Fire and ice: Can Emyooga, Parish Model coexist?

Mr Haruna Kyeyune Kasolo—the junior minister for Microfinance—seemed particularly pleased with himself. 
He had just combed every pocket of Ankole Sub-region, dipping generously into the Emyooga Fund. 

While at the Mbarara City North Produce Sacco, he learnt that 3,000 traders had saved Shs220m. 

They also had a share capital of Shs15m. For all of this, the Sacco earned itself a motorcycle and Shs20m from the Microfinance Support Centre (MSC) as additional seed capital, having received Shs30m earlier. 

“The motorcycle is to help monitor Sacco members and I’m giving it to you free-of --charge,” Mr Kasolo revealed, adding that the grand plan is to transform Saccos into rural banks.

The lending rate of Emyooga—also known as the Presidential Initiative on Wealth and Job Creation—stands at eight percent per annum. 

Mr Kasolo believes this interest should wean Ugandans off the parasitic money lenders. 
But for this to happen, Ugandans “need to give up on reckless spending.”

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He added: ‘Moneylenders are fighting this programme because they know we are interfering with their business. They have been humiliating you, asking for collateral and a lot of other things. In Emyooga, we just ask you to save before you borrow money.”

Enter the Parish Development Model
Emyooga won’t be working in isolation. Last weekend, President Museveni launched the Parish Development Model (PDM). 

Mr Museveni described PDM as “the clarity of [the] vision that promised [to make] the 2021-2026 term…a kisanja [term] for creating wealth, jobs, and incomes for all Ugandans.”

He added: “[PDM] is a whole system to help us transform subsistence to monetary economy through calculative agriculture. The efforts now should be sensitising our people how and who to do what; because we don’t want our people to do what won’t help them.”

ALSO READ: How Emyooga scheme works

Built on pillars of production, storage, processing and marketing, infrastructure and economic services, financial inclusion, social services, mindset change, as well as cross-cutting issues (gender, environment, disability, etc), PDM intends to lift Ugandans (3.5 million households) out of poverty by disbursing Shs100m to each parish (after initially shelling out Shs17m).

To the rescue of SMEs
Mr Francis Mwesigye, a chief economist at the Uganda Development Bank, says the PDM could help small and mid-size enterprises (SMEs)—most of which are informal—“penetrate our economy.”

He adds: “One possible way of supporting the informal sector and SMEs would be through informal mechanisms. If people use groups at the micro level, they get loans and pay back. These people can police each other.”

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So, just like Emyooga, the PDM is a micro-credit scheme. The schemes have proven hugely popular with President Museveni, who will join the 40-year club when Uganda next goes to the polls in 2026. 

Prof William Muhumuza, a senior lecturer of Political Science at Makerere University, in a 2013 paper, opined that such schemes need to be understood within the broader poverty policy perspective of accelerating poverty reduction through broad-based economic growth. 

All this while focusing on public expenditure on the key sectors of the economy that enhance income-earning opportunities for households of the poor people, raising labour productivity and improving people’s welfare through provision of basic social services.

ALSO READ: Museveni speaks out on PDM

The schemes—Prof Muhumuza further noted—have been used both as an anti-poverty strategy and a political instrument since 1988. 

For starters, in 1994, the NRM introduced the Poverty Alleviation Project (PAP) purposely to stimulate the creation of income-generating activities among the poor and consequently reduce poverty. 

Observers say PAP registered success in terms of extending investment capital to those in income groups. 
In 1995, the same government instituted the Entandikwa Credit Scheme (ECS), which was a parallel state-sponsored credit scheme. 

ALSO READ: How Parish Devt Model will work 

Unlike PAP, poor programme design, organisational laxity, weak credit delivery mechanisms, patronage tendencies, lack of or inadequate supervision, and loan recovery problems bedevilled the ECS. 

Likewise, the performance of the clients of the ECS was poor and this was partly because its loans were diverted to consumptive areas.

Implementation bottlenecks
In 1997, the government came up with the Poverty Eradication Action Plan (PEAP). It provided an overarching framework to guide public action to alleviate poverty. It was, however, met with mixed results. 

