THE MINISTER OF FINANCE, PLANNING AND ECONOMIC DEVELOPMENT (Mr Matia

Kasaija): Madam Speaker, this is a statement on the Parish Development Model.

Madam Speaker, I thank you for this timely opportunity to make a submission on implementation of the
Parish Development Model, which is expected to start in the Fiscal Year 2021/2022.

Honourable colleagues, you will recall that on 30 January 2020, Parliament approved the Third National
Development Plan (NDP III) of 2020/2021 -2024/2025. The goal of NDP III is to increase household
incomes and improve the quality of life of Ugandans.

This goal demands our collective and focused effort together with the support of our partners in
development, including the private sector. This collective effort is guided by the theme of the NDP III:
"Sustainable Industrialisation for Inclusive Growth, Employment and Wealth Creation."

You will appreciate that internal and external markets are vital for our industrialisation agenda. This
reality was made very apparent recently by the COVID-19 pandemic as you all know. The pandemic has
reminded us of the urgent need to speed up our national efforts to rapidly grow the share of Ugandans in
the monetised economy, where effective demand is generated to support industrial growth. We must do so
without compromising the need to grow the quality and quantity of our exports to regional and
international markets.

The 2014 National Population and Housing Census revealed that 68 per cent of Ugandan households
relied on subsistence agriculture as their main source of livelihood. This number did not include
subsistence households in the non-agricultural sectors.

Uganda Bureau of Statistics (UBOS) has since defined the subsistence economy to capture subsistence
households in both the agriculture and non-agricultural sectors; and to distinguish between being in the
subsistence economy and being poor as highlighted in Box 1 below.

The 2016/2017 Uganda National Household Survey revealed that 39 per cent of households - that is 3.3
million people - were in the subsistence economy, of which, 24.2 per cent were agricultural households
and 14.8 per cent were non-agricultural households as shown in Table 1 below.

UBOS has further undertaken to establish the share of all households in the subsistence economy using
the 2019/2020 Uganda National Household Survey, and these estimates will be released at end of April
2021.

Definition of Households in the Subsistence Economy

(I am reading from Box 1.) Households in subsistence economy are defined as those engaged in
production of goods and/or services whose returns are only enough or unable to meet their basic food and
non-food requirements. They include households engaged in subsistence farming, earning a wage or
salary or operating a business and completely not working.

You are aware that in 1992, 56 per cent of Ugandans were living below the national poverty line. By
2016/2017, Government's poverty eradication efforts had reduced this share to 21.4 per cent - that is 8
million people. The Youth Livelihood Programme (YLP) and the Uganda Women Empowerment
Programme (UWEP) are some of the recent development programmes helping to further drive down
poverty.
Despite the general success registered by these and other related programmes, they continue to be
characterised by the following limitations:

1. Their coverage has been localised to a few parishes at a given time.

2. They have not been directly relevant to the country's industrialisation and food security agenda.
3. They generally suffer from high administrative costs.
4. Their services are relatively expensive for their intended beneficiaries.

I will illustrate this point later in my statement.

Having two out of every five Ugandans living from hand-to-mouth is unacceptable. Let me repeat this:
Having two out of every five Ugandans living from hand-to-mouth is unacceptable. Government is
convinced that nothing can better guarantee inclusive growth and employment for Ugandans than
equitable participation of more Ugandans in the monetised economy.

It is the above background that I now wish to proceed to talk about the Parish Development Model, a
reform that is fully backed by the Local Government Act, 1997; the Public Sector Transformation
Programme of NDP III; the Manifesto of the National Resistance Movement of 2021-2026 and both
presidential and Cabinet directives on priority commodities for Area-Based Commodity Development.

