Final UNDP RMS (1)
- 1. 1 United Nations Development Programme Uganda Country Office Resource Mobilization Strategy 2016-2020 Part I (Third Draft) April 2015 United Nations Development Programme
- 2. 2 Contents Executive Summary ............................................................................................................................3 Introduction.......................................................................................................................................4 Uganda Country Background...............................................................................................................5 Resource Mobilization Context............................................................................................................7 Global Context................................................................................................................................7 Trends........................................................................................................................................8 Aidenvironment in Uganda...........................................................................................................14 Country Office background................................................................................................................18 Country Office Resource Mobilization............................................................................................22 Funding Sources ...........................................................................................................................23 Funding and trend analyses...........................................................................................................25 Resource Mobilization Strategy .....................................................................................................28 Conclusion .......................................................................................................................................29
- 3. 3 Executive Summary This Resource Mobilization Strategy (RMS) has been developed to enable the Country Office (CO) to identity and mobilize funds required to support UNDP in fulfilling its mandate and to achieve the set outcomes in the Country Programme Development 2016-2020 while effectively contributing to Uganda’s sustainable development ambitions in an increasingly resource constrained environment. Beyond the financing needs of the new CPD, the global funding environment has been severely affected by the 2008 global economic and financial crises with dramatic impact on public deficits in traditional contributing countries, and consequently on ODA and donor contributions to the UN in general. However, at the same time, trade, finance and other links among emerging market and developing countries are growing. UNDP Uganda’s ability of adequately finance its next Country Programme in the post-2015 development framework will depend on several factors. First, UNDP needs to diversify its sources of funding from traditional donors and capitalize on the emergence new global players such as foundations, emerging economies and the private sector. Secondly, in order for UNDP to finance a transformative development agenda will require that available resources be used more effectively and strategically to catalyze additional financing from official and private sectors. This Resource Mobilization Strategy includes an overview of Uganda’s current overall development context, a review of the range of existing and potential financing options and tools, an analyses of past fund raising experience and an outline of an action plan for 2015 to aid the systematic search for and raising of funds for the planned CPD results. The second part of the RMS provides an in-depth analyses of ways to support effective resource mobilization and how to forge, maintain and expand better partnerships, including new donors, the private sector and foundations. This resource mobilization strategy also includes a toolkit on donor interests and priorities to support a smooth implementation of the strategy and will build on previous experiences of resource mobilization, looking at the strengths and opportunities while learning from the weaknesses.
- 4. 4 Introduction Uganda aspires to become a competitive upper-middle-income country by 20401. The national development plan, 2016-2020, has prioritized investments in agriculture, tourism, minerals, infrastructure and human capital development sectors, with governance as its backbone2. The plan is aligned to the sustainable development goals and takes into account the 6.4 per cent growth of Uganda over two decades and its reduction of poverty from 54 per cent in 1992 to 19.7 per cent in 20133. Uganda has transitioned from a post-war, one-party state to an evolving multi-party democratic state, ranking 19th of 52 African countries in terms of good governance4. Northern Uganda, stabilized through the peace, recovery and development plan, is slowly reintegrating into the national economy. Uganda has shifted from poverty reduction strategies to a transformation agenda, anchored in ‘Agenda 2063’ of the African Union, the integration agenda of the East African Community and new prospects for the extractives industry. In line with the NDP II priorities, UNDAF (2016-2020), UNDP’s Strategic Plan (2014-2017), UNDP Gender Equality Strategy (2014-2017), and the emerging Sustainable Development Goals, UNDP’s CO next programme cycle (2016-2020) will comprise of two portfolios: Inclusive, Effective Governance and Sustainable and Inclusive Economic Development. UNDP will add value through a combination of technical expertise, application of clear standards to project design and execution coupled with a long-term perspective and cross-country experience. Additionally, the new CPD will see UNDP focus on 4 strategic outcomes linked across thematic areas planned using evidence and clear theories of change, and designed to maximize scale and sustainability. By 2020 the Country Office expects to have doubled the current portfolio though a process of managed growth. The next Country Programme Resource Mobilization targets are based on the Country Office delivery level in the past two years and will make special efforts to leverage resources from UN joint programmes, governments, regional/global initiatives and new/non- traditional partnerships such as foundations and the private sector. In 2015 and going forward, the Country Office faces funding shortfalls, specifically in regards to core resource allocations with traditional core contributors preferring to fund specific thematic programmes. This is made worst by the general funding environment which has been severely affected by the 2008 global economic and financial crises with dramatic impact on public deficits in key contributing countries, and consequently on ODA and donor contributions to the UN and UNDP in particular. In addition, recent donor aid suspension linked to government accountability issues and the passage of the Anti-Homosexuality Bill has worsened this declining trend in funding expectations for Uganda. However, the imminent launching of NDP II and the subsequent formulation of UNDAP and the new CPD constitute a potential for renewed UNDP dialogue with development partners. 1 Vision 2040 2 Draft national development plan, 2016-2020,18 December2014 3 National householdsurveys, 1992-1993 and2012-2013 4 Ibrahim index,2014
