CO-OIE Discretionary for Uganda FY22-23

General

OIE Discretionary support for the country office for period running April 2022 to March 2023 Understanding what the external context changes are Uganda is scheduled to hold elections in January 2021. Campaigns are ongoing, albeit with some violence, and limitation of civic space for free campaigns. The political atmosphere is tense and it’s unpredictable what the situation will be in during and after elections. The operating environment for NGOs is getting more restrictive. Some NGOs being forced to close operations, freezing their accounts and staff being deported purportedly due to engaging in politics. If the situation continues unabated livelihoods in urban and rural areas where agricultural production accounts for 70%, businesses from which many people eke a living could be greatly affected. This may exacerbate poverty and its unenviable socio-economic effects and widen the inequality that Oxfam strives to alleviate. The situation has been complicated by militarisation of police structures, presence of armed civilian/non- state actors in political conflicts, riots under the guise of enforcing COVID -19 restrictions. This might impact on the way Oxfam respondsto anticipated situation. The opportunity is that there are Allies in the civil society that we can engage with to tackle these developments. Continued emphasis on infrastructure development with dwindling support for social services like health and education will continue to impact on disposable incomes of the population leading a large proportion at risk of slipping back into poverty. Public financing is still skewed to public administration; with ever burgeoning local governments manifesting in the form of new cities,sub-counties, and town councils. Such is the situation despite resources for service delivery continuing to dwindle. Uganda’s climate is changing: Between 1900 and 2010, the average annual temperature in Uganda increased by 0.8°C - 1.5°C and are projected to riseby between 2°C - 5°C by the year 2100. Increasingly, the country is experiencing significant adverse impacts of climate change, which include changing weather patterns, drop in water levels, and extreme weather such as floods, prolonged drought, famine and intermittent rains, which in turn exacerbate socio-economic vulnerabilities of communities. Disaster loss and damage is on the rise in Uganda with grave consequences for the survival, dignity, and livelihood of the population, particularly the poor . Climate change exacerbates and amplifies the risk of extreme weather disasters such as floods, landslides and droughts resulting into sporadic displacement of residents to neighbouring districts. Disease outbreaks (Ebola, Covid 19, Livestock diseases) and pestilence including desertlocusts and army fall worms have been frequent phenomena and the intensity is on the increase. This may call for more humanitarian actions in the vulnerable communities. These disasters are more likely to cause low agricultural productivity, and the resultant high levels of vulnerability and increased food prices. Besides climate change impacts on the economy, densely populated areas, especially those hosting refugees will bear the heaviest brunt given increased pressure on fuel wood resources. With the current shifts inclimate variability and a prediction that years ahead might experience climate related disasters (floods or dry spells), small scale farmers, especially women, are less likely to significantly gain from agriculture. Unfortunately, the government has limited capacity to respond to such crises. Oxfam will need to use its already developed capacities to strengthen local actors and government roles. High levels of unemployment (9%) among the working age population and youth aged 18-30 years (13.3%) in the country remain a challenge. many of these have opted for migration in the search for jobs. The perceived job creation from the discovery of oil remainsa mirage, and exploitation has remained a point of contention between the Government of Uganda and the multinationals over their refusal to meet tax obligations. This has impacted on revenue generation that could potentially support better social services. With the large youth population being more tech savvy, and increasingly demanding for a voice in decision-making, tension is highly probable if their concerns are not addressed. Uganda is continuing to experience endless influx of refugees from DRC and Southern Sudan due to incessant conflicts in these countries. With the fragile ComprehensiveR-ARCSS Peace Agreement in South Sudan and relentless Ebola crisis in DRC refugee influx is more likely to continue. Although GDP growth remained strong at 6.1% in 2017/2018, the highest recorded since 2013/2014 when the economy grew by 5.1% , it is projected to steadily increase to 6.73% in 2024. However, per capita growth remains insufficient to propel Uganda to lower middle-income status. Uganda's population was 40.3 million in 2019, with 3% annual growth rate with the majority being young, a characteristic of a country with high fertility levels . With 53.1% of the population being less than 18 years and 3.7% are 60 or more years , implying a working age population of 43.2% (between 18 - 59.9 years), Uganda is yet to realize the demographic dividend because the working age population is still low, coupled with widespread unemployment. Agriculture remains the main source of livelihoods for the majority of the population especially in rural areas and