Report No. PID10211 Project Name Uganda-Northern Uganda Social Action Fund Region Africa Regional Office Sector Social Funds Project ID UGPE2952 Borrower(s) GOVERNMENT OF UGANDA Implementing Agency Address TASK FORCE OFFICE OF THE PRIME MINISTER Address: OFFICE OF THE PRIME MINISTER, P.O. BOX 341, KAMPALA Contact Person: MR. TIMOTHY LUBANGA Tel: 256-41-251031 Fax: 256-41-341139 Email: Environment Category F Date PID Prepared April 13, 2002 Auth Appr/Negs Date February 12, 2002 Bank Approval Date July 2, 2002 1. Country and Sector Background The 2001 Uganda Poverty Status Report (UPSR) indicates that about 35% of the population still lives below the poverty line, and the average per capita income in Uganda is only now approaching the level achieved in 1970. The report also acknowledges that in spite of a clear and impressive decline in poverty (headcount index) of over 209 over the five-year period from 1992 to 1997, significant regional disparities in poverty persist. The Northern region has the highest incidence of poverty at 66%, compared to the Central region's rate of 20%-. UNDP's Human Development Report (HDR) 2000 shows that though the human development index (HDI) has shown significant improvement for Uganda and now stands at 0.508 nationally, the rates for the Northern (at 0.418) and Eastern (at 0.480) regions are still below the national average (Central is 0.559 and Western is 0.479). The report further indicates that of the bottom 10 districts with the worst indicators, nine (Moroto including Kapiripirit; Kotido; Kitgum including Pader; Arua; Adjumani; Kumi; Katakwi; Nebbi and Moyo) are found in the Northern region. The adverse effects of insurgency and war are largely to blame for this situation. Further, as pointed out in the PRSP, poverty among the largest group of the poor in Uganda - subsistence food crop producers - declined only marginally during a five year period - from 64% in 1992 to 62% in 1997. This section of the population constitutes the majority in districts in the Northern Region.To gain a better understanding of what poverty means in Uganda, the Government has supplemented household and service delivery surveys by participatory poverty assessments over the past three years. Results indicate that in addition to material or income poverty, there are significant non-economic dimensions to poverty that need to be addressed. Specifically, the poor in Uganda are concerned with the lack of access to basic services (health care, education, safe water), land, and production inputs. They are also concerned about insecurity (in terms of the presence of rebel activity, cattle raiding and theft) which, according to the UPSR 2001, is "the single reason why poverty has persisted and increased in some parts of the Country. It (insecurity) has left behind dysfunctional family life systems that have suffered declines in economic productivity, and increased ill-health". In addition, corruption persists. The combination of insecurity and corruption not only increases the cost of doing business, but has a broader detrimental effect of constraining the access of the poor to public services.Insecurity, governance problems, and capacity constraints have combined to discourage productive and social sector service delivery in the North. Thus, insecurity in the Northern Region has become both a cause and consequence of poverty. On the basis of available studies, the North and the East are characterized by the poorest indicators in health services, education, water supply, transport and communications:- n The Human Development Index (HDI) for 2000 indicates that 41.3t of the population in the Northern Region is not expected to survive to 40 years compared to the national average of of 36.1- (Central is 33t and Western is 36.1%).n A total of 30% of the population is illiterate, with the Northern region registering the highest rate of 39% compared to 339 and 19 in the Western and Central regions respectively. n 26% of the population does not have access to health services while the rate is the highest in Northern Region at 35% compared to 30% and 20% from the Western and Central regions respectively. While 20% of the total child population had diarrhoea, 27% and 23% of children in the North and East respectively had diarrhoea (UDHS 2000/01). According to 1991 HH survey, about 98% of the women and 959 of the men in the region were subsistence food crop producers, which is the main source of their livelihood, followed by remittance from relatives and friends. Subsistence levels have further declined in Karamoja and Acholi sub-regions and among the core-poor across all sub-regions. This is partly due to insecurity, lack of agricultural services, and long spells of drought. Remittances from friends and families have been affected by retrenchment from the civil service, particularly the army (Acholi sub-region) and the general decline in the economy. The traditional coping mechanisms have been stretched to the limit, hence the need to design interventions that directly support the poor and core poor. Hitherto, the centralized nature of government service delivery has hindered increased access to and utilization of public services. Decentralization is at the centre of the 1995 Constitution and the Local Government Act of 1997 was passed in order to bring services closer to the beneficiary communities. However, based on experiences to date, the Local Government Act of 1997 is being revised to capture the need for deepening decentralization. The project is being designed at a time when it can facilitate this decentralization and allow for an implementation process, jointly with the Local Government Development Program (LGDP), that will empower the poor to act within the framework of this Local Government Act.Besides developing a decentralized approach to tackling poverty, GOU has adopted the Poverty Eradication Action Plan (PEAP) as its medium term strategy for economic development and poverty reduction. The PEAP was presented to the IDA and IMF Boards as the Poverty Reduction Strategy Paper (PRSP). The PEAP provides strategic approaches developed through comprehensive sector-specific plans, and through consultation with districts and the communities. The Government, through the Local Government Development Program (LGDP), is pursuing a participatory approach that is advocating the active involvement of beneficiaries, NGOs -2 - and the private sector. NUSAF will foster and pursue this same approach by focusing on stimulating community demand, direct financing to communities, private sector as well as CSOs, and ensuring that sectors and local authorities appraise, approve and quality control sub-projects. 