- 5. 5 Uganda Country Background The past two decades have seen the Ugandan economy go through an expansive phase of sustained economic growth, with GDP growing at an average annual rate of 7.1% from 1992 to 2011, the third highest growth rate recorded in Sub-Saharan Africa during this period, only surpassed by Equatorial Guinea (20.1%) and Liberia (9.8%). This strong economic performance has been driven by growth in the industrial and services and has been underpinned by strong investment and export. This prolonged phase of economic growth has benefitted from a period of relative macroeconomic and political stability, especially since the end of the armed conflict in Northern Uganda in the mid-2000s. However from 2006 and onwards, the country witnessed more economic volatility and GDP growth slowed to an average of just about 5%. Growth has also been bolstered by large inflows of ODA, averaging 14.7% of GNI from 1991 to 2010, as well as by a general policy of openness to both foreign investment and international trade. Uganda’s economic outlook is therefore positive, but downside risks abound. An increase in public investment, is likely to see the economy grow faster, at a rate of approximately 6.2% in FY14-FY15, and to maintain this upward trajectory into the near future. The predominant source of growth will be increased economic activity of the construction sector, as Uganda invests heavily in a number of major infrastructure projects. The agricultural sector, which employs the bulk of the labor force, is unlikely to achieve high rates of growth due to supply-side constraints, such as limited use of improved inputs, lack of irrigation systems and low levels of mechanization.5 Uganda has also made important progress towards meeting the Millennium Development Goals (MDGs) as the sustained period of strong economic growth has decreased poverty significantly in recent years (from 31% in 2005-06 to 22% by 2012-13), thus surpassing the 2015 MDG target of halving the 56% poverty rate recorded in 1992-93. Additionally, Uganda has made progress towards achieving goals such as promoting gender equality and empowering women, reducing child mortality, ensuring environmental sustainability and developing a global partnership for development. Challenges In spite of the progress however, with a Gross National Income (GNI) per capital of $510, Uganda remains a very poor country and far from the middle income status it aspires to achieve. Despite declining poverty rates, the absolute number of poor has decreased relatively little due to high population growth (3.03%) with Uganda’s population doubling since 1990. Moreover, the poverty line is low and many remain poor and vulnerable to poverty. Additionally, poverty is 14 points higher in rural than urban areas, and remains high in the northern (44%) and eastern (24.5%) regions, compared to the national average of 19.7%6. Although national poverty levels have declined, 43% of the population could regress into poverty in the event of shocks7 as a 5 http://www.worldbank.org/en/country/uganda/overview 6 Povertyestimatesare basedonthe comparisons of the consumptionexpenditure per adult equivalent withthe official absolute povertyline. 7 Poverty Status Report (2014)
- 6. 6 significant percentage of the population relies on subsistence agriculture, a major source of vulnerability. Inequality is also high by international standards (0.438), which could undermine the achievements in growth and poverty reduction.8 Uganda continues to face severe human and institutional constraints and capacity gaps in spite of resources already committed to human and institutional development. Uganda‘s institutional framework is characterized by several coordination failures, corruption in public delivery system and generally endemic malaise in most of the public sector departments. While the basic policy, legal and institutional framework for improved accountability is in place, enforcement is lacking as evidenced by wastage and leakage of public funds.9 Uganda is still an evolving democracy with the domestic political arena marked by a series of events that have led to a growing perception of intolerance and a shrinking space for political and civic engagement. These have included the temporary closure of media establishments, the passage of the Public Order Management Act and the Anti-Homosexuality Bill which have curtailed basic rights and freedoms. Additionally there is low citizen involvement in electoral processes due to limited awareness and civic engagement. The country also has to manage a number of risks, particularly those resulting from weaknesses in the fiscal management regime in the face of reduced aid inflows to Uganda, spending pressures from upcoming elections, both of which could disrupt future public spending plans. Environmental concerns also continue to rank high among Uganda’s main development challenges. The country’s natural resource base rapidly reduced between 1990 and 2010 increasing vulnerability to climate change and other hazards e.g. drought, floods, landslides and health epidemics. In particular, forest area has declined from 25 % to 15% and wetland cover from 15.6% (1994) to 10.9% (2008)10 attributed to: limited capacity of regulatory agencies to enforce compliance to laws and policies; unsustainable production and consumption systems; limited alternative livelihood opportunities; and unplanned human settlements Uganda National Development Priorities 2016-2020 The National Planning Authority (NPA) is currently preparing the second NDP for the period FY16-FY20, which will focus on three ‘opportunity areas’ (agriculture, tourism and mineral development) with two ‘fundamentals’ (infrastructure and human development). A key challenge will be to address the implementation bottlenecks, which has negatively affected the implementation of the first NDP. This plan has four objectives, namely: 1. Increase Sustainable Production, Productivity and Value Addition in Key Growth Opportunities, 8 http://www.worldbank.org/en/country/uganda/overview 9 http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and- Operations/UGANDA%20-%202011-15%20RBCSP.pdf, p11 10 National State of Environment Report, 2012
- 7. 7 2. Increase the Stock and Quality of Strategic Infrastructure to Accelerate the Country’s Competitiveness, 3. Enhance Human Capital Development, and 4. Strengthen Mechanisms for Quality, Effective and Efficient Service Delivery Resource Mobilization Context Global Context The negative effect of the 2008 global economic and financial crisis, coupled with the Euro zone crisis has, and continues to have immediate spill-over effects in many UN programme countries. However, development assistance rose by 6.1% in real terms in 2013 to reach the highest level ever recorded, despite continued pressure on budgets in OECD countries since the global economic crisis. Donors provided a total of US$ 134.8 billion in net official development assistance (ODA), marking a rebound after two years of falling volumes, as a number of governments stepped up their spending on foreign aid. The OECD Development Assistance Committee (DAC) indicated that aid levels could increase again in 2014 and stabilize thereafter. However, a trend of a falling share of aid going to the neediest sub-Saharan African countries to look likely to continue. Bilateral aid to sub-Saharan Africa was US$ 26.2 billion, a decrease of 4.0% in real terms from 2012. Aid to the African continent fell by 5.6% to US$ 28.9 billion. Excluding debt relief, which was high in 2012 due to assistance to Côte d’Ivoire, net aid in real terms rose by 1.2% to sub- Saharan Africa but fell by 0.9% to the continent as a whole. The largest donors by volume were the United States, the United Kingdom, Germany, Japan and France. Denmark, Luxembourg, Norway and Sweden continued to exceed the 0.7% ODA/GNI target and the UK met it for the first time. The Netherland’s fell below 0.7% for the first time since 1974. Net ODA rose in 17 countries, with the largest increases recorded in Iceland, Italy, Japan, Norway and the UK. It fell in 11 countries, with the biggest decreases registered in Canada, France and Portugal. The G7 countries provided 70% of total net DAC ODA in 2013, and the DAC-EU countries 52%. The US remained the largest donor by volume with net ODA flows of US$ 31.5 billion, an increase of 1.3% in real terms from 2012. US ODA as a share of GNI was 0.19%. Most of the increase was due to humanitarian aid and support for fighting HIV/AIDS. By contrast, US net bilateral aid to LDCs fell by 11.7% in real terms to US$ 8.4 billion due in particular to reduced disbursements to Afghanistan. Net ODA disbursements to sub-Saharan Africa fell by 2.9% to US$ 8.7 billion. ODA from the 19 EU countries that are DAC members was US$ 70.7 billion, a rise of 5.2% in real terms from 2012, and 0.42% of their combined GNI.