The Parish Development Model

The Parish Development Model is a strategy for organising and delivering public and private sector
interventions for wealth creation and employment generation at the parish level as the lowest economic
planning unit. Its implementation marks a major milestone in Uganda's development journey in three
main ways:

a) It accelerates implementation of Area-Based Commodity Development planning, which is vital for

realising the quantity and quality of agricultural production required for agro-industrialisation and
export development.

b) It extends the whole-of-Government approach for development to the parish level in a consolidated
manner as opposed to working in silos.

c) It localises Vision 2040 and the National Development Plan for effective measurement and
management of development interventions.

The Parish Development Model is made up of seven pillars under Table 2. These pillars are implemented
by both public and private sector institutions at the Central Government and local government levels. The
pillars are:

1. Production, processing and marketing (Value Chain Development).

2. Infrastructure and Economic Services.
3. Financial Inclusion.
4. Social services.
5. Community Data (Community Information System).
6. Governance and administration.
7. Mindset Change.

The Local Government Act, 1997 provides for the parish as a planning unit of Government. Section 47
specifically provides for an 11-member parish executive committee comprising of the members listed in
Table 3 below. One-third of the parish executive committee members should be women. Let me repeat
this: One-third of the parish executive committee members should be women. I expected to hear women
clapping for me. (Laughter)

The Harmonised Participatory Planning Guide for Parishes/Wards issued by the Ministry of Local
Government in 2003 adopted the parish council as the default Parish Development Committee (PDC).
The same guide also provides for co-opted people with expertise to advise the PDC in technical areas
under consideration by the PDC. This effectively makes the PDC a technical arm of the parish council.
The co-opted people represent various experiences and interests. They include representatives of faith-
based organisations and reputable persons such as retired civil servants like teachers.

The composition of Parish Executive Committee (PDC) includes the following:

1. The chairperson
2. The vice-chairperson
3. The General secretary
4. Secretary for information, communication and education
5. Secretary for security
6. Secretary for finance
7. Secretary for production and environmental affairs and
8. Secretary for youth
9. Secretary for women
10. Secretary for persons with disabilities, and
11. Secretary for council of elder persons.

The Local Government Act further provides under section 69 that the parish chief will be responsible for
ensuring implementation of district and Government policies and programmes in his or her area of
jurisdiction. It mandates the parish chief to assist the parish council in planning, budgeting and budget
implementation; supervise or monitor the implementation of socio-economic development projects; and
to implement lawfu1 policies and decisions of the council. The parish chief is under the supervision of the
parish council, sub-county chief and chief administrative officer.

Results framework of the Parish Development Model (PDM)

Madam Speaker, the goal of the PDM is socio-economic transformation for wealth creation and
employment generation at the parish level. Performance against this goal will be measured by the share of
households who graduate into the non-subsistence economy. This share will be monitored and reported on
at parish, district and national levels.

Madam Speaker, the Parish Development Model consists of the following three components, which are
briefly highlighted below: The Strategic Planning and Financing; Commercial Household Production; and
Performance Results.

Strategic Planning and Financing

The Government has identified and prioritised the development of 18 commodities under the Parish
Development Model, which is under Tab1e no. 4. These are commodities that have market locally and
internationally. These are: coffee, cotton, cocoa, cassava, tea, vegetable oils/oi1 palm, maize, rice,
sugarcane, fish, diary, beef, bananas, beans, avocado, shea nut, cashew nuts, and macadamia nuts.
 Successful implementation of the Parish Development Model requires ready market and value addition
for the production surplus from the parish. This market is provided by SMEs and co-operatives engaged
in processing, manufacturing and exporting of the 18 priority commodities which I have just read above.

The sustainable growth and development of these SMEs requires a competitive business environment
including access to development finance. To this end, the Ministry of Finance, Planning and Economic
Development, will play its role of strategic economic planning and financing as highlighted below:

1. Negotiating Markets: Working under regional and international economic co-operation frameworks
such as East African Community to drive up volumes and values of Ugandan exports.

