Multi Donor Trust fund for productive employment in Uganda
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In recent years, Sweden has played a role in strengthening labor market analyzes and contributed to a dialogue on new and collective initiatives to address labor market constraints in Uganda. The proposed MDTF, brings together the efforts of development partners (WB, UK, Netherlands and potential others) and the Ugandan government (through the Ministry of Fina...
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- B032 - Contributions to multi-donor/single-entity funding mechanisms ,
- C01 - Project-type interventions
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Breakdown of the total amount paid for the entire contribution.
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More about the contribution
In recent years, Sweden has played a role in strengthening labor market analyzes and contributed to a dialogue on new and collective initiatives to address labor market constraints in Uganda. The proposed MDTF, brings together the efforts of development partners (WB, UK, Netherlands and potential others) and the Ugandan government (through the Ministry of Finance, planning and Economic Development – MoFPED) to jointly contribute to large-scale employment and structural and economic transformation of the Ugandan economy. It is not excluded that current donors or new donors will add additional funds at a later stage. The WB is Sweden's agreement party and is administratively responsible for the program. The WB, in turn, has signed agreements with MoFPED, which have been closely involved in the planning and design of the program. The MoFPED will act as a liaison with other government agencies. The program will, as far as possible, be implemented through national institutions/ authorities, research institutions, local business associations, etc., with the aim of building institutional capacity. The fact that the Ugandan government is involved in, and have the ownership of, the program is absolutely crucial to achieving results in the current context. No funds will be channeled directly from WB to the Ugandan Government. The WB has selected the Private Sector Foundation Uganda (PSFU) for the implementation of the program and the Bank of Uganda (BoU) for handling the funds for each component through a so-called designated account (DA), intended only for the MDTF window 3. The PSFU is Uganda's leading body for the private sector sector and is responsible for the RE activities (Recipient Executed activities). The MDTF will be implemented together with the Investment for project Industrial Transformation and Employment (INVITE), funded by International Development Association (IDA). This part will consist of a loan component (96 MUSD) and grant component (104 MUSD), totaling USD 200 million. The MDTF will contribute to a more efficient use of the IDA contribution through advice to, and capacity development of, implementing institutions. The MDTF and IDA contribution will thus have a mutually reinforcing effect, which is of great importance for the results of the program and the catalytic effects it hopes to achieve. The objective of the MDTF is to create formal jobs in sectors with growth potential. It will contribute to poverty reduction by enabling increased employment and income for poor households. The primary target groups are underemployed, unemployed, unpaid workers, self-employed, women and refugees with limited access to productive employment. The transition from low productivity to higher productivity in these target groups will contribute to higher disposable income and improved human capital over time. The program will collaborate with small and medium-sized companies but also larger companies operating in export-oriented sectors with growth potential. It is thus potential growth and employment opportunities that will lead to investments. However, the agricultural sector (and the agricultural industry) will be given priority due to the number of poor people working in agriculture, as well as the importance of agriculture for inclusive economic development, poverty reduction and economic transformation. Particular attention will also be paid to women's role in business and women led businesses. The direct beneficiaries of the program are: 140,000 small and medium-sized enterprises, of which 40,000 are expected to be women-led micro-enterprises, 120,000 refugees and institutions and government agencies. Through multiplier effects, the WB estimates that the program will secure 530,000 jobs and create more than 200,000 new jobs. Geographically, the program will seek to spread the development from the existing southern growth corridor to two new regional corridors.
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Total aid 94,025,000 SEK distributed on 0 activities
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Result
The implementation of the INVITE Project has been delayed over the first years of the project due to delays with approvals, but as the last administrative hurdles are cleared, the path forward can now be forged. Below follows the main achievements for the MDTF Window 3 and INVITE Project so far: - Finalizing of the arrangements for INVITE, with the project becoming effective on November 13, 2023, following GoUs approval. - A World Bank Task Team Leader is now based in Uganda, working to catalyze INVITE The Bank team is also working with GoU partners to get all disbursement conditions met by May 2024. - An INVITE launch event and workshop was held from February 5-6, 2024. The Embassy particiapated in this workshop. - In February 2024, the Export Firm Support (EFS) project, which is supported by the MDTFs Window Three, was formally launched with the participation of GoU, business associations and individual firms. - The EFS project will help exporters and potential exporters, with the assistance of local and international consultants, to identify export opportunities and meet consumer demand through specialized technical assistance and capacity building activities. The EFS project will focus on formal private business entities that are established in Uganda in key manufacturing sectors, including agribusiness. The MDTF has therefore funded the development of an online platform (www.invite.go.ug) to enable firms to submit their applications for technical and financial support more easily. The hard launch of this platform took place on February 28, 2024. Four calls for applications are anticipated over a four-year period. The first call for applications from exporters and potential exporters was recently launched on the portal with a deadline of May 31, 2024. To date, 290 firms have registered on the platform since its inception in December 2022, mostly during the reporting period. - Linked to the EFS project, the MDTF is funding data collection for a survey of potential investors in Refugee and Host Districts (RHDs), which commenced in March. As part of the survey preparation, piloting of firms by telephone, as well as in person, is currently underway to help in the design of the survey and in the training of enumerators. The initial survey phase will be implemented by UMA and will comprise a survey of their members of 1,150 firms. The survey will provide information about the existing investment intentions of Ugandan manufacturers, and gauge the levels of interest in the West Nile in particular. The survey will help inform the selection of agro-industrial sectors and help shape the intervention approach of the INVITE Project. - Window Three Supports the International Finance Corporation (IFC) in Advancing Access to Financing for Smallholder Farmers with US$ 650,000 IFC Advisory Grant. Key achievements: The IFC Advisory supported progress in the following areas during the reporting period: A new collaboration between BoU and the Uganda Microfinance Regulatory Authority (UMRA) has advanced data sharing mechanisms and improved data quality. Significant strides have been made in the use of alternative data to promote access to finance for traders and MSMEs. Two banks (Equity Bank and Centenary Bank) have approved WRF as a means of loan collateral, and two more banks (PostBank Uganda and Housing Finance Bank) are moving towards WRF approval. Training and capacity building of credit bureau institutions have strengthened levels of credit information sharing.
The objective of the MDTF is to create formal jobs in sectors with growth potential. It will contribute to poverty reduction by enabling increased employment and income for poor households. The primary target groups are underemployed, unemployed, unpaid workers, self-employed, women and refugees with limited access to productive employment. The transition from low productivity to higher productivity in these target groups will contribute to higher disposable income and improved human capital over time. The program will collaborate with small and medium-sized companies but also larger companies operating in export-oriented sectors with growth potential. It is thus potential growth and employment opportunities that will lead to investments. However, the agricultural sector (and the agricultural industry) will be given priority due to the number of poor people working in agriculture, as well as the importance of agriculture for inclusive economic development, poverty reduction and economic transformation. Particular attention will also be paid to women's role in business and women led businesses. The direct beneficiaries of the program are: 140,000 small and medium-sized enterprises, of which 40,000 are expected to be women-led micro-enterprises, 120,000 refugees and institutions and government agencies. Through multiplier effects, the WB estimates that the program will secure 530,000 jobs and create more than 200,000 new jobs. Georaphically, the program will seek to spread the development from the existing southern growth corridor to two new regional corridors. The strategy for growth corridors is also reflected in the Ugandan Government's budgetary strategy for 2021/22 as a way of supporting regional justice and poverty reduction.
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