- 8. 8 In 2013, net ODA by the 28 EU member states was US$ 71.2 billion, or 0.41% of their combined GNI. Net disbursements by EU Institutions to developing countries and multilateral organisations were US$ 15.9 billion, a fall of 13.1% from 2012, due especially to a lower volume of concessional loans.11 On the other hand, many developing countries have experienced growth in recent years, contributing to evolving shifts in global development dynamics. The 2014 OECD/DAC forward looking survey suggests a continuation of the worrying trend of declines in programmed aid to LDCs and low-income countries, in particular in Africa. CPA to LDCs and LICs is set to decrease by 5%, reflecting reduced access to grant resources on which these countries are highly dependent. Some Asian countries may see increases, however, so that by 2017 overall allocations to Asia are expected to equal those to Africa. Even though a moderate recovery is underway in the major advanced economies, according to the OECD’s latest Interim Economic Assessment of September 2014, growth has slowed down in some of the large emerging economies. Since they now account for a large share of the world economy, the slowdown in the emerging economies points to sluggish near-term growth globally, despite the pick-up in some of the advanced economies. The main effect of the global economic crisis from the perspective of donors appears to have been an even greater focus on performance in the implementation of programmes and management of operations of each organization, including determining whether staff and other costs are being used effectively and efficiently. This is a result of greater scrutiny and, in some cases, a reduction of aid budgets, and the increased emphasis being placed on accountability, transparency and aid effectiveness in their own countries. Trends There are discernable trends in ODA of which the following are particularly noteworthy for UNDP: Growing complexity of the Aid Environment The emerging aid landscape is evolving, becoming increasingly complex and interconnected. ODI12 proposed a new taxonomy of “development assistance flows” in 2013 (Figure1), distinguishing between traditional and non-traditional development assistance flows. Aid from OECD-DAC donors, including through contribution to multilateral agencies, has become a less important source of development finance at the global level, despite growing rapidly over the 2003 to 2009 period. ODI estimates that total development assistance grew from US$64.8 billion in 2000 to US$173.3 billion 2009. In 2009, non-traditional assistance accounted for US$53.3 11 OECD 2014 12 Overseas Development Institute
- 9. 9 billion (equivalent to 31 percent of the total), up from US$5.3 billion (or 8 percent of the total) in 2000. Figure 1: Taxonomy of Development Assistance After an increase in lending in 2009 and 2010, other official flows (OOF) are now less dynamic and one of the most volatile components of the international development financing system. When accounting for OOF, which are not sufficiently concessional to qualify as ODA (such as loans from the International Bank for Reconstruction and Development (IBRD)), total development assistance has grown from US$77.1 billion to US$213.5 billion between 2000 and 2009 and non-traditional flows from US$17.6 billion (22.8%) in 2000 to US$93.5 billion (43.8%) in 2009. During that time, several non-DAC donors and private institutions have grown to a significant size, namely China and India; philanthropists such as the Bill and Melinda Gates Foundation or the Ford Foundation; and social impact investors, such as the Shell Foundation and the Acumen Fund.13 New Donors: Emerging Market Economies (EMEs) The last decade saw a diverse group of countries gain prominence in the aid landscape: non- DAC members of the OECD and EU; upper middle-income countries (in Latin America, the Middle East, and East Asia); and other developing countries. Many are ramping up their development engagements through a broad range of channels and activities. This includes the BRICS group of countries (Brazil, Russia, India, China, and South Africa), which account for 25 percent of global GDP and 40 percent of the world’s population, and Saudi Arabia, South Korea, and Turkey. The boost in ODA from the new actors illustrated in figures 2 and 3 captures only a small piece of the upward trend in external flows contributing to development.14 Overall, by 2011, the annual concessional flows from emerging economies to LICs was roughly estimated to be between US$12–15 billion, which represented between 10 percent and 15 percent of the amount of aid provided by developed countries (the higher range including non- concessional OOF).This is close to the order of magnitude of the IDA, which provides around US$16–17 billion a year in grants and highly concessional loans. China, which contributes about half of total aid flows from the BRICS, has grown its technical assistance grants at an annual rate of 25–30 percent, reaching the annual amount of US$67 billion, with about 40 13 World Bank. Financing for Development Post 2015, 2013, p18 14 World Bank, Finance for Development: trends and Opportunities in a Changing Landscape, CFP Working Paper, 2011
- 10. 10 percent of these combined flows going to Sub-Saharan Africa and about 60 percent being directed to the development of economic infrastructure. The share of development finance coming from the EMEs may continue to rise, if only because of their increasing share in the world economy.15 Figure 2: Estimated Aid from BRICS (2003-2009) US$ Billions16 Figure 3: ODA from Non-DAC Donors, excluding BRICS (2003-2009) US$ Billions17 15 China and India combined are expected to represent about half the world’s GDP by 2050 16 Brautigam, Deborah, China’s African Aid: Transatlantic Challenges- A Report to the German Marshall Fund of the United States, International Development Program, School of International Service, American University, Washington, DC, 2008;and Smith, Kimberley et al, Beyond the DAC: The Welcome Role of Other providers of Development Cooperation, OECD DAC, DCD Issues Brief, May 2010 17 OECD DAC and Zimmermann, Felix and Kimberley Smith, More Money More Actors, More Ideas: For Development Co-operation, Journal of International Development, 2008
