The PRSP process in Uganda

by Zie Gariyo, Coordinator, Uganda Debt Network

October, 2001.

Debt Relief and PRSPs in Africa

Sub-Saharan Africa has been subjected to structural adjustment programmes of the IMF and the World Bank since the early 1980s. These programmes were meant to reorient African economies to the market. However, even a casual observation shows that, twenty years later, these economies are far from being wholly market-oriented.

The BWIs have acknowledged that Africa is an economic backwater and a basket case that is currently incapable of participating beneficially in global finance. In a recent report the World Bank concedes that:

Instead, most countries of Sub-Saharan Africa have acquired an unsustainable debt burden. In 1985, the external debts of the region stood at $95 billion. By 1998 this sum had reached a phenomenal $208 billion. In response to the resultant crisis, the World Bank and the IMF in 1996 succumbed to international pressure to grant debt relief to poor Third World countries – many of them in Africa – with the HIPC initiative. Three years later, as a result of further intense lobbying from civil society to make debt relief more meaningful, a so-called "enhanced HIPC" was announced to make debt relief faster, broader and deeper.

International non-governmental organizations, some Third World governments, and other international development agencies have continued to charge that the HIPC scheme is too narrow and inadequate to solve the debt problem of poor countries. Confirming these views, a report to the US Congress states that:

To reverse the economic downturn of most poor Third World countries, the IMF in 1999 renamed the much-discredited Enhanced Structural Adjustment Facility (ESAF) as the Poverty Reduction and Growth Facility (PRGF). In the words of the IMF, this new approach is "results oriented, focusing on the outcomes that would benefit the poor".

At the same time as enhancing HIPC in September 1999, the Board of Governors of the IMF and the World Bank also approved the introduction of the PRSP as the basis on which poor countries would receive the increased debt relief. An aid recipient country is required to prepare a PRSP before it can access financial support from the BWIs. The PRSP provides a framework for IMF lending and the World Bank’s Country Assistance Strategy (CAS). The CAS covers the Bank’s medium-term business plan and its proposed lending operations.

The PRSP outlines how a country plans to utilize debt savings in order to eradicate poverty. In terms of general principles, the document articulates the government’s commitment to poverty reduction. It focuses the priority of public action on reducing poverty. The PRSP also sets out the main elements of the government’s poverty reduction strategy. Mainly, the macroeconomic framework and policy matrix focuses on reducing poverty through faster economic growth. The PRSP also asserts the government’s commitment to developing poverty reduction policies through a consultative process.

More specifically, a comprehensive PRSP includes poverty diagnostics based on good indicators of poverty and its reduction. It also presents a shared communal vision of desired poverty reduction goals, reached through a participatory process. And it lays out participatory processes to monitor policy implementation and progress in poverty reduction.

As the preceding remarks suggest, governments are enjoined to formulate PRSPs in a participatory manner, involving consultations with other stakeholders including CSOs as partners in development. The BWIs have conceded that economic recovery for poor Third World countries cannot take place unless civil societies in the respective countries are involved in the policy making process, including in particular how macroeconomic policies are formulated and implemented. Thus one of the central features of the PRSP is the requirement that civil society should participate. According to the IMF, the PRSP is "country-driven and owned, based on broad based participatory processes for formulation, implementation and outcome based progress monitoring"; it is "partnership oriented".

The prescription of partnership between government and civil society in the PRSP process is novel. The majority of Third World states have never regarded civil society as a stakeholder. Yet the insistence by the IMF and the World Bank on civil society participation could in fact worsen the situation. Countries could be denied access to much-needed aid resources if they fail to build a government-civil society partnership. Alternatively, governments could be encouraged to coerce their civil societies into endorsing the country’s PRSP in situations where there has been no dialogue. As the previously cited official report to the US Congress states:

All other countries that are engaged in formulating a PRSP should heed this observation. Uganda’s advantage was that the formulation of the country’s PRSP coincided with the revision of its Poverty Eradication Action Plan (PEAP). Uganda was not starting from scratch. Even here, it took over two months from December 1999 to the end of January 2000 to get government, donors and civil society to agree on the conceptual framework. In most countries, where there is no prior dialogue between civil society and government, the possibility of even discussing the outline of such a conceptual framework remains remote.