2. Objectives The Northern Uganda Social Action Fund (NUSAF) will empower communities in Northern Uganda (18 districts located in the North and East) by enhancing their capacity to systematically identify, prioritize, and plan for their needs and implement sustainable development initiatives that improve socio-economic services and opportunities thereby contributing to improved livelihoods by placing money in the hands of the communities. The proposed project complements Government efforts to reduce poverty by targeting eighteen districts (located in the North and East), where development has been hampered by local and cross-border conflicts. Through community action, leadership development and resource mobilization, the process will strengthen the on-going peace processes in the region. Through NUSAF, vulnerable groups (including demobilized, ex-abducted, and unmployed youth; youths whose education was interrupted because of the long civil strife; female headed households; orphans; and others) will be mobilized to join mainstream development processes based on community accountability and improved governance. The process of over-coming underdevelopment through community action, leadership development and resource mobilisation will strengthen the on-going peace processes in the region. Through NUSAF, vulnerable groups (including, among others, the youth who have directly been affected by violence and civil strife) will be mobilised to join mainstream development processes based on community accountability and improved governance. The proposed NUSAF will be part of Government's efforts to ensure that the North is able to "catch-up" with the rest of the country in the development processes. It will make it possible for communities to articulate and prioritize their specific needs, and manage processes and thus enhance good governance for peace and development as underpinned in paragraphs below. 3. Rationale for Bank's Involvement Under the Comprehensive Development Framework (CDF), the Bank's strategy focuses on improving the quality of life and incomes of the poor under the PEAP. The Bank has also experience in working successfully with social funds during the last decade, in developing the basic concept for NUSAF, the Government has taken into consideration the Bank's experience as well as other in-country project experiences supported by other donors.A social fund requires technical expertise in various sectors. It also requires close donor coordination on resource mobilization and substantive implementation and policy issues. The project, as a demand-driven approach to development, complements the supply side stimulated by the Poverty Support Reduction Credit (PSRC) and the Local Government Development Program (LGDP). It will enable districts to develop capacity for the implementation of programs initiated from the bottom and top. The Bank's technical expertise in general, as well as specific on-going IDA financed operations in relevant sectors such as education, health, roads water and sanitation, puts it in a unique position to assist the Government in addressing these cross-sectoral issues. Regarding donor co-ordination, the Government unequivocally has taken the lead, but is hoping for Bank support to coordinate and leverage additional resources if necessary. - 3 - Finally, the proposed NUSAF is linked to fiscal and macro-economic measures, Local Government restructuring, and civil service reforms, in which the Bank is a key stakeholder. 4. Description ComponentSectorIndicative Costs(US$M) . of TotalBank-financing(US$M)9, of Bank-financingi. Community Development Initiatives [CDI] SF 97.20 72.8 68.5 68.5 2. Vulnerable Group Support [VGS] SF 22.30 16.7 20.0 20.0 3. Community Reconciliation and Conflict Management [CRCM] 2.8 2.12.50 2.504. Institutional Development:(a)NUSAF Management Unit (b) Capacity building and training - communities, LAs, CSOs/NGOs and other agencies (c)IEC Initiatives(c)M&E (including MIS)SF 11.20 8.49.00 9.0 Total 133.50100.0100.00100.OTotal Project Costs 133.50 100.0100.00 100.OInterest during construction Front-end fee Total Financing Required 133.50100.0 100.00 100.0(1) Community Development Initiatives [CDI]--Total US$97.20m (IDA US$ 68.5m) millionThe CDI component would finance community-based, demand-driven initiatives that fall within specific sector policies to construct and rehabilitate small-scale socio-economic infrastructure in gender sensitive and environmentally friendly manner, guided by a sub-project menu. Communities would be facilitated to participate in identifying and prioritizing their needs, followed by planning, implementing and managing sub-projects through CSOs, extension workers, private individuals and agencies whom they will directly contract. The sub-project menu would include rehabilitation and construction of health units, primary schools, latrines and community centers, water points, afforestation, community roads, grain, storage, markets, etc. (a negative list would include big complex infrastructure, sewerage systems, income generating activities and micro-credit). It is estimated that about 30t of population (2.5 million people) will be reached by the component within 5 years in the project area..