In 2007, the NRM floated the idea of “Prosperity for All”, which is commonly known as “Bonna Bagagawale.” 

The programme was designed to use a Sacco-per sub-county strategy to channel both agricultural and commercial loans at below-market rates to borrowers. Unlike earlier poverty alleviation programmes such as PEAP, policy analysts criticised Bonna Bagagawale on account that it lacked a blueprint to govern its implementation. 

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They further argued that it created a scenario where public officials were being politically pressured to perform functions outside their job descriptions.  

Like those before it, Bonna Bagagawale was doomed to fail. It did not help matters that it was rolled out during electioneering. 

People perceived the funds they received under the programme as a reward for their votes, which led to misuse of the funds and the reluctance to pay back.

ALSO READ: Why poverty interventions remain ineffective

For the Emyooga programme, which was launched in late 2019, the government injected Shs231b as seed capital. Figures released by the MSC indicate that Shs40b had been saved by Saccos between 2020 and 2021. 

There’s a belief that more could have been achieved hadn’t the programme been launched during a time of intense electioneering.  

“The truth is that our people here thought the money was a reward for voting NRM yet they are supposed to pay back such that other Sacco members get a chance to take the money,” Mr Michael Mawanda, the Igara East  legislator, told Mr Kasolo at an Emyooga monitoring function on February 18, 2022.

Mr Kasolo insists there is no indication that Emyooga were sold as a political reward. 

He has even threatened to shame defaulters “on radio and TVs.” 
The path that the PDM has carved out for itself is markedly different. But can it entirely be shielded from politicisation. 

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Mr Mwesigye says “the focus should be on how we can use these programmes to transform our lives.”
But while anecdotal evidence suggests that Emyooga beneficiaries are mainly from the ruling NRM, empirical evidence stitched together by Mr Kasolo’s monitoring exercise points to a different outlook.

“You have been voting for the NRM by 85 percent, but when they introduce government programmes; you don’t perform well,” Mr Kasolo said while in Ntungamo District.

The four constituencies in the western district saved approximately Shs400m, which is dwarfed by the nearly Shs1b four constituencies in Ssembabule have put together. 

This could be down to the fact that Opposition legislators have rallied their constituents that warm up to Emyooga. 

When Mr Kasolo visited Kalangala District on February 23, Forum for Democratic Change’s (FDC’s) Moses Kabuusu (Kyamuswa County) and National Unity Platform’s (NUP’s) Hellen Nakimuli (Kalangala Woman) attended the event, while NRM’s Julius Mukasa Opondo (Bujumba County) was a no-show. 

Coexistence question
It’s very hard to know if the PDM—whose guidelines have not yet been approved by Parliament—will be affected by Uganda’s murky politics. 

The Leader of the Opposition in Parliament, Mr Mathias Mpuuga, has already questioned why a flat figure is being handed out to parishes with different terrains, populations, demographics and scale of development. 
Analysts, nevertheless, insist it must be given a chance before judgment is made.

“It’s too early to make a judgment on which factors will affect this programme, but what I know, we normally come up with good concepts and documents and then, for some reason, fail to implement them to the letter,” Mr Paul Lakuma, a research fellow at the Economic Policy Research Centre (EPRC), says.

There is also a distinct possibility that the population will confuse both programmes—Emyooga and the PDM. 

This was on display in January when Mr Kasolo, who is going to play a major role in implementing the PDM, visited Buikwe District. 

The leaders there expressed fears that Emyooga funds could be diverted to the PDM.
“We hear that money meant for Emyooga and women groups will now be diverted to Parish Development Model,” Buikwe District chairperson Jimmy Kanaabi said. 

He added:  “We need assurances that Emyooga is here to stay.”

In response, Mr Kasolo has been equivocal that “PDM is structured in a way that it is for farmers” and “Emyooga is for the informal sector.” 

While launching the programme in Kibuku District last weekend, President Museveni was quick to note that the two programmes will work in tandem as he hopes to achieve middle-income status.

