N° 37 - September 2005

District Development and Support Programme in Uganda

The District Development and Support Programme (DDSP) was a seven-year, USD $21 million programme aimed at alleviating chronic poverty in five districts of western Uganda. The programme is largely responsible for putting these districts on their feet, with a substantial expansion of the inter-village road system, the coverage of safe drinking water and the provision of primary healthcare. The capacities of the district authorities have also been significantly developed and as such, the programme may be unique in Uganda in terms of its direct support and empowerment of local governments.

The evaluation recommended further IFAD support for these districts in order to consolidate on existing investments and had the following key recommendations:

• Three measures were recommended to ensure that the poorest and most remote communities are reached: the development of an agricultural lending programme suitable for very poor farmers; training in wealth ranking techniques to refine targeting mechanisms; more emphasis on poultry and small livestock.

• The evaluation applauded the initiative to set up a company (BUTO) owned by the districts to manage the rural finance component. However, BUTO should be required to set aside a proportion of credit funds for specifically pro-poor loans, that it be subject to the same reporting procedures as the technical line departments and that it produce a detailed plan for the purchase of BUTO shares by the subcounty development associations (SIDAs).

• Boreholes are expensive and not always the best option for water sources; consideration should also be given to protecting existing sources or constructing shallow wells. The health centre package should be expanded to include essentials such as running water, DC power, a minimum number of beds and mattresses, and compound fencing.

• Regarding financial issues: there should be 10% budget flexibility for district chiefs and the Government should adopt a system of automated counterpart fund disbursement. These proposals represent a measure of trust in decentralisation in that it gives project managers the flexibility to steer their projects in changing circumstances.

• The supervision of the DDSP was uniformly excellent and played a major part in the success of the project. It was also generously funded. The evaluation recommended that IFAD ponder carefully on the connection between the two.

Reaching the poorest

The development of a pro-poor loan product suitable for the agricultural needs of very poor farmers is not easy, but lessons can be drawn from projects where it has been achieved. Targeting of the poorest also requires appropriate wealth ranking exercises and project staff must be equipped with the necessary techniques and know-how. More can be done to encourage the development of the rearing of small livestock such as goats and pigs and, especially, poultry, which can be afforded by even the poorest households and which results in additional income.

Matching enterprise with equity

The founding of an independent microfinance institution by the districts was a bold and interesting initiative, but the company in question requires close supervision to ensure that it achieves the primary goal of the rural finance component: to finance the income-generating activities of the very poor. To this end, a quota system for pro-poor loans should be established, to be financed if necessary by more profitable lending. There was some doubt about BUTO’s accountability and reporting systems, which need to be monitored and clarified. The stated aim is for the highly successful sub-county development associations progressively to purchase BUTO shares and, eventually, to manage the company, but the steps by which this will take place have yet to be clearly spelled out.

Getting the options right

There was a tendency to opt for boreholes as the solution for new water supplies, but there do exist cheaper, and in some cases, more appropriate options such as the improvement and protection of existing sources and the digging of shallow wells. Regarding health centres, the evaluation found that some essential ingredients were missing from the original ‘package’. There were new maternity units without running water, wards with not enough beds, and patients were expected to provide their own mattresses. Such basic amenities should be included in the original investment, even if that means a more costly one. Health centres in remote areas are the vanguard and symbol of development and it is important that they should provide the service for which they were intended.

Flexible finances

The evaluation recommended a tolerance margin of 10% allowing district officers to deviate from the original AWPB without specific application, subject only to audit controls. This kind of flexibility is not popular in government bureaucracies for obvious reasons, but it is a common enough feature in management structures in the private sector and a necessary means by which managers can respond to changing circumstances and react promptly to urgent situations. The evaluation believes that it would be a very positive development to see such tolerance margins adopted as standard practice in IFAD-funded projects. Essentially, they represent a measure of trust in decentralization. One further proposal was made by the evaluation which also could advantageously be built into project designs, namely that the system of counterpart fund disbursement be automated. Governments will find many reasons to object to such a measure, claiming perhaps that it infringes on their own need for flexibility, but the flow of counterpart funds is problematic in many projects, and automated payments – like tolerance margins – are very common in today’s business world.

You get what you pay for!

The DDSP enjoyed far better and closer supervision than any other IFAD-funded project. The supervision missions included an expert for each component and many of these individuals returned several times, giving the supervision process continuity and genuine expertise. District staff unanimously gave it as their opinion that the project owed much of its success to the quality of the supervision. It emerged – unsurprisingly – that the normal supervision budget had been augmented from other sources.

Project Data
Project cost	USD 21 million
IFAD loan	USD 12.6 million
Co-financed by	The Belgian Survival Fund (USD 5.93 million) Development Cooperation Ireland (USD 854,000)
Government funding	USD 1.6 million
Supervision	IFAD
Loan Administration	UNOPS
Project duration	May 2000 – June 2006

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Further information

The Republic of Uganda, The District Development and Support Programme Report, Completion Evaluation, Report No. 1637-UG, July 2005, Office of Evaluation, IFAD, Via Paolo Di Dono, 44, Rome 00124, Italy.