- 11. 11 New Actors: Private Philanthropy and Vertical Funds The new aid landscape has evolved to include a number of foundations and non-governmental organizations. Private aid today amounts to approximately US$60–70 billion per year, equivalent to nearly half the net ODA disbursed in one year by all OECD DAC members. The US dominates philanthropic private flows to the developing world with US$39 billion transferred in 2010. Philanthropy has been growing fast, with more than 100 billionaires meeting Bill Gates’ challenge to leave at least half of their wealth to charity over time. Private philanthropy to fragile states has increased in recent years, as well as South-South philanthropic flows, particularly in the Arab world. Vertical funds are multi-stakeholder global programs that provide earmarked funding for specified purposes. They have proved very effective to channel assistance to core but chronically underfunded development sectors, such as disease eradication or climate change. However, the proliferation of vertical funds has not always been conducive to aid effectiveness, creating distortions, particularly in low-capacity environments with weak planning and budgeting systems. Many of these were created in the hopes of attracting substantial private contributions, but all remain overwhelmingly dependent on traditional ODA providers. Some have reached a critical size. The Global Fund to Fight AIDS, Tuberculosis, and Malaria has secured pledges totaling about US$30 billion since its creation in 2002, 95 percent of which come from the public sector. Over 60 percent of the pledges have been paid to date. The Global Environment Fund (GEF), a partnership between 182 countries, international agencies, civil society, and private sector has provided US$11.5 billion in grants since its creation in 1991 and leveraged US$57 billion in co- financing for over 3,215 projects in over 165 countries. New development partners are breaking out of the mold of traditional ODA financing, promoting their own economic and strategic interests, while at least partially meeting needs not addressed by traditional donors. This flexibility is often made possible by different transparency and safeguard standards than those governing traditional donors. Rather than grant financing for budget support and health, education, and social infrastructure, new actors frequently offer concessional or semi-concessional loans emphasizing physical infrastructure development.18 A Public-Private Infrastructure Advisory Facility (PPIAF) study indicated that non-traditional partners contribute 38 percent of total infrastructure financing (US$8 billion in 2006), the same order of magnitude as private participation in infrastructure financing, and significantly greater than traditional ODA financing (US$5 billion or 22 percent of total financing).19 18 G24 Secretariat, Financing Development in Africa: the Growing Role of Non- DAC Development Partners, 2008 19 World Bank. V. Foster, et al., Building Bridges: China’s Growing role as Infrastructure Financier for Africa, PPIAF, 2008
- 12. 12 Moreover, non-traditional financiers are mainly concentrated in power and transport sectors, whereas traditional donors are also a dominant source of financing for water and sanitation, and the private sector is the dominant source of financing for telecommunications. Thus, beyond increasing the volume of resources, new actors engaged in South-South cooperation are playing a complementary role, entering the areas left out of traditional financing with the greatest need. Private Financial Flows Achieving Post-2015 development goals will require the mobilization of resources from private sources including FDI, bank loans, bond issuance, institutional investors and private transfers (notably remittances, estimated to be approximately US$400 billion in 2012). Globally, there are ample savings, amounting to US$17 trillion, and liquidity is at historical highs, however the challenge will be in how to direct savings to support the achievement of global development objectives. FDI is a dominant private financing modality in most developing countries. It is vital for private sector productivity and growth and can help to diversify the economy. By comparison, official inflows, net of debt repayment, only accounted for1 percent of international capital inflows in 2012 .Net FDI inflows to developing countries reached close to US$800 billion in 2014 as global economic growth is accelerated modestly. Over the past decade, many developing economies have demonstrated an increasing ability to access international capital markets. International long-term debt flows to developing countries—bonds and syndicated bank-lending with at least five years of maturity—increased four-fold from 2000 to 2012. However, the global financial crisis led to a sharp contraction in long-term international debt flows, with a protracted retrenchment in global banking lending, particularly affecting MICs (by 2009, private capital flows to MICs20 were at about half their 2007 level). 20 Middle Income Countries
- 13. 13 Figure 4: International Capital Flows to Developing Countries, 2012 (In US$ Billions and as a percentage of total flows)21 Aid Effectiveness: An Ongoing Effort Aid has become increasingly fragmented and ear-marked, increasing its complexity, volatility, and the administrative burden for aid recipients, potentially decreasing its effectiveness. The average size of donor-funded transactions has declined from close to US$3 million in 1997 to about US$1.3 million in 2009, while the number of donor activities reached about 120,000 in 2009. Earmarked multilateral and bilateral ODA is estimated to account for over 40 percent of total ODA. Earmarking can help raise financing for specific issues that may be high priority for donors and rally public support for aid, but it is less predictable than performance-driven aid, may reduce reform incentives, skew resources towards specific items and away from other, more critical priorities, and undermine country ownership by altering the priorities that countries place on specific programs. At the same time, an estimated 70 percent of all ODA channeled through multilateral institutions remains core, i.e. is not earmarked. Among the OECD-DAC countries, the average share of multilateral aid in 2010 was 33% and an estimated $40 billion was channeled through multilateral 21 Long-term financing for growth and development. G20 Umbrella paper, Feb. 2013 and Global Economic Prospects, 2013, World Bank.
