Daniel Lukwago
Planners are being challenged to adhere to public investment policies if the budgetary allocations are to deliver expected tangible results.
It is being realized that some of the projects with budgetary allocations in each financial year delay to take off and thereby defeating the intended purpose.
Planners are being challenged to adhere to public investment policies if the budgetary allocations are to deliver expected tangible results. It is being realized that some of the projects with budgetary allocations in each financial year delay to take off and thereby defeating the intended purpose.
The concern was raised by Daniel Lukwago, an Economist, Policy Analyst and Independent Consultant. He noted that too many projects are just stories—stalled due to lack of counterpart funding or poor planning.
“For example, buildings were approved during COVID along a planned road. Now they must be removed, raising costs and delaying implementation.” said Lukwago, also a Consultant with World Bank.
While Lukwago recognizes reforms by the ministry of finance to improve public investment management, he said the good plans have either remained on paper or been overtaken by projects that were not previously planned for or not approved by the development committee at the ministry of finance.
The Ministry of Finance has over the years pledged to strengthen Public Investment Management (PIM) for Increased Development Returns on Public Spending. This is aimed at establishing and embedding a comprehensive project cycle management approach across Government, focusing initially on selected key sectors.
As part of the reforms, a Development Committee was formed with in the ministry as a gatekeeper for new investment proposals. Projects Analysis and Public Investment Department (PAP) were also instituted to improve the quality of project preparation and appraisal.
“The process looks okay, the systems are there and on paper, we are doing very well. And some changes happened. But our usual problem is implementation,” said Lukwago.
Lukwago was speaking at a policy dialogue about the state of Uganda’s economy under the theme “Prudent Fiscal Management For effective pubic investment and attainment of ten-fold agenda 2040. The dialogue was hosted by Southern and Eastern Africa Trade, Information and Negotiations Institute (SEATINI).
“Many projects lack multi-year budgeting. Some are only funded for one year. Without proper counterpart funding, externally funded projects stall. That’s why last month, many construction projects were halted—government needed over two trillion.” he observed.
He said while some of the planned projects delay to takeoff, Ugandans continue to pay interest on loans approved by the parliament. This he said is the reason why more than a half of the coming financial year budget will be used to repay the external debt.
Lukwago observed that absorption of externally funded projects is very low at about 35%.
“That’s extremely low. Some projects approved in 2018 were supposed to be completed by 2022, but as of 2025, nothing has happened. That’s public money. That’s the real challenge,” he said.
“Our systems exist, but the problem is actualizing them. We need behavior change. In some countries I’ve visited, enforcement is serious. If you break the law, you pay. There is no confusion. Things are organized. That’s what we need here.”
Lukwago’s observation comes as the Finance Minister, Matia Kasaija prepares to read the 2025/2026 financial year budget. This year’s budget is estimated at 72.4 trillion shillings ($20 billion). The budget is targeting eighteen projects.
The theme for the new budget is “Full monetization of the Ugandan economy through commercial agriculture, industrialization, expanding and broadening services, digital transformation, and market access.”
According to IMF, Uganda has achieved significant improvements in public investment management (PIM) over the last few years.
It said as a result of the reform process, Uganda is now well ahead of its comparators in many aspects of PIM, in particular in institutional design – the formal framework for infrastructure investment.
“In the PIMA, Uganda receives high scores on institutional design for eight institutions: fiscal rules, national and sector planning, project appraisal, alternative infrastructure financing (the private sector, PPPs, and public corporations), budget comprehensiveness, project selection, procurement and portfolio monitoring.” Said one of the IMF reports on Uganda.
It however noted that many of the reforms are recent and are still not fully institutionalized. “The effectiveness of PIM is therefore lower than the institutional design. These remaining weaknesses have negative impacts on public investment access and quality.”
The report titled Uganda: Technical Report – Public Investment Management Assessment” noted that “Given that effectiveness is lagging considerably behind the institutional design, there is a clear need to continue and to further strengthen public investment management in Uganda”
It notes that project delays are still common, in particular for externally funded projects. “This is due to weak project planning and development practices, as well as the lack of a clear legal framework for resolving land use issues” said the report published in 2022.
“Given that effectiveness is lagging institutional design, there is a clear need to further strengthen PIM in Uganda. The high level of public investment and the plans for continued, rapid expansion of public infrastructure exacerbates the importance of effective and efficient investments”
The PIMA provides a set of recommendations that aim at consolidating the existing PIM reforms and rectifying the areas that have been lagging.
“In this context, it will be particularly important to improve medium-term budgeting of investments, to ensure adequate maintenance, and to make portfolio monitoring more proactive and forward-looking. It is also important to strengthen the legal framework.”
-URN
