The Observer (Kampala)

Uganda: Kiwanuka, WB Decry Inequality

The growing gap between the haves and have-nots is partly because some people have given up work and are waiting for government cash handouts, Finance minister Maria Kiwanuka has said.

Speaking to journalists at Serena hotel recently, where the World Bank launched a book documenting its successes in Uganda over the past 50 years, Kiwanuka said:

"The basic unit of production is a household; the way to equality is not cash transfers; it's hard work. When the government works on a road, it is telling you to produce and take to the market."

She further explained: "We are aware there is so much to do; like improving the quality of education and fighting corruption."

Makhtar Diop, the World Bank's vice president for Africa, said the bank was concerned with the growing inequality in the country. The bank has offered money for roads, energy, education, agriculture, and trade. WB said up to $8bn (about Shs 20tn) - almost half of the current GDP - had been spent in Uganda over the last 50 years.

Diop said the WB's goal was now to drive inclusive growth and end extreme poverty.

"Government must invest heavily in productive areas like human capital that will have spillover effects to the poorest populace," Diop said.

Uganda's government has been accused of maintaining a bloated public expenditure, especially with the creation of new districts. The numbers of people living in absolute poverty -- less than $1.25 a day - has stagnated at 24.5 per cent since 2009, according to the WB. Among the WB's concerns is the quality of education.

"While access to education has improved, the quality has fallen. We note with concern that there is still a high level of absenteeism; teachers don't have access to training or retooling," Diop said.

The WB has also spent heavily in the energy sector; it supported the construction of the 250MW Bujagali project and the ongoing rural electrification programme. However, access to electricity in the country remains disappointingly low - only 14 per cent of the population has access to electricity, according to official figures.

With oil production expected to start in 2018, the government intends to use the revenue on energy. Meanwhile, Kiwanuka said the country was ready to audit oil revenues twice a year and present the audits to parliament twice a year as well.

Trust fund

The bank said it had formed a trust fund to help poor countries with inadequate capacities to negotiate oil contracts with powerful investors.

Diop said the fund would have top legal brains and other technocrats that would, on behalf of the poor countries like Uganda, help them scrutinize contracts and assess the risks therein before signing.

"The trust fund will ensure there is balance between the government and the investor. We will make sure governments understand what they are doing [before] appending the signatures on certain contracts," says Diop.

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