it is one of the most important sectors of the economy, employing 72% of the work force and contributing to 25% of GDP. Agricultural exports are primarily unprocessed due to limited value addition. Subsistence remains rife in some areas due to small holder plots of land thatare highly fragmented as a result of the unrelenting population pressure while in other areas limited resources limit optimal utilization of the land. Relying on agriculture, which suffers from limited availability of market, volatile prices, weather-related disasters, poor quality inputs, lack of value addition, lack of skilled labour, and access to land including displacement risks people'slivelihoods. The country is grappling with a rush for land-based investments which increases land conflicts leading to ordinary poor citizens being dispossessed of their land. Large scale land acquisitions and encroachment on wetlands continue unabated despite prevalence of the laws and institutions mandated to regulate operations on land and the environment. The enforcement of the law protecting wetlands remains selective, leaving the plight of people’s livelihoods in jeopardy. Critical sectors that directly impact on people’s livelihoods will be affected by the diversion of funds to COVID-19 response. In addition, the fear of contracting COVID-19 limits people’s engagement in their livelihood activities. The COVID-19 pandemic has the potential to exacerbate the already precarious situations especially the poverty rate that could increase by 2.7 points which shall put additional stress on an already degradingnational economic situation . The effects of COVID-19 on the economy will also continue to worsen unemployment in Uganda, badly hitting low income earners and small and medium enterprises. The pandemic disrupts the way of life and the supply chain as people fear to contract the disease. The economic situation is further worsened by drivers such as regressive tax policies, lack of pro-poor public spending, inequitable access to productive resources, gender based marginalisation among others; for-example, Uganda’s tax system is regressive with over 60% of the tax burden borne by poor citizens as government targets consumption taxes such as Value Added Tax (VAT) and Excise duty as well as personal Income Tax (PAYE) as a direct tax as revenue sources which is increasingly burdening the same group of citizens, while at the same time Uganda lost (from 2010/2011 to 2016/17) about $3 billion in tax incentives and exemptions–or 16% of its total tax revenues, mostly to multinational companies who don’t pay their fair share of taxes. This widens the inequality gap and because of low revenue collections it has stagnated Uganda’s tax to GDP ratio at 13.8% which is the lowest in theEast Africa region. Covid-19 is increasing stress on community level engagements in crisis affected communities; is likely to increase the care work for the elderly people, and redundancy of the youth (boys and girls) increases risk of exposure to early pregnancies and/or marriages. These may limit the effectiveness of interventions especially humanitarian response due to associated stigma. It will be difficult for staff to meet the recommended emergency response standards; resource mobilisation could be negatively be impacted due to change in global change in priorities, continued loss of employment and livelihoods due to lockdowns in movement and restrictions for certain types of work, and a high possibility of continued exposure to Gender Based Violence and other forms of rights violations. This is even more rife in an economy like Ugandan that is largely informal consisting of small holder farmers, petty traders and craftsmen and women. With COVID induced restrictions on travel and movements, poor people are more likely to be thrown into extreme poverty and desperation since they rely on hand to mouth economy. This will in turn breed conflict and criminality as well as exposure to extreme need for critical services like health Continued prevalence of COVID-19 demands new approaches to work like working from home or working online. Hence, exploring working more with partners becomes a great opportunity; especially strengthening and entrenching our relationships with refugee-led organisations and structures that Oxfam has already mobilised and supported through the local humanitarian leadership initiatives. Social norms, patriarchy and power relations have perpetuated inequality and denied women and girls the opportunities to meaningfully participate in social, economic, and political spheres. We envisage effective participation of women in the democratization process, leadership, decision-making and enjoy their rights and live in dignity when patriarchy is dismantled, and progressive laws and policies are in place. The impediments such as teenage pregnancy, early marriage and women’s lack of control over their bodies and their sexual reproductive health rights (SRHR) continue to stagnate health and socioeconomic wellbeing of not only women and girls in Uganda but their families and the entire population. In Uganda, economic inequalities are widening due to uneven economic growth, unfair tax system (about 60% of the tax burden continues to be borne bythe poor and low income earners), weak governance of Uganda’s tax incentives, policy gaps in Uganda’s Double Tax Agreements with other jurisdictions, and weak implementation of the Public Finance Management Act (PFMA) provisions on amendments of annual Tax laws. Some tax amendment bills