The demand that civil society should engage government and multilateral financial institutions is neither an innovation nor a change of heart on the part of the BWIs. Their rhetoric on civil society participation cannot be taken for granted, as some studies have shown. In fact the Bank and the Fund have with the PRSP turned a genuine demand by civil society on its head. Instead of allowing civil society in Sub-Saharan Africa to set the conditions of engagement with their governments, the BWIs’ intervention may have disastrous consequences. Civil society is demanding participation in a broad process of dialogue with donors and governments, but the IMF and the World Bank are only interested in preparing a PRSP as an end in itself. They are using these mechanisms as a carrot and stick to restructure the financial regime in Africa. Whether they will succeed remains to be seen.

Thus in most African countries there is resistance by both governments and civil societies to the formulation of PRSPs. For example, a Government of Kenya delegation that paid a visit to the offices of Uganda Debt Network to discuss civil society involvement and learn from the Uganda experience remarked – after a lengthy explanation about the extent of civil society engagement – that civil society could be anti-government. In Kenya it was unheard of for the state to give free reign to civil society organizations to mobilize and engage the government in policy design and planning. The delegation implied that the inclusion of grassroots community people in the Uganda PRSP consultations was tantamount to undermining the state. Other critics have described IMF involvement in the PRSP process as a usurpation of the power of the governments of the countries concerned. On this diagnosis "in many ways, participation in PRSPs is engineering consent for structural adjustment policies."

2. The PEAP/PRSP in Uganda

Preparation of the PRSP for Uganda occurred in January-April 2000. The consultation process had several dimensions: (a) consultations between government and donors; (b) consultations between government and civil society; and (c) consultations within civil society. The Executives Boards of the World Bank and the IMF approved the Uganda PRSP in May 2000.

The formulation of the PRSP coincided with the Government of Uganda’s revision of its Poverty Eradication Action Plan. Eventually the donors accepted the revised PEAP as the PRSP for Uganda. The PEAP is a broad policy framework paper formulated in 1997 for the elimination of poverty in Uganda. Since that time, Poverty Priority Areas (PPAs) have been selected and budget resources have been mobilized for these places.

The government made sure that research findings from various institutions were incorporated into the PEAP review process. Particularly important in this regard were materials from the Uganda Participatory Poverty Assessment Project (UPPAP) of the Ministry of Finance, Planning and Economic Development (MFPED). This participatory project was established to collect data and information from poor people regarding their own perceptions and definitions of poverty. Such inputs widened the scope and definition of poverty and broadened ownership of the PEAP. Other research bodies such as the Makerere Institute of Social Research (MISR) and the Economic Policy Research Centre (EPRC), also based at Makerere University, were actively involved in the analysis and compilation of the PEAP.

The Government set up a technical team that worked around the clock to produce drafts at very high speed. The first draft PEAP in February was a mere seventy pages. By mid-March the number of pages had more than doubled. The final draft in April was more than 200 pages long. Government officials faced intermittent pressure from IMF and World Bank staff to produce a draft PRSP in a period of only three months, so as to present it to their Executive Boards in April-May 2000.

The revised PEAP is a very comprehensive document compared to the earlier version. It identifies the critical poverty areas and prescribes the means for its eradication. In broad terms, the plan focuses on: (a) creating an enabling environment for sustainable economic growth and transformation; (b) promoting good governance and security; (c) raising the incomes of the poor; and (d) improving the quality of life of the poor.

The Uganda PEAP was then turned around and redrafted to become the country’s PRSP. One is struck by the difference in language between the two documents. The PEAP was rewritten to make it look more acceptable to IMF and World Bank officials instead of the plain language in which it was originally composed. The revised version was presented to the Donor Consultative Group (CG) meetings that were held in Kampala in March 2000 and became the Uganda PRSP. However, the document that is recognized officially in Uganda is the PEAP, and it is the basis on which donors provide aid to the Government of Uganda.

Sceptics have suggested that the PRSP process might not yield anything new, merely reproducing previous perspectives along the economic growth model espoused by the IMF and the World Bank. Indeed, reading through the Uganda PRSP one notices that nothing much has changed. The economic growth model still heavily underpins the PEAP and the PRSP.