2. Value Chain Development, Zonal and National: Guiding public and private investment to support
processing and manufacturing at the zonal and district level. This includes having in place zonal-
specific economic plans for development of commodity value chains in support of increased
production and productivity at the parish level, which we are envisaging.
3. Fostering a Competitiveness Business Environment: Prudent management of the macro economy to
ensure a stable and low-cost business environment capable of attracting private investment and
boosting exports.

4. Mobilising the SME Financing: Alignment of micro financing strategies at the parish level with
financing strategies for SMEs, co-operatives and industrialists at the zonal and national level under the
auspices of the National Financial Inclusion Strategy and the Financial Sector Development Strategy.

Commercial Household Production

Madam Speaker, under the Parish Model, the CAO will be tasked with the responsibility to achieve a
sustainable production surplus of the applicable commodities by the parishes in his/her district.

Performance Results

Madam Speaker, consistent with the whole-of-government approach, the Office of the Prime Minister
together with Uganda Bureaus of Statistics, Ministry of Local Government and the Ministry of ICT and
National Guidance will spearhead the government-wide coordination of performance measurement and
management under the Parish Development Model.

Specific interventions of the Parish Development Model

Madam Speaker, each of the seven pillars of the parish model has specific interventions and budgets
allocated to it. Details are contained in a document titled “A Quick Guide to the Parish Development
Model” that I would like to lay on the Table. Thank you.

Of the seven pillars of the model, pillar 3 on financial inclusion represents the most significant changes
for the budget for in the Financial Year 2021/2022. I will therefore highlight the key interventions and
budgets contained under this pillar.

Pillar 3 - financial inclusion: interventions under this pillar are intended to promote savings and
investment by households in activities with a potential for generating a production surplus. The specific
interventions include:
 1. Establishment and capitalisation of the Parish Revolving Fund.
2. Supervision of parish-based SACCOs by Uganda Microfinance Regulatory Authority.
3. Capitalisation of constituency-based SACCOs under the Presidential Initiative for Wealth Creation
and Jobs that is Emyooga for households in the non-subsistence economy.

Participating parish-SACCOs under the Parish Development Model will lend funds from the Parish
Revolving Fund to individual households or household collectives at concessional interest rate inflation
plus one per cent. This is intended to ensure that there is no loss of value of money.

Uganda Shillings 404.3 billion has been budgeted for capitalisation of the Parish Revolving Funds in
Financial Year 2021 /2022. This translates to an average allocation of Shs 38.16 million per parish.
Government will allocate more funds to further capitalise the Parish Revolving Fund in the subsequent
financial years of the NDP III period.

To allow time for consultations and preparation of detailed allocation criteria for parish-specific
allocation of funds, parishes will receive a uniform allocation of Shs 38.16 million in this coming
financial year.

In Financial Year 2022/2023 and the medium term, the specific amount of funds to be allocated to the
Revolving Fund of the respective parishes will be determined using the following broad criteria:

1. Share of households in the subsistence economy by sub-county. This will be established using a
parish register to be established under pillar 5 of the model.

2. Affirmative action for special groups; women, youth and persons with disabilities. Consistent with
the current affirmative policy of Government, we are proposing that parishes allocate 30 per cent of
the money from the Parish Resolving Fund to household enterprises endorsed by women in the
household.

3. Affirmative action for different regions and zones based on parameters such as poverty.

How will the parish model be financed?

Madam Speaker, with exception of pillar 3 on Financial Inclusion, all pillars of the Parish Development
Model will continue to be funded under existing arrangements. In Financial Year 2021/2022, the Pillar 3
of the Parish Development Model will be financed through amalgamation of the wealth funds listed in
Table 5 below.

Let me read it.

Table 5. Amalgamated funds to finance the Parish Model in the Financial Year 2021/2022

S/No. Wealth fund FY 2021/2022

Allocation (billions)
1. Youth Livelihood Fund -
2. Uganda Women Empowerment Fund 32
3. PRDP 98
4. Luweero-Rwenzori Development 9.3
Programme
 5. NAADS (Seedlings) 56
6. Agri-LED (OWC) 200
7. UCDA (Seedlings) 58
Totals 453.3

A total of Shs 59 billion that is currently in circulation under the existing arrangement of the Youth
Livelihood Programme and Uganda Women’s Empowerment Programme (UWEP) will also be
channelled to the Parish Revolving Fund upon its recovery from beneficiaries with time.

