Uganda is taking decisive steps to secure its financial future with the unveiling of a comprehensive new Public Financial Management (PFM) reform strategy. This initiative places domestic resource mobilization at the absolute core of the nation's ambitious growth agenda and its pursuit of Vision 2040.
With external aid experiencing a global decline, the government's focus is clear: every shilling counts. Ramathan Ggoobi, the Permanent Secretary of the Ministry of Finance, Planning and Economic Development, emphasized the crucial need to strengthen revenue collection systems, formalize the informal sector, and leverage digital tools. Despite a growing economy, Uganda's tax-to-GDP ratios have remained stagnant, underscoring the urgency of this new approach.
Investing in a Sustainable Future
This extensive strategy comes with an estimated total cost of approximately $300 million. The Ugandan government is committed to providing about $126 million, and significant commitments have already been secured from international partners. Notably, the World Bank and KfW, under the "Uganda Strengthening Public Investment and Asset Management for Growth Resilience" program, have pledged around $97 million.
The strategy is designed to explore every possible avenue to accelerate the provision of services in key sectors. This will be achieved by fostering enhanced accountability demands with a strong, results-driven focus. A key lesson learned that informed this strategy is the critical need to deepen the role of PFM in domestic resource mobilization.
Reshaping Government Operations for Efficiency
Beyond simply strengthening the revenue system, these reforms are fundamentally reshaping how the government operates. This includes automating payments and procurement processes, cutting costs, and reducing fraud. Officials have observed that local governments are now better equipped for planning and budgeting. Furthermore, Small and Medium-sized Enterprises (SMEs) are benefiting from faster payments and easier access to tenders through e-procurement, streamlining business interactions with the government.
The Challenge of Translating Gains into Tangible Services
However, the primary challenge remains translating these administrative and financial gains into tangible improvements in services on the ground. It's a sobering reality that 16 out of the 20 largest global development partners are currently reducing their funding assistance worldwide. Therefore, strengthening PFM systems will be essential to maximize the impact of limited domestic resources and sustain Uganda's development progress.
Officials acknowledge that this strategy "does not promise sweeping, dramatic reforms." Instead, it represents a mature outlook, focusing on implementation and embedding reforms into existing systems. The ultimate success of this ambitious strategy, they emphasize, hinges on transforming these bold reforms into real-world impact, effectively boosting revenue, significantly improving service delivery, and ultimately restoring public trust.