With the approval of its PRSP, Uganda was able to access debt relief under HIPC II, becoming the first beneficiary of the Enhanced HIPC Debt Relief Initiative. To this effect, the country obtained approximately $46 million in the Financial Year 2000/01. Relief is projected to increase to $55 million in each of the Financial Years 2001/2 and 2002/3. Taken together, the HIPC I and HIPC II debt relief initiatives are producing savings of approximately $90 million annually on Uganda’s repayments of foreign debts. All the savings from debt relief are being committed to poverty eradication through the Poverty Action Fund (PAF), a Government of Uganda mechanism for mobilizing savings from debt relief and donors to finance poverty priority areas identified in the PEAP. Through the PAF donors have almost doubled their contribution to poverty programmes in the financial year 2000/2001.

3. Civil Society Participation in the PEAP/PRSP Process

In December 1999 Government of Uganda decided to revise the Poverty Eradication Action Plan and to formulate its Poverty Reduction Strategy Paper as a precondition to qualify for debt relief. The government also decided to open the process widely and allow CSOs to participate in the exercise. Civil society involvement began in December 1999, when the MFPED invited representatives of CSOs to a consultative meeting to discuss the process of revising the PEAP. In January 2000, CSOs organized a consultative meeting with government and World Bank officials. Over 45 CSOs attended, and a Civil Society Task Force was formed with a mandate to organize an all-inclusive consultation process involving as many sections of the Uganda civil society as possible.

The Task Force was composed of representatives of international and national NGOs operating in Uganda. The international NGOs included Oxfam (UK), Action Aid (UK), VECO Uganda (Belgium), SNV (Dutch), and MS Uganda (Denmark). The Uganda NGOs included Action For Development (ACFODE), the Uganda Women’s Network (UWONET), and research institutions such as the Centre for Basic Research and MISR. The Uganda chapter of the Forum for Women Educationalists (FAWE), a regional NGO based in Kampala, also joined the Task Force. Later World Vision International and the Catholic Medical Bureau were co-opted as Task Force members.

The Uganda Debt Network (UDN) became the lead agency for civil society participation in the PEAP/PRSP process. The UDN is an advocacy and lobbying coalition of NGOs (both local and international), academic, research and religious institutions, and individuals. It was formed in 1996, primarily to campaign for debt relief under the HIPC Initiative. The UDN was also the lead organization in Uganda for the Jubilee 2000 campaign for total cancellation of unpayable debts of poor countries. Through these campaigns the UDN engaged government and donors and lobbied to ensure that savings from debt relief are spent on poverty eradication programmes, especially in the areas of education and health. Today the network has more than 66 members.

Uganda CSOs recognized that, in spite of their lack of capacity and the short time available for preparing the PRSP, there were benefits from participation and such an opportunity should not be dismissed. CSOs followed the government example and set up their own technical team to speed up consultations with ministry officials. This step proved very decisive in raising the profile of the CSOs and accelerating the pace of their participation.

CSOs mobilized representatives of their constituents through various forums and engaged them in discussions to solicit their inputs into the PEAP/PRSP. The Civil Society Task Force for the revision of the PEAP and formulation of PRSP carried out numerous consultations with grassroots people to collect their views on poverty reduction. It organized numerous workshops, seminars, radio and television discussions. However, the highlight of these consultations were the 2.5-day workshops at which community representatives were invited to discuss the draft PEAP documents. The Task Force organized eight zonal meetings (where each zone encompassed 4–7 districts), which together involved over 644 participants (405 male and 239 female). The UDN used its grassroots campaign experience in the Jubilee 2000 campaign to identify focal points that would mobilize the participants.

It was decided that the meetings should be as inclusive as possible, involving men, people with disabilities, women, youth, elderly people, religious leaders and community leaders. However, to make it a truly civil society input, the invitation excluded local government officials and local political leaders. The MFPED organized consultations with these circles.

The Civil Society Task Force also organized a media campaign such as radio and television phone-in programmes at which government officials were invited to respond to queries from the public and to explain the PRSP process. The Task Force also published information in the media to guide the consultations and invited the general public to make their contribution. Over 40,000 copies of a newspaper pull out and 10,000 copies of a policy brief were published and circulated to the public.

