Urban development key to Uganda’s economic growth

“The investment operations covered sectors such as agriculture, education, health, transport, energy, local government, environment, public service reform, and social development in northern Uganda,” she said.

The IDA is an arm of the World Bank that helps the world’s poorest countries. Established in 1960, IDA aims to reduce poverty by providing interest-free credits and grants for programmes that boost economic growth, reduce inequalities and improve people’s living conditions in low income countries.

IDA
As many countries are still incapacitated to raise the funds domestically through taxation, World Bank officials say IDA is one of the largest sources of assistance for the world’s 79 poorest countries, 39 of which are in Africa. As such, it is the single largest source of donor funds for basic social services in the poorest countries.
Available information shows that IDA lends money (known as credits) on concessional terms. This means that IDA credits have no interest charge and repayments are stretched over 35 to 40 years, including a 10-year grace period. IDA also provides grants to countries at risk of debt distress.

Statistics at Washington show that since its inception, IDA credits and grants have totalled $207 billion, averaging $14 billion a year in recent years and directing the largest share, about 50 per cent, to Africa.

Records show that the Bank’s provision of direct budget support to Uganda has helped the ongoing policy dialogue between the Bank and the government and have been particularly effective in improving the predictability of resource flows and reducing transaction costs.

More support
It also documented that besides financial support, IDA’s contributions to Uganda’s development include technical assistance, analytical work among other things.
For example, it was in Uganda that IDA pioneered the Public Expenditure Tracking Surveys (PETS), now a standard tool for improving the effectiveness of public spending across the developing world.

Since 2001, IDA has supported Uganda’s poverty strategy through a series of seven annual general budget support and debt reduction operations. As the first recipient of a World Bank Poverty Reduction Support Credit (PRSC) in May 2001, Uganda led the creation of a modality used in many other countries.

The World Bank is optimistic that if urbanisation can be managed better, significant gains can be expected in productivity and poverty reduction in Uganda.