Strengthening Capacities and Institutions for PIM, PPPs and DRM

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Project Abstract A. Project ComponentsProject Component 1 – Strengthening Uganda’s Public Investment Management environment1. This component aims to improve the overall Public Investment Management environment in Uganda, by addressing the legal environment, building institutional systems, and capacities towards PIM in the key institutions, specifically the PAP unit, which is the gate keeper of PIM, and also capacities for targeted stakeholders nationally, and as well as ensuring that all Public investments are aligned to appropriate financing options, with an objective of raising higher economic returns from the public investments. The subcomponents include: 2. Strengthening Public Investment Management – Systems and Institutional Framework: This subcomponent will support strengthening the efficiency and effectiveness of Uganda’s Public Investment Management System (PIMS). This will be achieved by putting in place a framework which streamlines the project development cycle to which all project ideas irrespective of the source must be subjected to appraisal, building human capacity required for the successful operationalization of the PIMS framework, and strengthening the PIMS legal Framework. 3. Strengthening Public Investment Management – Centre of Excellence for PIM training: This component will support the: Training of Trainers (ToT) in PIM; PIM training and capacity building for specified stakeholders; development of PIM curriculum and training materials; attaining of international accreditation for the Centre of Excellence; and relevant PIM research that is being discussed with the PAP department. By setting up the PIM Centre of Excellence in the School of Economics of Makerere University, the project aims to provide a consistent supply of relevant skills for ensuring an efficient and effective PIMS in Uganda. 4. Strengthening Public Investment Management – Strengthening Financing of Public Investments: A challenge in implementing NDP II, has been the lack of alignment between the planning and implementation of projects set out in the NDPs, actual budget allocations and actual expenditures. To address this challenge, as well as others, Government is implementing a framework for better PIM. This has been instrumental in streamlining project selection, preparation and appraisal before approval of financing. While the Medium-Term Debt Management Strategy (MTDS) advises on the thresholds and levels of financing that are to be acquired through external financing for a given period, a PIFS is required to provide a streamlined/coordinated approach for aligning existing and proposed government projects and programs with appropriate financing options. The Directorate of Debt and Cash Policy is a new directorate with new officers who lack adequate capacity in technical and financial analysis of loan proposals and loan negotiations. The subcomponent will therefore help in addressing these capacity gaps and ensure that skills in loan negotiations are provided. This will be done through: (i) developing a PIFS that provides an approach to link financing options to appropriate projects for high economic rates of return; (ii) developing Debt Financing Expression of Interest (EoI) Guidelines to help expand financing options and include credible non-traditional funders of Government projects and programmes; and (iii) training staff in loan negotiations to reduce the risk and enhance the value of debt financing. Project Component 2 – Support to the Public Private Partnerships (PPP) Unit 5. This project has one component: strengthening government capabilities to identify, prepare and procure PPPs and enable improvements in the process for decision-making on PPPs. The project proposes to provide support in the form of experts to the PPP Unit. The propos al is for the recruitment of three or more advisors, with a combination of national and international expertise, who are well placed to carry out PPP legal, technical and financial advisory (and any other services as required by the PPP Unit), and in doing so, can simultaneously hand-hold and build in-house capacity.6. The PPP Advisor will work closely with the PPP Unit, the Contracting Agency and other government and external stakeholders providing strategic and hands-on support in the identification, assessment, procurement and contract management processes essential to developing a robust project pipeline for Uganda, preparing of various entities to undertake their functions in a technically sound and timely manner throughout the project process, and in the identification of gaps in the enabling framework along with the suggested solutions. 7. The Technical Advisor will assist the PPPU and Contracting Authorities to develop plans for sectors programs or pipeline PPP projects, carrying out technical reviews of documents, technical assistance in guiding and assessing social and environmental due diligence, conduct site visits, coordinate the work of all advisors and the contracting authorities, and provide support to all technical aspects of the procurement process including the bid evaluation, negotiation and other sub-processes. 8. The Financial Advisor will support all aspects of the work that deal with the financial and financing aspects of projects, including screening projects early on PPP suitability using the PPP Project Screening Tool, preparation and assessment of project feasibility studies, including computation of VfM and affordability assessments, development of guidance material for the same, assessing project financial models submitted as part of the bid documentation on projects, bid evaluation and negotiations, and discussions with lenders and other investors.9. Detailed TORs will be prepared for each function prior to initiating recruitment.Project Component 3 – Enhanced Domestic Revenue Mobilization (DRM) for improved fiscal outcomes10. The World Bank has completed numerous diagnostic studies which revealed that Uganda’s revenue mobilization drive is constrained by a narrow tax base, mainly characterized by gross informality; some defects in the tax policy; and weaknesses in tax administration. To achieve the potential of domestic revenue, the Government will need to widen its tax base, improve the policy framework, and strengthen administration. Some of these findings from the diagnostics were disseminated in the Uganda Economic Update, 11th edition and form major inputs to both the draft Domestic Revenue Mobilization Strategy (DRM-S) Matrix and the 2018-2019 budget initiatives. The Bank is also in discussion with GoU authorities to explore opportunities for a Development Policy Operation (DPO) in support of the DRM agenda.11. The requested funding for this project is expected to support the completion, validation, and inclusion of the results of these diagnostics into the DRM strategy formulation process and others listed below. The specified activities are designed to mitigate knowledge and technical gaps for DRM effort in Uganda. Knowledge products on key DRM institutional challenges, and reform options will be developed and disseminated for action among key stakeholders, a legally binding tax legislative framework will be updated, consolidated, and submitted for approval.