07 June 2016

Returns not matching govt investments - World Bank

Part of the Entebbe-Kampala Expressway under construction. According to the World Bank, such infrastructure projects are not delivering economic returns for the country. FILE PHOTO  

In Summary

Reforms. The bank wants institutions involved in coming up, implementing and supervising government projects strengthened.

Today, Mr Matia Kasaija, the Finance minister, is expected to deliver the Budget Speech for 2016/17, highlighting the continued focus on infrastructure projects in the works and energy sectors.

This focus, according to the World Bank, is showing signs that the country is not getting the returns from what has been invested.

Releasing the Uganda Economic Update, 7th edition, Ms Christina Malmberg Calvo, the World Bank country manager Uganda, revealed that the investments made in infrastructure are not translating into increased economic activity.

“Over the past decade, for every Shilling invested in the development of Uganda’s infrastructure, less than a shilling (only seven-tenths of a shilling) of economic activity has been generated. That is not good, and it will not translate into a transformed middle-income country anytime soon,” she said at the release of the report on Monday.

The scathing report titled “From budgets to smart returns: Unleashing the power of public investment management,” faults the government for the poor execution of infrastructure projects, right from inception to delivery of the project.

Uganda’s roads and energy sectors are expected to be awarded a combined 30 per cent of the Shs26.3 trillion Budget.

This is a trend that started in 2008/2009 financial year as the government revealed the need to stimulate the economy by having better infrastructure.
And indeed, the World Bank credits the government for attempting to plug the infrastructure deficit.

However, Ms Calvo points out that since this was meant to boost agricultural productivity and regional integration, the expected returns have been far from visible, a factor blamed on project initiation, tendering, implementation and maintenance among others.

“Endemic delays in implementation, cost overruns and corruption mean that sometimes projects come in at twice the original report. For example, a road project worth $100m could end up being delivered at $200m.

“This means that although the planning and budgeting process is doing a fair job in identifying the right projects that should transform the country and allocate resources to them, they are not efficiently implemented to deliver the expected benefits,” the report reads.

Recently, the Uganda National Roads Authority (UNRA) raised a red flag over cost overruns on a 9kms stretch between Busega and Kajjansi for the Kampala-Entebbe expressway, where the contractor will require Shs229 billion to complete.

The authority has also been embroiled in several corruption scandals that even led to a probe.

It is this corruption that Ms Cissy Kagaba, the executive director Anti-Corruption Coalition Uganda, says is responsible for the low returns on the infrastructure projects.


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