- 14. 14 organizations including EU institutions, the International Financial Institutions, the United Nations, and Global Programme Partnership such as the Global Fund. Share of multilateral aid between 2006 and 2010 European Development Fund (EDF)- plus European Union (EU) budget (36%) International Development Association (IDA) (22%) UN Funds and Programmes (9%) The African and Asian Development Banks (AfDB and ADB) (5% and 3%) The Global Fund to Fight AIDS, Tuberculosis and Malaria (7%) Only 19% of total multilateral aid was allocated to the remaining 212 multilateral organizations, funds or trust funds. The many recent reviews of multilateral organizations suggest that donors are in search of suitable methods of comparing the effectiveness or efficiency of multilateral organizations in order to shape their multilateral spending decisions. Relative to traditional donors, new actors operate according to a very different set of motivations, interests, and experiences. As a result, their approach generally involves mutually beneficial, integrated packages combining ODA with trade, investment, and other commercial deals. Reflecting the growing share of non-ODA actors, the international aid effectiveness architecture has evolved from a focus on donor harmonization and alignment to a broader approach of inclusive development partnerships. The Global Partnership for Effective Development Co- operation (GPEDC) created at the 4th High Level Forum on Aid Effectiveness in Busan (2011) brings together multi- and bilateral donors, emerging economies that are both recipients and providers of development cooperation, recipient countries (including fragile and conflict affected states), the private sector, CSOs, and parliamentarians. Aid environment in Uganda Like many Sub-Saharan Countries, Uganda’s development budget is largely financed through Official Development Assistance (ODA) up to 30% of National budget. In 2010/2011, 35% of the budget was from external assistance (estimated US$ 768.1 million in project support and US$ 410 budget support). The management and coordination of ODA, is the responsibility of the Ministry of Finance, Planning and Economic Development (MoFPED), Aid Liaison Department. The main aid instruments for external financing recognized by MoFPED are as below. Budget support: Transfer financing from development partners (DPs) to national treasury to finance programmes and projects managed according to government’s budgetary procedures. This is the preferred modality by Government. Project support: Government agrees with DPs on specific outcomes in a set of thematic areas. This is the preferred modality for DPs because of perceived weaknesses of Government in managing aid. Project support is further categorized into Medium Term
- 15. 15 Expenditure Framework (MTEF) project support and non-MTEF project support depending on whether the support could be aligned to Government’s MTEF. Technical assistance: Provision of ideas, knowledge, practices, technologies and skills to build capacity mainly in the areas of policy and institutional development. This is generally practiced through attaching experts to ministries or local government who is not part of any project. In both real terms and as a percentage of GDP, development assistance has continued to decline during the NDP 2010/11-2014/15 period, but in nominal terms it has remained constant and for the moment donor financing remains very important in Uganda’s development. Finance provided “on budget” still constitutes over 20 % of overall government expenditure and over 40 % of the development budget (FY 2011/12). In addition there are substantial resources provided by donors outside the government’s budget framework22. (MTR) In the first two years of the NDP, MoFPED estimate that Uganda received aid averaging US$ 1,377 million per annum compared to an annual average of US$ 1,434 million in the preceding two years. Among the aid provided under the NDP, 62 % has been included on budget as part of the government’s medium term expenditure framework and 38 % have been provided off budget23. The flow of overall development assistance in the past 4 fiscal years is summarized in Table 1. The Government of Uganda aims to reduce external financing of debt from external partners in line with the principles set out in the External Debt Strategy (2007) and the new National Development Plan II. It aims to do this through increased domestic revenue collection as well as financing through oil production, although this is not expected to begin until 2019/20. Additionally, the suspension of direct budget support worth up to $300 million annually by the major development partners stemming from corruption allegations in 2012 and the passage of the Anti-Homosexuality Act in 2014 has had a major impact on the aid environment in Uganda. Table 1: Overall Development Assistance by Type (million US$ )24 Type FY 2008/09 FY 2009/10 FY 2010/11 FY2011/12 Budget Support (including HIPC) 334.33 318.61 326.00 275.39 MTEF Project Support (excluding security) 432.95 534.59 444.95 662.37 Non-MTEF Project Support 558.87 688.29 566.86 478.96 TOTAL ODA 1,326.15 1,541.49 1,337.81 1,416.72 22 Mid-TermReviewof the Uganda National Development Plan (2013) 23 OECD data showdisbursements averagingUS$ 1654millionp.a. in 2010 and2011,down froman average ofUS$1695million p.a. in thetwo precedingyears. The differences betweenMoFPED andOECD datahighlight severeshortcomings in aidtransparency. 24 Ministry of Finance, Planning and Economic Development
- 16. 16 Table 2: Overall Development Assistance by Type as a percentage of GDP25 Type FY 2008/09 FY 2009/10 FY 2010/11 FY2011/12 Budget Support (including HIPC) 1.8 % 2.1 % 1.8 % 1.4 % MTEF Project Support (excluding security) 2.3 % 3.5 % 2.4 % 3.2 % Non-MTEF Project Support 3.0 % 4.5 % 3.1 % 2.3 % TOTAL ODA 7.1 % 10.1 % 7.3 % 6.9 % Figure 5: Development Assistance by donor26 25 Ibid 26 Ibid 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% FYs 2008/09- 2009/10 FYs 2010/11- 2011/12 FYs 2008/09 - 2011/12
- 17. 17 Figure 6: Trends in MTEF Project Aid by Sector Figure 7: Trends in Non-MTEF Project Aid by Sector 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% WORKS&… PUBLIC… ENERGYAND… HEALTH EDUCATION AGRICULTURE ACCOUNTABILI… WATER&… ICT JLOS SOCIALDEVT TOURISM,TRA… LAND,HOUSIN… PUBLICADMIN JUDICIARY FYs 2008/09-2009/10 FYs 2010/11-2011/12 FYs 2008/09-2011/12 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% FYs 2008/09-2009/10 FYs 2010/11-2011/12 FYs 2008/09-2011/12