“The PDM, however, is not the only way out of poverty. We also have Emyooga and have identified four sectors for wealth and job creation: commercial agriculture, industry, services and information, communication technology,” the President noted.

He added: “This is because we don’t want spectators. We want everyone to be in the field of economic development, working. Once that is done, we shall eliminate poverty and achieve middle-income status at a much faster pace.”

Trend

It’s very hard to know if the Parish Development Model—whose guidelines have not yet been approved by Parliament—will be affected by Uganda’s murky politics. 

The Leader of the Opposition in Parliament, Mr Mathias Mpuuga, has already questioned why a flat figure is being handed out to parishes with different terrains, populations, demographics and scale of development. 
Analysts, nevertheless, insist it must be given a chance before judgment is made.

Drop in the Ocean?
The government’s decision to launch the Parish Development Model (PDM) in eastern Uganda was intended to be rich in symbolism. 

The region has one of the highest concentrations of poor people per square kilometre as per data from the Uganda Bureau of Statistics (UBS).

Soroti District, with a poverty density of 53 percent, is one of the pastoral areas in eastern Uganda that has several households outside the money economy. 

It is, in many respects, the antithesis of districts in the Ankole Sub-region, which—by President Museveni’s admission—are registering resounding successes in the battle to alleviate poverty.

“We’re not here to conserve poverty. We cannot conserve poverty. We can conserve swamps or animals in the [game] parks, but not poverty,” Mr Museveni said during the PDM launch last weekend.

He added: “Now we’re doing everything wrong; we don’t conserve swamps or [game] parks but poverty. The Banyankole [got] out of poverty long ago.”

Under the PDM, for this financial year, the government will give every parish in the country—regardless of level of development—Shs17m. 

This will normalise at Shs100m starting next financial year. 
The money is essentially seed capital that will be added to money saved by every Sacco formed at each parish. 

Critics have taken exception to the fact that the PDM does not recognise asymmetries across the country.
Ms Anna Adeke Ebaju, 30, is serving her first term as Soroti Woman MP. She says besides the asymmetries, the money being offered is the proverbial “drop in an ocean.”

She says: “In Soroti District, I have 58 parishes. A parish has more than 1,500 people. They are in groups and usually, the groups save money and they lend each other to return it and most of them take it and return it on Christmas [Day] and start a new cycle. Shs17m is a drop in the ocean.”

About what needs to be done, she references the views of the founder of her FDC party, Dr Kizza Besigye. 
“High capital development is more critical than putting money in people’s hands. What’s the quality of citizens? Can they increase the money that they have been given? Can they be able to be enterprising?”

Under the PDM, the parish chiefs are going to be crucial cogs in the machine. They will be expected to report to the sub-county chief. 

Uganda has 10,594 parishes. The government says each parish will have a Sacco through which government support will be funnelled.

What they say about the schemes...

Haruna Kyeyune Kasolo (State minister for Microfinance): Moneylenders are fighting this programme [Emyooga] because they know we are interfering with their business. They have been humiliating you, asking for collateral and a lot of other things. In Emyooga, we just ask you to save before you borrow money.

Prof William Muhumuza (senior lecturer of Political Science at Makerere University):....such schemes [such as Emyooga and Parish Development Model] need to be understood within the broader poverty policy perspective of accelerating poverty reduction through broad-based economic growth. 

Michael Mawanda (Igara East  MP): The truth is that our people here thought the money [from Emyooga  and the Parish Development Model] was a reward for voting NRM yet they are supposed to pay back such that other Sacco members get a chance to take the money.

President Museveni: The Parish Development Model is not the only way out of poverty. We also have Emyooga and have identified four sectors for wealth and job creation: commercial agriculture, industry, services and information, communication technology.

Anna Adeke Ebaju (Soroti Woman MP): ...besides the asymmetries, the money being offered is the proverbial drop in an ocean. High capital development is more critical than putting money in people’s hands. What’s the quality of citizens? Can they increase the money that they have been given? Can they be able to be enterprising?