Enhanced Impact of Public Financial Management on National and Sub-national Employment Governance

The government of Uganda recognises unemployment, poverty and inequality as intertwined challenges facing Ugandans in their journey to achieve the 2040 National Vision. In its 3rd five-year National Development Plan 2020/21- 2024/2025, which aims at taking the country to middle-income status, government has set key development results, including the promotion of equitable growth; raising GDP per capita to USD 1,301; reduction of youth unemployment to 6.6 percent; and reduction of the proportion of people living in poverty to 15.5 percent. As part of the steps to improve service delivery at sub-national levels, Uganda is implementing a comprehensive Public Finance Management (PFM) Reform Strategy 2018-2023 that acknowledges several financial management challenges and presents recommendations to address them. The new PFM reforms strategy ushers in a results-based approach to fix the gaps that have hampered the established PFM systems' potential to deepen service delivery efficiently and effectively. According the Employment Diagnostics Analysis (2018), despite decades of economic growth, there has not been a sufficient creation of gainful employment for the rapidly growing population. Insufficient creation of quality and lucrative jobs in the economy, especially for the youth, coupled with non-availability of decent and productive income opportunities has led to rural-urban migration, a surge in the informal economy, and engagement of labour in low productivity work. The Action on Enhancing the Impact of PFM on National and Sub-national Employment Governance is consistent with government's overarching national development objectives of increasing the productivity and social wellbeing of the population; strengthening the role of the state in guiding and facilitating development; and strengthening the private sector to create jobs. Effective employment governance will support Government efforts in a number of its national development programs linked to human resource development for increased competitiveness and better quality of life for all, and increased public sector response to the private sector to drive equitable employment-intensive growth in target sectors Within the context of the EU's Fiscal Decentralisation and Service Delivery program, this action will contribute towards the following development results: Program impact: Achieved progress towards Sustainable Development Goal (SDG) 8: Promote inclusive and sustainable economic growth, employment and decent work for all. The project has two intermediary Outcomes as follows: Intermediary Outcome 1: Pre-conditions for Local Government Employment Governance are established Intermediary Outcome 2: Capacities at National and Local Government levels are strengthened in Implementation of Employment-sensitive Public Financial Management Tools The project outcomes are: Government to integrate pro-employment indicators in cross-cutting performance measures for LGAP Assessment. Government to adopt and implement the National Employment Strategy resulting from this action. General PFM reform mechanisms and procedures are properly adopted at the local level, and Government to integrate pro-employment guidelines in fiscal decentralisation. The final beneficiaries of the public financial management for employment governance Actionare all people at working age in who need decent and productive income opportunities. These include unemployed and underemployed young women and men seeking gainful employment, and the active poor in employment who need to transition into higher productivity employment. Sustainability of the project shall be achieved by working through existing and legally mandated institutions for their outputs.For example, for the Labour Force Survey through UBOS and for the National Emplyment Strategy via the Ministry with the legal charge of developing it; and on sub-national employment governance through Districts/Municipalities mandated.

Project symbol

UGA/20/01/EUR

Admin unit

CO-Dar es Salaam

Start date

01/01/2021

End date

31/08/2023

Total allocation

1194743

Total expenditure

Status

Closed

1088583

Development Partners

European Commission, DG for International Cooperation, European Development Fund

Country/Countries

Uganda

Outcomes

Outcome 3: Full and productive employment for just transitions