27 March 2018

Uganda: Sh250 Billion Fund to Lift Youth Out of Poverty

A business venture by a group of eleven youth in Katebe Village, Kamwenge district is thriving after they got a Shs 7.7 million interest free loan in 2015 from the Youth Livelihood Programme (YLP); a Shs 256 billion program intended to create jobs for youth and lift them out of poverty.

The members of Katebe Youth Produce Buying and Selling Project group buy farm produce from farmers during harvest, sell some and store the rest to fetch a higher price later. They have been able to pay back the loan in one year, bought a Canter truck at Shs 38m and were left with a capital base of Shs 25 million in cash and stock.

In Nsambya North Cell, Arua Municipality, another group also received Shs 7.4 million, paid it back and now have three acres of cassava worth Shs6 million and cash of Shs 500,000 in the bank.

The group says they initiated other projects, including a laundry service business which employs three people permanently with a monthly salary Shs 200,000 per person, gabbagecollection which employs 15 youth collectively earning Shs 1.3 million per month, and a hair salon project which also employs two people with a monthly salary ofShs 250,000.

On the other hand, in Usuk Sub- County, Katakwi district,the Koritok Produce Buying and Selling Youth Group ran into trouble when the Chairperson LC III, colluded with his son who was its chairperson and they hijacked a youth group project worth Shs10 million. The LC III Chairperson was arrested and Shs7 million recovered. The balance is being pursued.

In Butaleja District, police arrested nine youth, part of the 32 youth groups that received Shs360 million in 2013 and failed to pay back the money.

In Gulu, the District cashier withdrew Shs 256 meant for youth groups at once and misappropriated it. Police swung into action and the funds have been recovered and disbursed to other groups.

In Namayingo, two officials embezzled Shs70 million meant for all the seven groups. The officials were interdicted and the Anti-corruption Court is handling the case. The Sub County chief confessed to the offence and has refunded Shs24 million.

These revelations are at the heart of the latest progress report on government's signature programme intended to lift youths out of poverty and unemployment. President YoweriMusevenilaunched it in January 2014.

The YLP is important because it is intended to address the youth unemployment problem, which poses social, political and economic challenges for the country, experts say.

Uganda has the youngest population in the world, with over 70 % of its population being under 30 years of age. And the unemployment rate in this group is over 80 %.

However, although on paper, the five-year project was allocated Shs 265 billion, as it nears its end, only Shs115 billion has been released to the programme. Over the four year period ending onJune30, 2017, the funding deficit is Shs150 billion or 56.67%.

In the latest report, Auditor General John Muwangasays inadequate funding of the programme may constrain the achievement of the intended programme objectives of improving livelihoods of the poor and un-employed youth.

In response, officials at the implementing ministry--of Gender, Labour and Social Development--explained that they would ensure that the YLP Funds are released in line with the initial approved amount for the five-year period.

But in 2016, the Auditor General's report highlighted another problem facing the programme; that there is no proper accounting framework or detailed guidelines for accountability of the revolving funds.

This risked leading to improper accounting for programme funds, according to the AG's report.

A review of the performance of the programme in 35 districts, revealed low recovery ranging, in some cases 0%. The AG's report showed that by October 2016 only Shs5.501 billion (39%) had been paid of the Shs14.2 due for repayment by the beneficiaries. Inspections on sample basis also revealed some non-traceable group projects and a risk of losing Shs527 million, among others.

However, the implementers of the programmesay they have since made progress. By Jan. 30, this year, 13,107 projects had been financed, benefiting 163,130 individuals- 88,990 males and 74,140 females. And in total, Shs97.5 billion had been dispersed.

The bulk of the beneficiaries, 12, 472, are involved in livelihood support. Only 635 are involved in skills development.

Also, majority of the beneficiaries are school dropouts; 34.6%, followed by those who have only completed primary education 19.6%. Another 2.8% of the beneficiaries are youth with disabilities.

Because the beneficiaries have to have opened bank accounts, the programme is credited for having promoted financial inclusion.

Apart from these, Pius Bigirimana the Gender Ministry, Permanent Secretary says despite the challenges, the programme has registered significant achievements.

One of these, is the fund's recovery at 67 percent, he said adding that all the districts have reached 50 percent repayment of the amount due.

However, he noted that local government officials were frustrating the programme through misappropriation, corruption, and collusion.

But he noted that the ministry was undertaking administrative measures to recover millions of funds that have been swindled.

Bigirimanadrove the point home since the review at which he was making these remarks brought together District Chairpersons, Resident District Commissioners (RDCs), Chief Administrative Officers (CAOs), Focal Point Persons and Youth Chairperson.

According BadruBukenya, a lecturer at Makerere University, who has done research on the programme, YLP can be implemented better if the institutional support is increased from 10 to atleast 20 percent of the total fund.

Institutional support covers coordination of the programme, monitoring and evaluation, and facilitation to the Inspectorate of Government to help with accountability.

"Success of any microfinance project relies on monitoring," Bukenya says, adding that this has not been very evident in the implementation of the project.

Some beneficiaries The Independent has interacted with say most of the times they have to rely on the officials at sub-county in case of a technical problem. But because of limited resources, many times the officials at the sub-county do not have resources to assist them.

Beneficiaries also say it is difficult for large groups of 15 members to work together. The amounts given--up to Shs12.5 million--when divided amongst the group members become very little.

Most of the time, less than 50 percent of the members are active--mostly the chairman and a few others.

Experts have recommended that the maximum number in a group should be six members.

On paper the programme is straightforward but practically, critics say, it is not--a lot of paperwork leads to manipulation of youths. For instance, some youths had to pay sub-county officials to help them fill the forms.

The biggest challenge for the project is that a huge percentage of beneficiaries invested in agriculture and when the season is bad, their projects performed poorly.

Indeed, the report notes that crop production and livestock production, which account for over 40% of the disbursements, have tended to suffer poor yields, and lack of water, high prices of feeds and outbreaks of diseases such as swine fever, foot and mouth disease, Newcastle and east coast fever in various parts of the country.

Officials at the ministry say the affected projects are being considered on a case-by-case basis for rescheduling of the repayments and/or refinancing depending on the magnitude of the losses incurred.

Negative political statements have not helped matters. Apparently, some political leaders have engaged in spreading negative propaganda telling the youth that the YLP funds are government funds that should not be repaid, while others are reported to be telling the youth that the fund is a political reward.

In Abim District, for instance, the District Council leadership resolved that the youth who have refused to repay should not be forced to pay. As a result, this action has affected the speed of revolving the funds to other youth in the district.

But many agree that underfunding is the biggest challenge the programme is facing. It is to blame for inadequate supervision of the programme which, perhaps, would have ensured greater success.

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