What you need to know:
- This was revealed in its report on public debt, grants, guarantees and other financial liabilities for the financial year 2022/2023 on climate finance.
The Ministry of Finance, Planning and Economic Development has said that a review of climate finance inflows over the last three years has shown mixed results.
This was revealed in its report on public debt, grants, guarantees and other financial liabilities for the financial year 2022/2023 on climate finance.
The report indicates that annual climate finance inflows rose from $313.6m in FY 2020/21 to $447.4 million in FY 2021/22 but declined to $423.9 million in the current fiscal year (FY 2022/23).
“The significant rise in FY 2021/22 is attributed to the resuscitation of global climate change activity which had hibernated owing to the Covid-19 pandemic. Also, there was a surge in inflows of Covid-19 recovery support in the form of grants and technical assistance to support Uganda achieve a climate change-responsive Covid-19 recovery process. Climate finance inflows are envisaged to grow significantly soon given the ongoing institutionalization of climate finance through the creation of the Climate Finance Unit,” the report reads in part.
On the climate change project performance challenges, the Ministry of Finance said whereas there has been significant progress in mobilizing climate finance, a number of challenges continue to obstruct optimal performance. These include weak coordination of climate finance efforts among state and non-state actors which undermines the tracking and capturing of off-budget climate finance support; capacity gaps within MDAs and local governments to mobilize and manage climate finance through the preparation of bankable project proposals; and the absence of a clear mechanism to track climate finance inflows from domestic and global sources exacerbated by blurred clarity on what constitutes climate finance.
The Ministry of Finance explained that these reduce the accuracy of actual climate finance flows in the country.
The Ministry of Finance said in order to improve the Domestic Revenue and also to address the impacts of climate change, they have set up a Climate Finance Unit (CFU) that will provide support in ensuring that mobilization of climate financing for both adaptation and mitigation activities in Uganda is enhanced.
“The CFU has therefore received funding from the UK government worth 1.4 million pounds for its operationalization. This Ministry in partnership with other stakeholders initiated the process of undertaking Climate Change Budget Tagging in the ongoing PBS upgrading and interfacing process. This will ease the tracking of domestic climate finance inflows to evidence-based reporting and decision making,” the Ministry said in the report.