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Code: ASS – 001 Author: Tom Dichter – International consultant and Ephraim Kamuntu – National consultant. Quantity: 1 Type: copy Status: 1/1
Introduction
Uganda is trying to act on what is now a worldwide ideological shift to the decentralization of government involvement in many sectors and a shift of motivation and responsibility for economic growth to the marketplace, with government keeping responsibility for security, and among other things, establishing and maintaining an enabling environment. Privatization is everywhere being proposed in Uganda and some donors are trying to respond by planning integrated efforts to support private sector development. But behind these changes there are implications which in some quarters may not have penetrated very deeply.
In Uganda, liberalization and financial stabilization are being achieved and are “here to stay”. Financial reforms are in progress, but the entire banking sector is in more or less the midst of struggling to comply with the new standards set in 1993 FIS act. In the next three to four years, the formal financial sector will necessarily be preoccupied with rebuilding and guarding its own health. In the process, a country which has been severely underbanked has recently become even more so. This situation has been sometimes referred to in our discussions as “the gap” in financial services.
Decentralization and shifting to the private sector by definition mean less power and less control at the top. Not just the planning functions but the actual “ownership” of at least some of the efforts to assist the private sector must themselves be in the hands of the private sector. Still, there seem to be some understandable tendencies in government and among some donors to want to have things both ways (e.g., decentralize while keeping central control, and help the private sector with public sector planning and coordination from the top.)
These tensions, however are to be expected and are being experienced nearly everywhere. In Uganda, a very poor and very vulnerable country with a troubled past, continuing to face insecurity in the North and North west, the stakes in decisions about policy and problem solutions, for government and for the donors (without which the country could not function) are unusually high. The result is that there is a great deal more pressure here than in many other countries to solve many big problems at once. Donors for their part, recognizing how much they are needed here, do want to respond. In general such a situation favors responses which are not well thought or given time to be tested.
