Making the Parish Development Model work for all Ugandans including the educated youth

by Admin · Published July 1, 2022 · Updated May 2, 2024

The Parish Development Model is supposed to get Ugandans out of poverty by easing access to credit for certain categories of Ugandans including the educated youth not formal employed. It is advertised as a catalyst for economic development, poverty eradication and job creation. However it has been plagued by corruption, poor planning and political interference and will soon die a miserable death like all poorly designed and mismanaged poverty eradication and youth empowerment programmes due to the following reasons

PDM does not put in place sufficient safeguards to prevent and detect corruption. One of the biggest failings of all the previous programmes was corruption. Public servants in charge of the programmes plundered the meagre resources allocated to the programme. They practiced favoritism and politicized the programmes. Do I need to be an NRM supporter or connected to NRM to access this money?. What is being done to prevent kickbacks and other bribes to access the emyooga money?. How are the staff in charge of emyooga recruited? Are the staff children of the big wigs? Are they recruited on merit through a transparent process? Who is in charge of emyooga? Are they the same thugs and crooks that plundered the previous programmes? Apparently corrupt public servants at district level are in charge of choosing PMD beneficiaries and to be put on the list of beneficiaries and actually receive the funds they charge a a tax (bribe) of up to 60% of the funds. For example each beneficiary is usually entitled to UGX 1,000,000 but the crooks managing PDM in some districts require kickbacks of up to UGX 600,000 in order to process PDM funds. The recipient of this money is required to refund the money after the two period. After paying a kickback of almost two thirds of the money advanced how do you expect this Ugandan to pay back the full amount advanced.

PDM is not sufficiently funded to make a real difference. Job Creation and investments are capital intensive endavours. Creating a single job can cost as much Ushs 10m and but it can reduce to Ushs 6m per job when done on a sufficient scale. Initially only Ushs 400bn was committed to PDM but it is allehed that it was increased to one trillion per year. This is insufficient funding given than more than 15 million people are either unemployed or under employed. Optimistically, even if we assume the job Creation strategies employed by emyooga are valid, one trillion can create only 100,0000 jobs. We are being very optimistic because most people who receive PDM cash use it for consumption and other personal purposes not necessarily to create wealth or investments and even if they did, the money is not enough to create meaningful jobs. PDM as structured can be best aligned to increasing access to affordable credit not to job Creation. To create one job can cost as much as UGX 10,000,000 yet individuals on average receive less than half of the promised one million.

There’s not sufficient separation between politics and economics in PDM. One of the failures of the previous programmes was politicisation which made beneficiaries believe that the money was more of a reward for support than a credit facility. Due to political considerations, the beneficiaries gambled that the state would not take the necessary action to recover the money. They gambled that the state would not arrest them or sale their property due to the fear of political fall out inform of loss of votes. The beneficiaries were right. They used the money and inputs supplied for their own consumption and the state took no action. There is no indication that the money allocated to PDM is recoverable given that there is no legislative control of the money and its recovery. The deadlines to pay back came and passed and as usual they were arbitrarily extended without regard to the tax payers whose money was used to fund the PDM Loans. The beneficiaries gambled that the money is not refundable because it is a gift for political support and that the politicians are not self destructive enough to demand that these gifts be refunded when Parliament is spending three billion of their taxes daily.

PDM is poorly designed and based on a misconception. What exactly is the theory of change that PDM relies on and is it valid? Yes Savings and Credit Cooperative Societies have potential to provide micro loans to members at affordable rates but they are also prone to fraud. Even if the cooperative Societies succeeded in providing affordable credit how exactly will such small investments create jobs. Even large investments such as factories or infrastructure projects create only a few hundred jobs. For example if I start a small shop using affordable credit under PDM how many jobs can I concievably create or how much wealth can I really accumulate from it? Even if you are lucky enough to receive the full one million allocated for each beneficiary it will not create jobs for anyone other than you if you are bright and informed enough to successfully apply it to a successful business. It certainly will not get you out of poverty and it will certainly not improve your standard of living. To get out of poverty you need an income generating activity that produces a sustainable income to meet your needs and leave a surplus to grow the business or investment that you have set up. Given illiteracy, high birth rate, land fragmentation and poverty a loan of one million shillings minus kickbacks is not the magic card that will get Ugandans put of poverty.

The question then becomes what can we do to make PDM work for Ugandans? According to the Bank of Uganda Financial Capability Survey 2022, out of the 22.8 million working Ugandans, only 1 percent earn more than Shs 1m while 49.2 percent earn less than Shs150,000 per month. Furthermore, the survey discovered that 79.6 percent of working Ugandans have not completed secondary level education and that more than 49.2 percent of working Ugandans earn less than Shs150, 000 per month. These are our children, grandchildren, relatives, friends and neighbors. Every day the problem of unemployment become worse as public officers prioritize enriching themselves. We can take action by simply supporting the creation of the Uganda Job Creation Fund of ten trillion shillings per year instead of misconceived PDM. The Job Creation Fund if funded at the level of ten trillion shillings per year can create two million jobs per year. At such a large scale we can create one job at UGX 5,000,000 and by creating two million direct jobs per year we also close to one million indirect jobs.