(2) Vulnerable Groups Support Sub-Projects [VGSI--Total US$ 22.30m (IDA US$ 20.0m) millionThis component targets vulnerable groups; LAs, CSOs/NGOs/CBOs, and institutions that work directly with these groups. Through a participatory process, vulnerable groups and CSOs working with such groups will be identified and supported to develop strategies likely to contribute to poverty alleviation. The project will finance facilitation of target groups such as IDPs, children who have been abducted by various armies (ex-abductees); people affected by and living with HIV/AIDS, orphansand foster parents, female headed households, etc. by individuals, extension staff and CSOs that will have been identified. (3) Community Reconciliation and Conflict Management Component [CRCMI--Total US$ 2.8m (IDA US$2.50m) million The component will support and test out community-driven approaches to peace and development by targeting traditional leaders, local elected leaders and religious leadership to review and strengthen on-going peace building processes using traditinal and non-traditional approaches. These activities will particularly focus on the three sub-regions of Karamoja, Acholi and West Nile, building on the works of CSOs, traditional authorities and religious leaders in the area. It will support activities at the local level, particularly the role of traditional institutions and CSOs in conflict resolution and management. It will also include integration of "guns-dropped-outs", child-soldiers and abductees through community-based approaches, counselling and psyco-social support to returnees, etc. to local communities. These communities and groups would subsequently benefit - 4 - from the CDI and VGS sub-projects. (4) Institutional Development Component--Total US$11.20m (IDA US$ 9.0m) million (a) Capacity Buildilng: This sub-component will support capacity building and training for various stakeholders, including - communities, extension workers, social and political leaders, CSOs and other partner organizations, concerned GOU and NUSAF staff, and community facilitators (CFs). (b) Information, Education and Communication (IEC): IEC will seek to inform and educate the concerned stakeholders on the objectives, processesand activities of the project and the roles of the different actors as well as obtain and transmit from stakeholders their views and responses to the project demand. Equal access to information is a key element to community empowerment, transparency and accountability. This upward, horizontal and downward folow of information is critical for ensuring that the project ojectives are upheld. Success of the project will be measured by how much and how timely information communities accessed from and transmitted to the various actors as well as from their own peers by way of shared experiences.(c) Monitoring and Evaluation (M&E): Effective M&E arrangements will be integral to project desing and implementation. Appropriate monitoring indicators will be developed and a Management Information System (MIS) will be designed that will assist in tracking the progress of the project. 5. Financing Total ( US$m) BORROWER $13.30 IBRD IDA $100.00 LOCAL COMMUNITIES $20.20 Total Project Cost $133.50 6. Implementation A technical support NUSAF Management Unit (NUMU) will be established and preferably located in a suitable town inthe North to oversee the implementation of project activities. The Management Unit will also have a small presence in the Office of the Prime Minister in Kampala to maintain contact with various national-level agencies and the NUSAF Steering Committee - comprising of government, civil society, and private sector representatives. The three project components will require a region-wide IEC strategy, Monitoring and Evaluation, and affective Management Information Sytem - all of which will require the deployment of appropriate staff in the Management Unit. There will also be district-level staff (Technical Officer and Accounts Assistant) to facilitate interaction between Community Project Management Committees (CPMCs) and district-level sectoral officers during project preparation, appraisal, and implementation. The multi-sectoral District Technical Planning Committee (DTPC) and Sub-County Technical Planning Committee (STPC), which are already in place, will be facilitated to provide appropriate integration and coordination of NUSAF activities into the working of Local Authorities and technical agencies representing sectoral lines ministries, as well as to define the role of NCOs and CGOs.At the community level, CPMCs, made up of elected stakeholders (with an equal gender representation), will have the leadership role during project design, appraisal, implementation, and monitoring. The CPMCs will open project accounts and receive, disburse and account for resources raised by communities and allocated by NUSAF to the project. In the course of - 5 - implementing NUSAF, there will be need to procure short-term expertise to address various bottlenecks to implementation at community, district, and regional levels. There will also be need to procure some office space as well as equipment, vehicles, office supplies and operations and maintenance using project funds to facilitate effective implementation in the districts. The wide range of procedures and processes necessary for the effective implementation of NUSAF will be contained in an Operational Manual and supporting handbooks. These manuals will be developed and tested during a pilot "trial-blazing" phase to be funded through a Project Preparation Facility. 7. Sustainability Sustainability issues are also tied to the complementary roles played by other programs like LGDP, Plan for Modernization of Agriculture (PMA) and National Agricultural Advisory Services Project (NAADS). The integration of NUSAF activities into local government planning process will also contribute to sustainability. The current macro-economic stability and the overall PEAP place greater importance on the Government's role in supporting basic social and economic services, and these also factor in positively. Systems and procedures will be developed as part of the project's Operational Manual, and training of project and key Government staff will be carried out prior to project effectiveness to ensure that sub-projects with a low probability of sustainability will not be undertaken, and that community groups and implementing partners with a poor track record are denied additional sub-projects. 