approval for the NDPII from parliament,” said Dr Mugerwa.

NDPII, the second of six five-year NDPs, aims at propelling Uganda to middle-income status in the next five years as stipulated in the country’s Vision 2040. Priority areas that the policy targets include reviving the national airline, raising the poverty line benchmark, reforming the procurement process and enhancing competition in the financial services sector.

NDPII takes over from NDPI, which was launched in 2010. But as it concludes, delivery on its promise has been minimal. This has prompted the NPA to carry forward some of the plan’s pledges to NDPII.

NPDI recommended investment in the infrastructure, agriculture and information and communications technology sectors.

Patrick Birungi, director in charge of development at the NPA, said that failure to achieve NDP 1 targets was due to lack of a public institution to co-ordinate government departments.

As part of plans to ensure the second phase is successful, entities such as the Uganda National Roads Authority (UNRA) will be mandated to plan and design roads before the Ministry of Finance allocates money for construction.

“At the beginning of NDPI for example, UNRA couldn’t absorb the money it was allocated because it lacked detailed road designs,” said an NPA official.

Rural electrification

The government’s policy on rural electrification will also be revised. Rather than distribute electricity to trading centres across Uganda, government will only supply areas where key growth opportunities such as in agro processing and mining are located.

On reviving Air Uganda’s operations, officials at the NPA said this was critical for the country’s tourism, and has become more pertinent in recent months due to the high cost of air tickets between Kampala and other East African capitals.

On procurement, an unclear law has encouraged corruption.

“The law for instance does not penalise a public servant who purchases a ream of paper at Ush40,000 ($13.8) as long as the procurement process has been followed to the letter,” said Dr Birungi.

“Someone who makes mistakes in the procurement process but buys the same item at Ush15,000 ($5.2) will end up in jail.”

The government also plans to raise the poverty line from $1 to $1.25 a day as set by the World Bank in 2005 to reflect the change in prices of goods.

Dr Birungi said this will help the government estimate the country’s poverty status, and target poor people better.

In the financial services sector, Dr Birungi said that only five banks, which hold 75 per cent of total assets in a market where there are 26 commercial institutions, have the capacity to make decisions.

The NPA recommends that the government comes up with a way to shore up the other banks to make the market competitive.