Contacts In Washington: Ana Luna Barros (202) 473-2907 alunabarros@worldbank.org In Kampala : Agnes Biribonwa +256 (41) 230-094 abiribonwa@worldbank.org WASHINGTON , April 26, 2007 – The World Bank Board of Directors today approved an International Development Association (IDA) credit* of US$125 million for Uganda to finance the sixth Poverty Reduction Support Operation (PRSC6). The credit will complement the resources of the Uganda Government and other Development Partners to fund priority programs for poverty reduction and growth. “PRSC6 is the second operation in a series of three PRSCs which supports the Government’s reform program and its efforts to expand and improve service delivery, anchored on the third Poverty Eradication Action Plan (PEAP) covering the period 2005-2008. Over the years, Uganda has made steady progress in implementing wide-ranging reforms that benefit the poor,” says Young Chul Kim, the Senior Country Economist for Uganda and Task Team Leader for the PRSC6 Operation. Like in previous years, PRSC6 supports four of the five pillars of the third PEAP focusing on the critical reform areas of: · human development including health, education and water programs · public sector management and anticorruption efforts · sustained economic growth through improved investment climate and rural development · programs related to gender and infant and maternal mortality In addition, the PRSC6 focuses on strengthened results orientation and deepening reforms to improve transparency and accountability in the public sector. “The PRSC operations will continue to support the Government of Uganda in further prioritizing its spending for maximum poverty reduction impact and in developing a medium term vision to ensure pro-poor economic growth, as spelled out in the Uganda Joint Assistance Strategy (UJAS), ” says Grace Yabrudy, Uganda Country Manager of the World Bank. In line with the UJAS, which is a joint country assistance strategy developed by Uganda’s development partners including the Bank, the performance indicators for PRSC6 were developed in close collaboration with the Government of Uganda and other development partners, including the African Development Bank, the European Union, the International Monetary Fund and the governments of Belgium, Denmark, Germany, Ireland, Japan, the Netherlands, Norway, Sweden, and the United Kingdom. Over the last few years, Uganda has maintained sound macroeconomic policies and advances in its reform program. Uganda fully met 10 out of the 14 agreed upon prior actions in the following areas under the PRSC6 operation: improving the investment climate, satisfactory progress on human development (health, education, water and sanitation), strengthening accountability, transparency, and effectiveness of the public sector, and implementing the Plan for Modernization of Agriculture. PRSC5. In January 2006, the IDA’s Board of Directors approved a 10 percent reduction of the PRSC5 amount from US$150 million to US$135 million to reflect their concerns about expenditure overruns in the public administration budget. PRSC6. With respect to PRSC6, the prior action related to overall budget management was again only partially met with overruns in public administration significantly exceeding the approved budget and requiring supplementary allocation at the end of the fiscal year 2005/06. The excess spending was caused in large part by the increased cost of holding the national elections and increased spending by State House, Office of the President and Parliament. Progress in meeting the PRSC6 prior actions related to anti-corruption and decentralization was also not fully satisfactory, with delays encountered in advancing the remaining legislative changes under the National Anti Corruption Action Plan and in empowering the Ministry of Local Government to provide a more effective support to and supervision of local governments. The reduction in IDA support from US$150 million to US$125 million for PRSC6 underlines the need for the Government of Uganda to consider ways of improving performance in budget execution, decentralization and anti-corruption and to sustain and build on the past successes in advancing pro-poor and growth-oriented reforms.
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