8. Lessons learned from past operations in the country/sector Social funds and decentralized community-based activities are not new in Uganda. Since NUSAF will operate largely in a post-conflict situation, there are lessons to be learnt from the Community Action Program (CAP) West Nile (1992 to 1999), WEP West Nile (1996 to 1999), the District Development Program (DDP) (1998 to-date) and European Fund (EDF) micro project, which operated under conditions of conflict. Central management of project activities emerged as one of the challenges in DDP. The strong 'institutional focus' and reliance on public sector nature of the approach led to delays in financial transfers, accountability and delivery of needed services (see 3/14/2001 Kotido Evaluation page 94-5). The local government system, particularly in the North, lacked adequate capacity and personnel to undertake accountability responsibilities housed within it. These problems seem to have been overcome in the CAP West Nile, where there was autonomy in the management system and where funds were disbursed directly to the communities. Under the CAP West Nile, where the MU were field based both at regional and district levels, some of the challenges reported include delay in implementation as a result of poor technical support from line ministries to the community. Another pertinent challenge that reflects the post-war situation is how to overcome delays in the implementation of projects through strict adherence to agreements, closer supervision by program officers, and reward to communities that adhere to planned project times. Social funds emerged in the 1980s in response to emergency situations - natural or man-made disasters, external shocks, deep structural changes in the economy, or sometimes a combination of these factors. Lessons and experiences various Bank assessment (similar) projects, numerous ICRs, studies and evaluations have been incorporated in the design of proposed projects. The main lessons that emerged are that NUSAF should start with a pilot phase to test and - 6- finalize procedures; respond to demand and systematically involve clients/stakeholders; mobilize local resources and build local consensus; set clear targets; ensure that capacity building and infrastructure development remain complementary in the long-run without conflicting in the short-run; use a technically sound implementation unit to coordinate across sectors and administration structures; keep short-term objectives distinct and develop a long-term perspective; define criteria that are pro-poorest members of the community, and safeguard autonomy, transparency and accountability. 9. Program of Targeted Intervention (PTI) Y 10. Environment Aspects (including any public consultation) Issues : The poor and the most vulnerable sections of the population are often the most dependant on renewable natural resources for income generation and risk aversion. Experience has shown that sub-projects eligible under the NUSAF are normally small in sizes and with minimal requirement for environmental protection override the requirement for environmental protection. In this context, NUSAF will play an active role in promoting IEC campaigns, carrying out sensitization workshops and training. Community members and all other stakeholders will be trained in the environmental impacts of developmental projects, environmental indicators and possible mitigation measures. Government regulations require that environmental assessments be conducted for each development project. The MTF has involved the National Environment Management Authority (NEMA) in defining how the later will build district capacity to guide and facilitate communities to carry out assessments. For all the NUSAF sub-projects to be funded by project, the potential environmental impacts will be identified early during the preparation stages using simple checklists, and measures to avoid or minimize impacts will be incorporated into the the sub-projects design.The majority of demand-driven community sub-projects will be of a comparatively small size. It is expected that the focus of these sub-project will be in the social sectors, with resulting negligible negative impact on the environment. Sub-projects in the areas of water and sanitation, public health, and forest will likely have a posititive impact on the environment. The final environmental assessment will be made on a case-by-case study basis. NUSAF will play an active role in promoting and supporting sub-projects aimed at improving the management of natural resources by poor communities. The project will have a very clear sensitization and capacity building program related to environmental issues supported at the district level by the District Environmental Officers. The design of the majority infrastructure sub-project for financing will allow for an effective environmental screening, evaluation and supervisory mechanism for environmental impact. NUSAF will, through the DEO, other trained district staff and CSOs trained by NEMA:-(i) include environmental assessment during participatory appraisal process with the communities, and monitor the criteria for sub-projects by way of a checklist developed with the communities;(ii) carry out environmental assessments;(iii) raise community awareness over environmental issues; and(iv) finance community-based environmental projects like afforestation, energy saving stoves, etc, as determined by the relevant communities. 11. Contact Point: -7- Task Manager Norbert 0. Mugwagwa The World Bank 1818 H Street, NW Washington D.C. 20433 Telephone: 5393-236 Fax: 5393-267 12. For information on other project related documents contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-5454 Fax: (202) 522-1500 Web: http:// www.worldbank.org/infoshop Note: This is information on an evolving project. Certain components may not be necessarily included in the final project. This PID was processed by the InfoShop during the week ending May 3, 2002. -8-