Other civil society consultations were held in addition to those organized by the Task Force. This was partly because the Task Force had little time to mobilize extensively for the participation of all civil society organizations. Moreover, participation was voluntary, requiring commitment and sacrifice from those involved. Initiative from outside the Task Force was considered a source of dynamism and contributed to the success of the consultations. So the Task Force encouraged its members and other development actors to hold consultations and present findings to the Technical Team for incorporation into the civil society memorandum to government.

In this vein, Oxfam organized a consultation for over 40 NGOs and community-based organizations involved in rural water and the improvement of sanitation. DENIVA, the umbrella body of indigenous associations in Uganda, organized a consultation with over fifteen of its members in two districts in North East Uganda. MS Uganda, the Danish NGO, organized and obtained reports from consultations with over 135 community representatives in the West Nile region in North West Uganda.

Furthermore, the Task Force organized consultations with special interest groups, such as those engaged in conflict resolution, environmental issues, and others. Other CSOs such as trade unions – through the National Union of Trade Unions (NOTU) – and the Uganda National Students Association (UNSA) were invited to attend the initial meetings, but they did not actively participate in the consultations. The Uganda National Farmers Association (UNFA) did not organize consultations with its large constituency, although the Task Force encouraged it to do so.

Findings from these civil society consultations were presented to the Technical Committee of the Ministry of Finance, Planning and Economic Development, which was responsible for the drafting of the PEAP document. This committee in turn incorporated as much of the inputs as possible into the PEAP draft. This process saw the first draft document grow from just seventy pages in February 2000 to over two hundred pages by the end of the exercise in March.

The significant point to note is that civil society inputs were sometimes wholly incorporated into the draft. For instance, government incorporated the whole section on participation and monitoring written by civil society. In the first draft, the issue of employment was not seriously discussed. After a seminar organized by the Task Force, at which the government was criticized for ignoring the issue, employment was given much more attention. However, the government appreciated civil society inputs to get specific areas of interest clarified and others prominently articulated, thus improving the quality of the entire PEAP.

The Uganda experience of civil society participation in the preparation of a PRSP shows that government commitment to these consultations is essential. In spite of the strict guidelines that civil society participation in the formulation of a country’s PRSP is essential, most governments in Africa are not yet ready to accept CSOs as serious stakeholders in policy planning. The Government of Uganda ensured that CSOs were given enough space in the PEAP/PRSP process by organizing independent consultations and incorporating as much of the their inputs into the documents as possible. This was a very important milestone in changing government-civil society relationships in Africa.

The Government of Uganda provided as much information as required by the CSOs. It also made available the draft PEAP/PRSP for circulation. This document was synthesized, and a four-page summary was produced to guide the facilitators of the consultation workshops. The government furthermore allowed CSOs to attend as full members the meetings of the National Task Force (NTF) comprised of senior government officials. The civil society technical team was also in close and continuous contact with the government technical team, composed of senior technocrats and consultants responsible for compiling the PEAP report. These officials were charged with receiving and reviewing all the inputs from the various stakeholders and incorporating them into the PEAP/PRSP.

Moreover, the government did not dictate the agenda of the CSOs in the PEAP/PRSP consultations, nor the methodology to be used in CSO consultations with community people. The Government of Uganda has recognized civil society as a partner in the development process of the country. The authorities have increasingly widened the space for civil society participation. The Planning Ministry, the lead government agency in these matters, took it upon itself to ensure that CSOs were regularly represented at the table in the PEAP/PRSP process.

Nevertheless, Uganda CSOs felt left out of the later stages of the process, when they were excluded from the discussions that turned the Uganda PEAP into the PRSP that was presented to the IMF/World Bank Executive Boards. Although there were numerous contacts with government officials at all stages in the preparation of the PEAP, there were fewer contacts with donors and more specifically the IMF and the World Bank missions in the preparation of the IMF version of the PRSP document. The few meetings that took place between the missions and CSOs were almost like verification meetings to find out the level of civil society participation and the quality of inputs. Members of the Task Force met with various World Bank missions and a mission from the US State Department, but these discussions were more general.

4. Civil Society and the PEAP/PRSP: Opportunities and Challenges

Limited capacities notwithstanding, Uganda CSOs faced the challenge of timely delivery of inputs, critical analysis of draft documents, and comprehensive consultations with all stakeholders and the production of materials that would be acceptable to the government technical team. These efforts had a number of positive results. Most of the inputs and recommendations by civil society were incorporated into the final PEAP report that was developed in March 2000.