- 18. 18 Country Office background In line with the priorities of the second national development plan (NDP 2), the United Nations Development Assistance Framework 2016-2020, the UNDP Strategic Plan 2014-2017, the UNDP Gender Equality Strategy 2014-2017, and the Sustainable Development Goals, the theory of change of the next Country Programme 2016-2020 is that achieving good governance creates enabling conditions for achieving high-quality human capital, which in turn drives attainment of sustainable, inclusive economic development. The country programme will comprise two portfolios: inclusive, effective governance and sustainable, inclusive economic development. The Inclusive, Effective Governance portfolio This will bolster national capacities in rule of law and constitutional democracy; institutional development, transparency and accountability; and peace, security and system resilience: Under the rule of law, UNDP will focus on upstream support to targeted Justice, Law and Order (JLOS) institutions in order to enhance service delivery and equitable access in line with human rights standards. Downstream support will provide increased access to legal aid and justice for poor and vulnerable groups, especially the elderly, HIV/AIDS infected and affected persons; adolescent girls; youth; female-headed households, widows and single-mothers. Support to constitutional democracy will focus on strengthening democratic institutions for improving the electoral cycle and strengthening civil society participation, including promoting women’s participation in political leadership. The national peace platforms will be supported to become institutionalized mechanisms for political dialogue and consensus building. UNDP will enhance government effectiveness through Institutional development, transparency and accountability in order to deliver on commitments to anti-corruption conventions. Advocacy and capacity development support will facilitate the establishment of independent high-level national research and evaluation functions to foster transformative development approaches. Leadership development support to legislative, accountability and public sector management institutions will strengthen integrity, oversight, transparency, and accountability, particularly in the extractives and infrastructure sectors. Supporting civil society and media engagement will enhance public demand for accountability. Under the peace, security and system resilience component, ‘downstream’ support for innovative formal and informal community security and peacebuilding mechanisms will promote social cohesion. UNDP will lead the United Nations country team Great Lakes strategy for cross-border peace and resilience system-building initiatives to leverage peace dividends for communities. The Horn of Africa initiative of the Intergovernmental Authority on Development (IGAD) will be leveraged, particularly in Karamoja. Voice and participation of women, youth and the elderly will be strengthened in line with United Nations Security Council resolution 1325/1820. The Sustainable and Inclusive Economic Development portfolio This will focus on strengthening capacities for (a) natural resources management, reducing ozone-depleting emissions and developing resilience to climate change and disaster risk, and (b) expanding livelihood and employment opportunities. Under the natural resources management, reduction of ozone depleting emissions and developing resilience to climate change and disaster risk component, UNDP will strengthen capacity at national and subnational levels, focusing on oversight and coordination; investment efficiency;
- 19. 19 creation of value chains in the agriculture, tourism and extractive industries; protecting ecosystem services; facilitating the shift of government investments from emergency response to disaster risk management; building resilience to natural disasters and climate variability; and empowering citizens, including women and youth, to monitor and demand public accountability from regulatory agencies. UNDP will support Government in scaling up proven innovative approaches and evidence-based policy reform to address emerging issues. The livelihood and employment opportunity component will strengthen institutions to improve productive capacities targeting the insecure non-income poor27, income-poor, women, youth and other vulnerable groups. Public-private partnerships will be supported to increase investment in ‘green commodity’ value chains employing the targeted populations. Leveraging the spatial plan of the second national development plan, UNDP will support development of regional centres within the tourism, extractives and agriculture sectors, focusing on dry-land districts; the Albertine Rift; the mountainous ecosystems of Elgon and Rwenzori; and the Lake Victoria and Kyoga crescents. The inclusive, effectivegovernance and the sustainable inclusive economic development portfolios will focus on the insecure non-income poor and income-poor, women and youth, and on northern and eastern Uganda. Additionally, transformational change will be achieved through ‘upstream’ capacity development, by scaling up and funding development solutions. UNDP Uganda Response Plan (2016-2020) 27 The insecurenon-income poorare those non-income poorat risk of regressinginto poverty in case ofshocks Inclusive Governance Portfolio •Rule of Law •Constitutional Democracy •Institutional Strengthening, Transparency, Accountability •Peace, Security & System Resilience Sustainable &Inclusive Economic Development Portfolio •Natural Resources Management, Reducing Ozone depleting emissions & Climate Change Resilience. •Disaster Risk Management •Expanding Opportunities for Employment and Income Generation
- 20. 20 UNDP Ongoing Processes Below is summary of on-going processes that are making UNDP more efficient and effective in achieving its vision. These are: UNDP Strategic Plan 2014-2020: Engagement Principles 1. National ownership and capacity. 2. Human rights approach. 3. Sustainable human development. 4. Gender equality and women's empowerment. 5. Participation and voice. 6. South-South cooperation and Triangular cooperation. 7. Global citizenship. 8. Universality. UNDP Strategic Framework UNDP has designed a global Strategic Plan 2014-2017 with the vision of to help countries achieve the simultaneous eradication of poverty and significant reduction of inequalities and exclusion. This Strategic Plan 2014 – 2017 has moved the agency towards more focused interventions by reducing strategic goals from 34 to 7 outcomes integral to inclusive, sustainable development, and where UNDP makes the greatest contributions. UNDP Strategic Plan 2014-2017: Areas of Focus Sustainable Development Pathways Inclusive & Effective Democratic Governance Resilience Building
- 21. 21 Programme alignment and effectiveness Shifts in headquarters and regional business architecture are bringing staff together to cut through traditional programme “silos,” recognizing the reality that development’s many dimensions interconnect and build on each other. A process of aligning UNDP country programmes maintains their traditional responsiveness to national priorities, while gearing them up to work in new ways—delivering better results, greater focus and increased value for money. Robust Integrated Results and Resources Framework 2014-17 This has introduced more effective monitoring of how all UNDP offices achieve results and spend resources. To uphold quality assurance and foster organization-wide consistency, it includes core indicators and measurement guidance. UNDP 2014-2017: New/Emerging Issues 1) Sustainable production technologies 2) Access to modern energy services – renewable / efficient 3) Natural resource management 4) Extractive industries 5) Urbanization 6) Citizen security 7) Social protection Delivering As One in Uganda The UN Delivering as one is an ongoing initiative for Uganda that is a Self-starter. This aims to make the UN development system a more relevant, responsive and results-oriented organization through joint planning, programming and resources. Currently 2 Joint Programmes are on-going in HIV and Gender with several more in the pipeline. Additionally UNDP is spearheading the proposed UN common premises to house all UN agencies in Uganda. Convergence areas As per recommendation from the UNDAF review, agencies agreed on having convergence areas in Youth, Maternal Health and Gender to be able to deliver results faster and demonstrate greater impact. UNDP is leading the Youth convergence area and this will increase its visibility and showcase UN’s ability to contribute to key government priorities.
