Government agencies overhaul will please IMF

September 12, 2018 in Business, Finance, Policy, Trade & Industry, Transport, Travel & Tourism by Editor

September 12, 2018—The government on Tuesday showed its resolve to tame costs amid a widening budget deficit, by announcing an overhaul of departments and agencies at a time when an International Monetary Fund (IMF) Mission is usually in Kampala to carry out a regular review of Uganda’s economy under the PSI programme.

Nearly 150 departments and agencies are affected, including such giants as the Uganda National Roads Authority (UNRA) which for the past three years has been taking the lion share of the national budget getting close to a billion US dollars each year.

This is the kind of news that pleases the Washington-based multilateral institution whose staff preach financial stability and the importance to live within your means by limiting government borrowings that crowd out the private sector in the money markets.

On the other hand, the profile of some line ministries like trade, industries and cooperatives, is set to rise as it becomes one of the biggest agglomerates in government.

But the Uganda Communications Commission is looking to lose some prestige and management of the Rural Communications Development Fund into which telecom firms have been contributing one percent of their annual gross.

Two years ago, another IMF team said: ‘Government finances remain on a sound footing, though expenditure composition can be of concern’.

Plans range from having these institutions revert back to parent ministries or be dismantled altogether. The proposed structural changes if approved on all fronts are expected to cost nearly $120 million to implement.

Frank Tumwebaze, information minister said told a news conference, “This is meant to eliminate functional ambiguities, duplication and roles in government agencies. It is aimed at aligning functions, structures, plans and budgets based on the national strategic planning for efficiency delivery of services.”

According to sources, this is a public sector retrenchment in all but name. It will mean several job losses across the board in the coming months ahead and drastic readjustments of personal financial expectations because these authorities and agencies have been paying salaries on the average four and five times higher than line ministries.

While creation of these agencies during the past odd 20 years was rooted in increasing efficiency and improving regulation, spiraling costs together with many cases for duplication of effort, have caused a re-think.  Another factor has been the feeling held by several ministers that their authority is often undermined by the heads of these agencies.

Last year, President Yoweri Museveni raised the issue in a letter to Prime Minister Dr. Ruhakana Rugunda, ‘Why have an agency when you have a department of government dealing with the same responsibility? Why have boards for money consuming units rather than money generating units?’

Subsequently, the public service ministry contracted consultants, Adam Smith International and its consortium partners in Uganda, UMACIS, DCI and Incafex to carry out a review.

Authors of the report said: ‘While the structural monetary costs were relatively easy to determine in terms of wage cost implications and other office materials, the financial value of the qualitative benefits was difficult to quantify. The more tangible benefits of implementing the recommendations manifest themselves in terms of reduction in operational costs or as an increase in revenues due to improvements in operational processes’.

The total wage bill required for the implementation of the recommended structures is UGX445,166,833,811 ($117,410,259).

The consultants have come out with a 200-page document with nearly a 100 recommendations notably the creation of a Cabinet sub-committee headed by the Minister for Presidency to follow up implementation of Cabinet decisions and Presidential directives. This comes as a possible solution to Museveni’s complaints about a lack of follow-up on what he considers important government programmes.

Other recommendations are that the overall policy coordination and strategy formulation of Micro, Small and Medium Enterprises (MSME) be relocated from Ministry of Finance, Planning and Economic Development to the Ministry of Trade, Industry and Cooperatives.

*Uganda Communications Commission divests itself from the responsibility of managing the Rural Communications Development Fund.

*The enactment of Intellectual Property Law be fast tracked.

*The functions of Uganda Investment Authority, Uganda Export Promotion Board and Uganda Tourist Board be harmonized and merged because of their congruity and for purposes of proper coordination.

*Uganda National Ambulance Department be created in the structure of the Ministry of Health to coordinate all pre hospital emergency care and injuries.

*The National Planning Authority Act 2002, be reviewed to remove the overlaps in the mandates of the National Planning Authority, with the overall functions of the Ministry of Finance, Planning and Economic

*Development and the Office of the Prime Minister; and clarifying the status and operations of National Planning Authority Board;

*Resources be devoted to the development of geothermal energy.

*The enactment of Intellectual Property Law be fast tracked.

*Specific regulations to define and guide the management and operations of the Land fund be developed the revolving loan Fund sub-component be divested from the Commission to an established Financial Institution.

*The Succession Act be amended to make it consistent with the provisions of Articles 20, 21, 24,26,31,33 and 44 the Constitution that provide for gender equality. In particular sections 2(n) (i) and (ii), 14, 15,23,26,27,29,43,44 of the Succession Act should be repealed and replaced with relevant provisions to guide in the distribution of property of intestate persons in a manner that is not discriminatory.

*The name of the Ministry Gender, Labour and Social Development be changed to the Ministry of Gender, Labour and Social Protection.

*NITA-U be divested from planning, building and maintaining public Information and Communication Technology infrastructure development projects so that it can pursue its regulatory role.

*DNA paternity testing, waste water analysis, pesticide analysis; and food and drug analysis be commercialised to generate more internal revenue.