For one thing, CSO inputs helped to build a consensus around poverty eradication as a priority issue. This consensus between government, civil society and donors did not exist before. Under the Uganda PEAP/PRSP, the bulk of the government budget will be focused on poverty eradication while maintaining high levels of economic growth. Growth will be assessed in terms of its effects in reducing the incidence of poverty. Expenditures for the Priority Poverty Areas (PPAs) will be ring fenced and will not suffer routine budgetary cuts or a diversion of funds when emergencies or unexpected expenditures occur. Nevertheless, whether this commitment is upheld will depend on the vigilance of civil society in monitoring budgetary expenditure.

In addition, civil society involvement in the PEAP/PRSP process made employment creation and the formulation of an employment policy a priority concern. In the initial drafts, government officials and donors were reluctant to emphasize employment issues. However, after serious debate led by CSOs, this issue now ranks high on the list of critical issues next to macroeconomic stability.

During the consultative workshops organized by government to discuss the cost of implementing the goals of the PEAP/PRSP, the issue of basket funding rather than project funding for budgetary support became a contentious issue. In the past most donors have tied their aid to project support. CSOs supported the proposal by government that budget support should be flexible in order to give government a bigger say in the allocation of expenditure for poverty eradication. This is necessary to enable government redirect over funded areas to less funded but equally critical and deserving areas. For instance, in Uganda donors have committed more money to the education sector (and primary education in particular) than to any other sector. So education has become overfunded with donor aid, while other equally critical areas such as agriculture and rural small-scale industry have not been similarly privileged. Although one appreciates the importance of education in poverty eradication, that goal involves a whole series of issues that must be tackled simultaneously and not one at a time.

Donors have now accepted a recommendation from the civil society consultations that aid should be provided in one basket, as part of the budgetary resources to be spent in the agreed priority areas of the PEAP. However, it remains to be seen whether they will fulfil their commitment. Donors are worried about the lack of effective accountability and continued reports about misuse of public resources by government officials. Hence donors are wont to tread cautiously, thereby delaying the implementation of key programmes. Nevertheless, civil society organizations expect that aid and budgetary resources such as taxes will be merged within the Medium Term Expenditure Framework.

Civil society involvement in formulating the PEAP/PRSP also had positive results in terms of future evaluation of the policies. CSOs and other stakeholders in Uganda will be heavily involved in the monitoring of poverty indicators. The government has committed itself to make all relevant information about public policies known to as many stakeholders as possible. The government will also seek to publicize budgetary policies and public expenditure reviews. In addition to this enhanced transparency, the government has committed itself to building institutional capacities for accountability. It will assist local governments to recruit competent staff to help them in accountability and planning.

As a starting point, the Uganda Debt Network is already involved in monitoring the Poverty Action Fund, a mechanism set up by Government of Uganda in 1998 to mobilize savings from debt relief and donors for spending in poverty priority areas. PAF resources are used for primary education, health, rural roads, agricultural extension services, micro-finance and HIV/AIDS programmes. Poverty Action Fund Monitoring Committees, composed of representatives selected by community people at the grassroots, have be set up to carry out continuous monitoring of the implementation of the programmes under the PAF.

However, along with the benefits CSO involvement in the formulation of the Uganda PRSP also had a number of problems. For example, during the process it was clear that most CSOs lacked staff capacity to engage donors and policy planners in meaningful dialogue about macroeconomic policy issues. This remains a problem at both national and local levels. In Uganda only a few CSOs have the capacity to influence policy planning. The others are not even aware that space is open for them to participate. As a result there is a danger that CSOs might endorse positions about which they have little knowledge.

Moreover, if the Government of Uganda had not deliberately encouraged the participation of CSOs, no input would have been delivered. In some cases government officials took the initiative to send drafts of the PEAP/PRSP documents to Task Force members for comments and inputs. In one case, a workshop organized by the Planning Ministry to discuss the draft PEAP was at their request co-facilitated by CSO representatives. In specific goal areas CSO representatives were asked to lead the discussions. These included: (a) improving the quality of life of the people; and (b) raising the incomes of the poor.