- 22. 22 Country Office Resource Mobilization UNDP is funded via two sources; core resources such as TRAC and and non-core resources such as trust funds, thematic trust funds and other resources mobilized from donors. In the last Country Programme 2010-2014/5, UNDP Uganda’s budget was largely funded by TRAC resources. The targeted value of the new proposed Country Programme 2016-2020 is $141,497,000 million (avg. $28.3 million annually) and is based on the Country Office delivery level in the last two years. By 2020, the Country Office expects to have doubled the current portfolio through a process of managed growth and increasing the absorption capacity of the country office through partnership with civil society and the private sector as well as strengthening procurement capacity and maximizing delivery per person. SPOutcome 1: Inclusive Growth& livelihoods 73% SPOutcome.2: Democratic Governance 16% SPOutcome .5:Crisis Prevention& Recovery 11% Size of the CPD Budget by SP Outcome
- 23. 23 Resource Mobilization Outlook for 2016-2020 Focus Area AlreadyMobilized or Confirmed (in USD) Estimated TRAC (in USD) To be mobilized (in USD) Total Envelope (in USD) Outcome 1 28 7,161,455 21,700,000 81,000,000 102,700,000 Outcome 229 - 16,000,000 7,000,000 23,000,000 Outcome 530 - 10,500,000 5,000,000 15,500,000 TOTAL 7,161,455 48,197,000 93,000,000 141,497,000 • GOU cost-sharing $7.5M • South-South $0.7m • 3rd Party Cost sharing $52.7m • Funds, Trust funds $31.7m; • Thematic funds $0.4m Funding Sources UNDP Core Resources TRAC TRAC (Target for Resource Assignment from the Core) are funds distributed by UNDP Headquarters to programme countries throughout the world based on a methodology that takes into account several criteria such as the country's Gross National Product per capita, its population size, the quality of the country programme, and the special development needs of countries in crisis. 28 Inclusive Growth and Livelihoods 29 Democratic Governance 30 Crisis Prevention and Recovery
- 24. 24 UNDP Non-CoreResources Thematic Trust Funds Thematic Trust Funds in general are the operative instrument to help UNDP mobilise resources to meet the development priorities of partner countries. Thematic trust funds are specific to and administered by an individual entity and contributions from donors to the TTF can be made through three different “Windows”: Country Windows: for funds earmarked to specific countries for thematic activities Regional Windows: for funds earmarked to specific regional programmes for thematic activities Global Windows: for non-earmarked thematic contributions, for country, regional, and global use Multi-donortrustfunds Both multi-donor trust funds (MDTFs) and thematic trust funds are forms of pooled resources and thus a more flexible form of non-core contributions. The multi-donor trust funds concern multi- entity operations and are covered by the dedicated fund administration services of the UNDP Multi-Partner Trust Fund Office (MPTF Office) on behalf of the United Nations development system. The emergence of these two types of funds can be seen as a result of efforts by donors to promote enhanced aid effectiveness, counterbalancing high fragmentation as a result of the predominantly single donor-and single-programme and project specific nature of non-core resources flows. JointProgrammes Joint programmes are a mechanism developed to contribute to making the UN-DOA more coherent, effective and efficient. A joint programme is a set of activities contained in a common work plan and related budget, involving two or more United Nations organizations and (sub-) national partners. The work plan and budget form part of a joint programme document, which also details roles and responsibilities of partners in coordinating and managing the joint activities. The joint programme document is signed by all participating organizations and (sub-) national partners. Joint programmes are mostly financed from non-core resources, through any combination of the above non-core funding modalities.
- 25. 25 Funding and trend analyses Programme Delivery Trends 2010-2014 Year Programme Delivery (US$) Core/Regular (US$) Non-Core/Other (US$) Core/Non-core ratio (%) Global Ranking Regional Ranking 2010 11,904,510 4,222,764 7,681,746 35%/65% 88 29 2011 10,348,657 3,994,992 6,353,665 39%/61% 92 33 2012 14,583,007 7,450,058 7,132,949 51%/49% 71 22 2013 13,734,931 8,894,167 4,840,764 65%/35% 76 23 2014 15,694,851 10,289,244 5,405,607 66%/34% 64 18 Total 66,265,956 34,851,225 31,414,731 53%/47% (avg) Top Six Donor Partnerships – 2010-2014 Name of Donor Amount of Contribution (USD Millions) Weight (%) GEF 7.2 29.4 Multi-Donor Trust FundOffice 4.112 16.8 Japan 2.176 8.9 Norway 2.104 8.6 Government ofUganda 1.710 7 Millennium Promise Alliance 1.690 6.9 African National C ongress 1.381 5.6 DFID 1.25 5.1 COMESA 1.184 4.8 Denmark 1.107 4.5 IRISH AID 0.6 2.4 Grand Total (all 11) 24.5 100
- 26. 26 Funding gap At the design of the CPD 2016-2020 resources from TRAC and non TRAC are planned to be mobilized for its implementation. As indicated in the Resource Mobilization Outlook 2016-2020 above, a total of US$141,497,000 (US$48,197,000 core and US$93,000,000 non- core) is to be mobilized. The sustainable, inclusive economic development portfolio has the largest share of the budget (73%) with a planned US$ 102,700,000 envelope followed by the inclusive, effective governance portfolio (16%) at US$ 23,000,000 and crises prevention and recovery at US$ 15,500,000 (11%). To date, US$7,161,455 has been mobilized under Outcome Area 1, leaving an overall gap of US$134,335,545. This means there is a US$ 73,838,545 shortfall under Outcome Area 1 (sustainable, inclusive economic development), US$7,000,000 under Outcome Area 2 and US$ 5,000,000 under Outcome Area 5. 10,699,206 1,666,756 754,935 520,716 383,272249,805 174,453 172,177 125,000 49,962 UNDP CO 2014 Top Budget Sources UNDP Regular Resources Global Environment Fund Government of Japan Government of Denmark United Nations Enviroment Programme Government of Sweden UNDP as Administative Agent for a Joint programme Pass Through Arrangement European Economic Community Government of Germany Enhanced Integrated Framework for Trade related Technical Assistance to LDC's Trust Fund manager