for FY 2020/21 have not been passed contrary to section 13 of the PFMA. Other include central government’s non prioritisation of local governments as a key local revenue sources, poor service delivery attributed to corruption in execution of the national budgets, ever growing appetite for external and domestic loans that is continuing to widen the public debt portfolio; weaknesses in the petroleum and mining laws that need urgent review; informal and unregulated artisanal and small scale miners inhibiting their contribution to tax revenue, industry malpractices that exposure to environmental degradation and other social ill; lack of contract and mining and petroleum revenue transparency and accountability, and non-finalisation of Petroleum revenue investment framework and fiscal rules. The high handedness of the state on operations of civil society, low technical appreciation of new political leaders, unlawful and inhuman labour practices, EACOP related human rights challenges around land and environment, human rights and environmental challenges associated with implementation of the Extractives Projects, and failure to seek informed consent prior to using resources Amidst these challenges, there are opportunities that Oxfam can leverage on to mitigate some of the challenges highlighted. For instance the organisation will position itself to play a key role in development of Uganda’s Tax expenditure governance framework; will track stakeholders commitments on aid for domestic revenue mobilisation as per Addis Tax Initiative Phase 2;will be a key player in influencing renegotiation of Uganda’s Double Tax Agreements with other jurisdictions, as well as influencing government to deliver on commitments on investments in human capital development sectors. Further, the Oxfam, will liaise with other actors to influence donor and government accountability on COVID-19 loans to Uganda; EITI Annual reporting in the next 18 months; conclusion on the final investment decision by the IPC expected by end of 2020 that will speed up all the development projects to usher Uganda into first oil; formalisation of artisan small scale miners; policy review and reforms of the Mining’s Act 2003 that gives us an opportunity to participate, and formulation of Petroleum revenue investment framework anticipated to start the operations of the PFMA. 1. Given this context, what will your portfolio look like? What do you envision you need to start now in order to see it bear fruit later, in the further horizons of our work? What has this context meant for what you envision and plan for your portfolio in the next period / 2 to 3-year horizon? The program will aim to strengthen the nexus between humanitarian, development, campaigns and peace. All that will be planned should contribute to realization of more than one strategic objective of Oxfam in Uganda country strategy in a bid to promoting a One Program Approach (OPA). We will proactively look out for this alignment and a checklist will be put in place to track this. It is through the OPA that we will be able to achieve more impact with less resources. It will ensure capacity building of local and national actors and partnering with them to plan and timely respond to shocks and changes withCOVID-19 sensitivity in their communities. We shall focus on enhancing capacities to participate and influence humanitarian policies and practices. We will ensure that Oxfam continues working with others (partners), and involving both women, youth, and men, responds timely and effectively to disasters when they arise. The program will entail mobilizing to influence the humanitarian agenda locally, nationally, and regionally. We will also seek to increase resilience of communities prone to disasters through integration of climate change adaptation, DRR initiatives, COVID mitigation and Peace building in both the humanitarian and development work. We shall conduct community consultation and inclusion of their ideas in programme design in line with their capacities. Efforts will be made to hold governments and donor agencies accountable to their commitments at local, national, and global level. The Oxfam willprioritise update of the context analysis and strategic development to respond to changing context. A review of internal team capacity to address the changes will inform actions for capacity building. Further, Oxfam will invest in strengthening the capacity of CSOs and citizens to become tax justice champions and to influence for a fair tax system at all levels; influence the implementationof prudent public finance management reforms including budget advocacy; strengthen the capacity of investigative journalists on accountable public sending, illicit financial flows and fair taxation as well as personal digital security; strengthen the capacity of local governments to enhance local revenue mobilisation, and strengthen the capacity of citizens and CSOs to demand and hold government and donors accountable. We also envisage to strengthen capacities of civil society organisations to operate in restricted environment; conduct research and investigative journalism on the key issues affecting proper governance of the extractives industry on among others revenue transparency, human rights and environment l rights taxation; will advocate and influence policy formulation and enactment of laws to ensure that they are people-centred to reduce inequalities and are inclusive, and will empower citizens to meaningfully participate in policy formulation and implementation.