In addition, CSO representatives participated in all the discussions that took place either in plenary or in group discussions. Thus, it can be seen that, given the short time available to formulate a PRSP, CSOs are prepared to respond quickly. Moreover, in the case of Uganda, CSOs had participated in formulating the first PEAP in 1997, so they were familiar with the content of the documents. CSOs had also participated in a two-year project, the Uganda Participatory Poverty Assessment Project (UPPAP), which had extensively collected the views of poor people at the grassroots.

The Uganda experience shows that deliberate efforts are needed to first build the capacity of CSOs, especially the national organizations, if they are to have a greater impact on policy planning, implementation, monitoring and evaluation. Capacity building includes the recruitment of high-calibre, skilled and well-trained staff to implement some of the strategic programmes. Counterparts in government are well trained and knowledgeable in their fields of competence and have little patience for a slow pace on the part of CSOs. At local level CSOs need to build the capacity of grassroots people to monitor policy implementation. For its part, local government must develop transparent and accountable systems that enable grassroots communities to have access to the information they need to conduct effective monitoring.

Another challenge is to use CSO influence and achievements. CSO inputs should be mainstreamed into policy planning. Some government officials still regard CSO participation merely as an exercise to legitimize the government agenda. They still view criticism from CSOs with suspicion.

Furthermore, CSOs need to fully understand and analyze the donor agenda. Donors retain a strong influence over budgetary and other policy plans in Africa (and elsewhere in the Third World) because they contribute a large portion of the government budget. For instance, in the financial year 2000/2001 Uganda’s budget was dependent for 53 per cent on donors, including loans and grants, while the government contribution was only 47 per cent.

Civil society organizations in Uganda that participated in the formulation of the Uganda PRSP believe that there were good lessons to be learned and achievements to be used as a starting point for future engagements with government and donors. Relationships between civil society and government were put on a new footing. Several CSOs became part of the whole budget planning process and are now represented on Sector Working Groups such as the Macro Working Group and the Poverty Working Group. However, it was also noted that CSOs often lack the necessary skills and knowledge to engage government and donors and that CSOs neglected the engagement with donors.

5. The Future of African Civil Society Participation in the PRSPs

Whether civil society continues to play a significant role in future donor-government policy planning process remains to be seen. What is clear is that, for CSOs to effectively influence policies in Uganda and elsewhere in Africa, there must be a conducive policy environment. Thus to require that governments in Third World countries should prepare a participatory PRSP in a short time – also when such governments do not have respect for their own people’s views – is not realistic. The Government of Uganda was central to the participation of the CSOs and was anxious to have their inputs included in the PRSP.

Civil society participation in the formulation of the PRSP increases democratic ownership of the process. Increased ownership enhances policy implementation so that intended outcomes can be better realized. However, some civil society activists have opposed the timing of PRSPs. They argue that civil society participation is given only cursory attention. For instance, in reference to the Tanzania experience Charles Abugre has criticized the PRSP process thus:

Such actions undermine the essence of participation in the PRSP process and the paper itself, since the donors have already gone ahead to take care of their own interests in their lending mechanisms. The PRSP then becomes a dormant paper. Realistic participation is needed to ensure that the voices of the poor are heard and considered.

If taken seriously, the PRSP marks a fundamental departure from being a donor tool to a tool for evolving the principles of participation in eradicating poverty. It provides a framework for consultations with various stakeholders, including the poor themselves. CSO participation in the development of PRSPs increases the chances that the needs of the poor are considered.

Although civil society participates in the PRSP process, it faces the challenge of sustaining this policy involvement. Many CSOs lack the adequate capacity to engage in quality dialogues with stakeholders such as the donors and even the government itself. A lot has to be done to enhance the capacity of CSOs in the decision-making process. The future of the civil society participation in not only the PRSPs but also other development papers depends on initiatives to increase their capacity in the decision making process.

The future of participatory PRSPs also depends on how seriously the IMF and the World Bank take them. Stakeholder participation and the outcomes of consultations must be treated seriously not just in words but also in deeds, by making it truly reflect the concerns, demands and interests of the poor. It must have clearly set goals decided by the governments and people in poor countries. The Bretton Woods institutions should avoid imposing a PRSP, even an interim one, on any country as it undermines the credibility of such a document and will only perpetuate rather lessen aid conditionalities.