- 27. 27 Estimated TRAC vs. Total Planned Mobilization 2016-2020 (average)31 Currently UNDP is faced with a double funding challenge. Firstly, total funding has declined since its peak in 2008 before the financial crisis. Secondly, the share of core resources has fallen to 19 % in 2013, which risks undermining the strategic priorities and fragmenting the work of UNDP and over time impacting its ability to effectively undertake long-term planning and prioritisation.32 Additionally, starting in 2015 going forward there will be a reduction in core resource allocation with the traditional core contributors preferring to fund specific thematic programmes. Furthermore, a higher volatility in non-core contributions is to be expected in the future since some 90 per cent of non-core funding remains primarily single-donor and programme-or project- specific. However, in accordance with the relevant financial rules and regulations, non-core funding relating to multi-year programmes or projects must be secured in advance in the form of formal funding agreements, even though actual cash payments can generally be made in instalments. This in fact adds a considerable degree of predictability and stability at the level of the specific programme or project once the non-core funding agreements have been concluded. 31 Based on the average of total TRAC 2016-2020 ($48,200m) and total to be mobilized ( $93,000m) 32 DANIDA “Strategy for Denmark’s Engagement with the United nations Development Programme 2014-2018”, May 2014, p2 0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 20,000,000 2016 2017 2018 2019 2020 Estimated TRAC 9,640,000 9,640,000 9,640,000 9,640,000 9,640,000 To be mobilized 18,600,000 18,600,000 18,600,000 18,600,000 18,600,000 US$Millions Estimated TRAC To be mobilized
- 28. 28 Resource Mobilization Strategy In order to successfully achieve the programme objectives set out in the new Country Programme Document 2016-2020, the Country Office will focus on achieving transformative change with clear linkages to sub-national and national levels. There will also be an emphasis on South-South and Triangular Cooperation, national leadership development and a paradigm shift from a “projects” to “portfolio” based approach supported by development solution teams. This will entail a portfolio of programmes and projects that are: a. Focused on 4 SP outcomes & clear target groups; b. Planned using evidence and clear theories of change; c. Linked across thematic areas – multidimensional; d. Designed from start to maximize scale and sustainability; e. Driven by active use of M&E data; f. Partnership to increase chances of success; g. Meaningful participation of all target groups in programme Flagships In order for UNDP Uganda to successfully mobilize the increased resources required to carry out the implementation of the new CPD 2016-2020, the Country Office will need to develop flagship programmes to identify high impact opportunities that will catalyze change and prompt innovation. High-impact opportunities should be based on their significance and ability to make an immediate impact towards reaching the objectives of NDP II, CPD 2016-2020, UNDAP 2016-2020 while positively contributing towards the outcomes of Uganda’s Vision 2040. The number of Flagships should be selected for their high impact and profile and particular attention must be given to the formulation of the Flagships. Focus should be on how to formulate one to two maximum strong programmes around the outcomes of a given Result Area. Using outcomes for programme formulation allow a clear definition of programmes components and the complementarity role of involved sections/units. That shared process would allow for joint ownership of the programme by sections and facilitate joint resource mobilization. One UN Fund While the DaO in Uganda has yet to fully operationalize the 1 UN Fund, this is another key resource mobilization tool which UNDP can take advantage of in the next Country Programme 2016-2020. One UN Funds are multi-donor trust funds that were established specifically to support the delivering-as-one pilot initiatives by providing principally un-earmarked resources to
- 29. 29 cover funding gaps in One United Nations Programmes. One UN Funds represent an innovation to support system-wide coherence of the work of the United Nations development system at the country level. Establishment of the One Fund has proved to be critical and central in the Delivering as One architecture as it has been an effective catalyst for change as well as enhancing coordination for the implementation of a coherent UNDAP in an effective and efficient manner. The One UN Fund aims to: • Streamline the management of donor contributions to UNDAP; • Provide for joint UN-Government ownership and leadership; • Ensure a greater strategic focus on key results areas; • Facilitate continued programmatic focus and inclusiveness; • Ensure the effective application of performance based funding; • Lower transaction costs with donors and Government and eliminate competition for funding; • Allow better long-term planning and funding predictability; • Foster greater administrative and reporting harmonization. Conclusion Realize the importance of resource mobilization in an environment of competition, increasing demands and shrinking resources; UNDP needs to have a clear vision and articulate a good mission statement and strategic objectives; it is the responsibility of UNDP to create awareness and understanding of its mandate through activism, engagement of the Country Director/Resident Coordinator and other development partners; Constantly explore, identify and pursue opportunities; the senior management team must lead from the front, not leaving resource mobilization solely to specific units teams; research where the decisions are made and deal with that level in the donor’s organizational structure; reach out to and cultivate relationships with actual decision makers and influencers; Maintain the relationship with existing and potential donor; stewardship is key; keeping the relationship personal and at a high level is equally important; Understand the factors affecting donor behaviour and conduct regarding resource mobilization (auditors, lobbies, lobbyists, aid efficiency agenda, pressures from parliamentarians, civil society, NGOs, media, social media activism, etc.);
- 30. 30 Adjust the jargon and products developed for government donors to messages intelligible to the outside world when dealing with non-government donors; make them accessible and convey the messages of UNDP in a meaningful way; Donors insist on greater transparency and accountability, efficiency and effectiveness in the use of resources, and at the same time, they want visibility, identity and attribution for themselves; More demands on reporting and greater restrictions on the use of resources are the order of the day; collecting and organizing information and data in such a way as to be able to respond promptly to such demands is key; Demonstrate performance first, market the organization later: performance, efficiency and effectiveness are key; donors seek out organizations with a proven track record; Improve the way results are measured and reported on; UNDP may have good results, but if it cannot articulate them in a way that donors understand them, its message will not reach the donors; Improve the marketing and “branding” of UNDP; show that the organization is a good investment, provides value for money, does good work and achieves this through delivery, accountability, increased oversight, increased operations in the field, and a decrease in overhead costs; Deliver timely and up-front information; donors do not want surprises; hearing about a suspicion or an allegation from the organization first is preferable to learning it from the media or any other third party.