Remarks at the Public Launch and Dissemination of the Public Investment Financing Strategy (PIFS)

Hon. Amos Lugoloobi, Minister of State for Finance and Planning

The Chairperson, National Planning Authority

The Permanent Secretary and Secretary to the Treasury, 

Members of the Diplomatic Corps

Heads of Government Agencies and Departments,

Leaders of the Private Sector Organizations,

Representatives from the Academia,

Representatives from Civil Society and the Media,

Colleagues from the United Nations System,

Distinguished guests,

Ladies and Gentlemen,

All protocols observed

On behalf of the entire United Nations System in Uganda, I am very pleased to participate in the launch of the Public Investment Financing Strategy (PIFS). The Strategy, which is the third of five blocks of the Integrated National Financing Framework, partly actualizes the means of implementation for the Sustainable Development Goals (SDGs) as agreed upon by world leaders in the Addis Ababa Action Agenda on Financing for Development. It is also a basis to build a multi-stakeholder approach to strengthening coherence across financing policies and institutions, both state and non-state.

I wish to commend the Ministry of Finance, Planning and Economic Development (MFPED), for its political and technical leadership in driving the process for the Integrated National Financing Framework (INFF) in Uganda. I must recognise that Uganda was one of the very first countries to officially commit its readiness to implement the INFF concept as a tool for mobilisation of resources for the country’s sustainable development agenda. This happened at the 74th Session of the UN General Assembly in 2019.

I also extend my appreciation to UNDP, for being our reliable lead technical agency in supporting the implementation of the INFF in Uganda.

The financial and technical contribution of UN’s global partners, the European Union (EU), the Organisation for Economic Co-operation and Development (OECD), and the Governments of Italy and Sweden, through the INFF Facility that was set up to enable this process, is also acknowledged.

Just like in many other low-income countries, the multiple shocks that arose from political conflicts, disease outbreaks and climate-related disasters, have underscored the need to reflect further and transform our approaches to development financing. At the same time, prospects of a significant and rapid decline in traditional forms of finance, such as ODA, are high. These challenges have exacerbated liquidity issues, increased budget deficits and magnified vulnerability to debt distress. These emerging trends have increased the relevance of integrated national financing frameworks to guide resource allocation and shape financing for sustainable development.

The 5th UN Conference on the Least Developed Countries (LDC5) that was held this month in Doha reemphasized the crucial need for the LDCs to revisit their approaches to development financing, without which development objectives may not be attained. For Uganda’s case, various distinguished speakers have alluded to the different issues that will need to be addressed as we move towards the implementation phase of the strategy and the integrated approach to financing, but allow me to add a few ideas to this conversation:

1. Many of the proposals in the PIFS are new to Uganda, but they have been implemented elsewhere, including in other developing countries. Hence, the successful implementation of the strategy will require investment in capacity building and peer-to-peer learning through South-South and Triangular Cooperation. The UN remains available to support these learning initiatives through our technical agencies.
2. Government has done a commendable job towards strengthening tax policy and administration through the Domestic Revenue Mobilisation Strategy (DRMS). However, there have been reservations with regards to tax incentives. Whereas this approach has been used in many developing countries as a bait to attract foreign direct investment (FDI), there have been concerns around the transparency and effectiveness of tax holidays and tax exemptions. Tax holidays and exemptions should not be seen as an alternative to creation of an enabling business climate, which is a more valued incentive for attracting FDI. We need to focus more on addressing the basic energy and transport infrastructure gaps, reducing the bureaucracy and cost of administrative requirements, and strengthening the rule of law in business and contractual processes. If the tax incentives must be maintained, they must be kept at the lowest levels and restructured to ensure transparency and fairness in their implementation.   
3. With public debt growing towards unsustainable levels, and the limit to how much we can mobilise domestically, the country needs to complement these traditional sources by policy and institutional reforms that are relevant for the emerging financing landscape. Public-Private Partnerships, (PPPs), philanthropy, climate finance, bonds, Islamic finance, among others, will all need enabling laws, policies and institutions. I am glad that the Strategy has already identified some of the necessary reforms, but their eventual implementation will require stronger coordination for results.
4. Mobilisation of development financing is as important as ensuring efficiency, effectiveness, and transparency in the utilisation of these resources at national and sub-national levels for achievement of development goals. Globally, UNICEF has been implementing the Open Budget Survey (OBS) covering budget transparency, public participation and oversight. As part of the UN’s support to the INFF process in Uganda, the UNICEF Country Office has expressed its readiness to collaborate with Government to promote budget transparency and effectiveness.
5. Lastly, in the Addis Ababa Action Agenda, the private sector was expected to assume a unique role in financing sustainable development. Yet, mobilisation of private sector financing for SDGs in low-income countries (LICs) and least developed countries (LDCs), which are most in need, is just about 12 percent of the potential compared to 48 percent in upper-middle-income countries.[1] To accelerate the pace and scale of development financing through the private sector, a more proactive private sector engagement approach based on jointly defined results will be required. Presently, there has not been adequate engagement with the private sector on matters of development and sustainability beyond traditional business discussions.

Dear Distinguished Participants,

The launch of the Public Investment Financing Strategy (PIFS) is just the beginning of a long journey that will require complementary efforts from all stakeholders. The UN system in Uganda reiterates its commitment to collaborate with the Government and other stakeholders to improve the financing mechanisms for the Uganda Vision 2040 and the the Third National Development Plan (NDPIII).

        Thank you.

[1] https://www.oecd.org/dac/financing-sustainable-development/blended-finance-principles/Making-private-finance-work-for-the-SDGs.pdf