The amalgamated funds under the Parish Revolving Fund will be distributed as summarised in Table 6
below and I will read it.

Table 6 Reallocation Summary of Amalgamated Funds in billions

Parish Admin. Staff CIS Data Training Sub-totals
Revolving costs costs Tools
Funds
District Local 404.3 2.2 15.0 26.8 0 448.3
Governments
UBoS 0.8 3.2 4.0
MoLG 1.0 1.0
MICT&NG
Sub-total 400.0 3.2 15.0 28.6 3.2
Grand total 453.3

That is how we are proposing to reallocate the money but we can receive further guidance from this
House.

Comparison of the Parish Development Model with past and existing wealth creation funds

Madam Speaker, I would like us to listen to each other on this because we have had feelings from our
friends that what we have been doing was not right.

Compared to past and existing affirmative action interventions, the Parish Development Model has the
following strengths:

i) It is a universal programme covering all the 10,594 parishes of the country (2021 Figures). This
provides for fair and equitable access to resources.

In addition, district local governments receive a bigger resource in total than is possible under existing
initiatives. For example, Soroti District (including Soroti City) with a total of 49 parishes and 503
villages, will receive an allocation of Shs 3 billion under the Parish Development Model. This is far
higher than what is available under existing initiatives (Shs 1.2 billion under Youth Livelihood
Programme and Shs 0.58 billion under UWEP in the Financial Year 2020/2021.

ii) It is more inclusive than existing initiatives because it caters for all interest groups in a parish
(women, youth, persons with disabilities and other unspecified minority interest groups).
iii) It is implemented through established Government structures, which significantly lowers its
administrative costs compared to existing arrangements of a similar nature.

iv) It is designed to build and develop parish institutions as opposed to simply delivering time bound
interventions.

v) Its credit is lower than that of existing initiatives. Loans from the Parish Revolving Fund will have
an interest rate of inflation rate + one per cent compared to a surcharge of five per cent under the
Youth Livelihood Programme and a service fee of five per cent under the Uganda Women’s
Empowerment Programme.

vi) Under the Parish Model, the funds allocated to the Parish Revolving Fund belong to the residents of
the parish and will be managed by a specialised financial institution (Parish SACCOs) that is
supervised by a regulator for their perpetual use and multiplication.

vii) Its commodity focus (18 priority commodities) has an unrivalled relevance for the country's food
security and industrialisation agenda.

The prior actions for implementation of the Parish Model

Cabinet approved implementation of the Parish Development Model (PDM) as the delivery strategy for
transitioning households out of the subsistence economy, with effect from 01 July 2021.

A number of prior actions will be implemented by end of the Financial Year 2020/2021 and at the start of
the Financial Year 2021/2022, for successful implementation of the Parish Development Model.

It is expected that the Parish Development Model will be fully operational by the start of the second
quarter of the Financial Year 2021/2022. The detailed implementation roadmap is contained in the Guide
to the Parish Development Model, which I have just laid on the Table.

In conclusion, I have highlighted the cause for graduating more of our fellow citizens from the
subsistence economy. These citizens include women, youth, the elderly and persons with disabilities.
They are resident in the parishes where the Parish Development Model will be implemented.

Under the Parish Development Model, a bigger number of these citizens will have access to more
resources than has been possible under any affirmative programme we are implementing in the country
today.

I therefore call upon my colleagues to seize this unique opportunity of making a lifetime difference in the
lives of the 39 per cent of Ugandan households in the subsistence economy, by extending their full
support for the implementation of the Parish Development Model starting in the Financial Year
2021/2022. I beg to submit.