Why strengthening PDM, not termination is smarter path to national transformation

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OPINION

By George Musiime

If there should be one thing that we must all agree on as Ugandans, in my opinion, it should be a transformed society. This same promise is made by Uganda's Vision 2040, of which the Parish Development Model (PDM) is a key program. Whereas PDM is mostly associated with its cash transfer aspect, it actually covers more, from infrastructure and value chain development, financial inclusion, to service delivery.

As the presidential race gathers momentum, with different candidates launching their manifestos and traversing the country conversing for votes, promises made on the campaign trail seem to be pulling the population in opposite directions.

Recently, for example, the government announced more funding for PDM while one candidate promised to scrap the program entirely once elected. There is no doubt that PDM cash transfers are not just susceptible to, but plagued by some of the challenges faced by a list of their predecessors, like the entandikwa scheme, youth venture capital fund, and emyooga, just to mention a few. But with a strategic rethink, the program could still play a fundamental role in delivering the country’s Vision of transforming Uganda into a modern, prosperous society.

At the inception of Vision 2040 fifteen years ago, the government knew two things: (i) that the youth constituted more than half the population and (ii) that raising unemployment was fast-turning this so-called “youth demographic dividend” into the biggest challenge to national economic progress. But not just that, faced with so many young people reaching working age annually, the government also foresaw the near impossible task of creating enough jobs for such a large young population. Thus, job creation has, since the launch of Vision 2040, remained top on the government’s agenda.

Today, PDM, like its predecessors, Emyooga, Youth Livelihood Program and Uganda Women Entrepreneurship Program under the youth venture capital fund, have guzzled up almost 2 trillion Ugandan shillings - but arguably, with unsatisfactory impact created by cash transfers. And while this might sound like a strong premise for the need to scrap the program, the conclusion cannot be said to be entirely true. Authorities in the socio-economic policy area, including the Economic Policy Research Centre (EPRC) point out strategic failure points [not the entire program] that, if addressed, could increase PDM's efficiency. Indeed, one cannot take away the fact that some beneficiaries of the programs have matter of matter-of-factly, realised positive life transformation.

While the government has heavily relied on cash transfers to poor Ugandans with the hope that they can somehow create jobs, wealth and lift themselves out of poverty, often, the money has been used for other purposes other than job creation. Meanwhile, whether PDM cash is used to pay school fees or hospital bills, there is, for the most part, a positive impact on the life of the recipient, even when no job or wealth comes as an immediate result. However, there are a few instances where ill-prepared beneficiaries have lost the money as well.

Generally, a combination of these challenges has underpinned the substantial financial losses due to defaulting, identified by the Parliamentary Public Accounts Committee in 2017 under the Youth Livelihood Program and the Auditor General in 2023 under Emoyoga. In addition, the EPRC also identified politicisation of the programs, and an absence of a sound monitoring and implementation framework; the latter echoed by the auditor general when he revealed that SACCOS were advancing new loans to individuals who hadn’t repaid a requisite 30% of the old loans.

Nevertheless, evidence also shows that the majority of recipients of PDM cash transfers witnessed a change in their socioeconomic standing, even where this was only short-lived. Furthermore, although the possibility of the announcement of new funds being interpreted as a move linked to the campaign strategy of the incumbent, scrapping the program creates its own shortcomings. For instance, does it do justice to those in the pipeline and are due to receive the long-awaited funding?

And what if they were among the few who would have actually transformed their livelihoods with this capital? Where does termination of the program leave their future economic prospects? And of course, the even bigger question is: what becomes of the other aspects that have registered the most success, like infrastructure, and how then would we recover funds already disbursed by the freshly defunct PDM, or do we just add that to the sums that are already non-performing?

To the population, those who have intentions to default and defraud the program might be very welcoming to the idea of terminating PDM, while those counting on the program’s cash transfers as an opportunity to transform their livelihoods might view the same idea as a condemnation to continued economic hardship. The truth of the matter, however, is that for a country where 700,000 young people join the labour force annually, the 5 or 10 who make good use of PDM cash are critical – whether it’s by taking that number off the unemployed list, inspiring their peers or being able to employ one or two peers at a future point.

Staying aware of the reality that unemployment is worst in urban centres, and that many of the urban unemployed have been pushed from the countryside by a shrinking opportunity space, these programs can put emphasis on creating sufficient rural opportunities.

This is not an entirely new concept, and it has been successfully applied elsewhere, from Japan, Korea even in Angola, to revitalise communities under the one village one product program. Piloting a system, for instance, that channels funds into enterprises [new and existing] with high potential to create not just new jobs, but linkages in already existing value chains could significantly minimise financial losses associated with direct cash transfers, deploy locally available resources and populations to spur economic activity.

Policy reversals by new governments are a standout characteristic of, and a major contributor to, limited socio-economic progress in many different young democracies of the world.  Thus, plugging leakages in PDM, not wholesale abolition, will increase program outcomes, create more opportunities and sustain the country’s march towards its vision of a modern and prosperous society by 2040.

georgemusiime@dwcug.org