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Contents Abbreviations andAcr o n m ................ ............. . x ntroduction ......... 1L, The Povery Eradication Action Plan ............. ... ................... 1 1.2 Government's strategy for poverty eradication ................... 2 1.3 Pillars and priorities .............. . ..... .... .... .... .... 5 1 4 Cross-cuttin issues .. ..................... ........... 6 1 5 Roles of the state, the private sector and other partners ................... 8 1.6 The PEAP and international initiatives ................. . ................. 10 1.7 Structure of the PEAP . ................... .... .... .......... 10 2 Poverty in Uganda: Trends and Patterns ..................................... ....... 12 2.1 Incom e, pox ert and inequality .............. .... .. .... ... ...... 12 2,2 W ho are the poor ........................... ....... ... 18 2.3 Structural transformation and poverty reduction ........................... 21 2.4 Human development outcomes .......... ...... ............. 26 2.5 Access to public services and infrastructure .................... 28 2.6 Em pow erm ent ............. .... ............. ................ .. 29 2.7 Policy imp cations .......................................... 30 3 Econom ic M anagem ent .............. ..................................................... 31 3.1 Uganda's growth performance .m n 1.................. 31 3.2 Macroeconomic Management . . ........ ... .......... ........ 34 3.3 Tax Policy ..... .... . . ..................... ... 43 3.4 Financial Sector . .......... . ................ .. 45 3.5 Investment & Trade Policy ................ ........ ...... 47 4 Enhancing producion, compettiveness and incmes ................ 51 4.1 Government strategy for increasing production, competitiveness and icomes ............................ .................. ........ 51 4.2 Boosting production, incomes and competitiveness ....................... 53 iv 4.3 Public expenditure priorities for produnion, competitiveness and incomes . .. . .... .... ...... . . .. ... .................... 92 15 Security lic s ............. ... 99 5 .1 O v erv iew ....................................................................................... 99 5.2 Security and D efence ..... .............................. .. ....................... ............. 99 5.3 C onflict-resolution ... ... .............................................. . ...... 102 54 Disaster Preparedness and Management ...... ...................... 105 5.5 Planning for the aftermath of disaster and insecurity .................. 5.6 Public expenditure implications for security, conflict-resolution and defence ..... ........... ........ .. ........... ....... .... . ...... 114 6 G ood G overnance ..................................................................................... 115 6.1 Democracy. Human Rights and Political governance .................... 115 6.2 Justice Law and O rder ................................ .......... .... ............. .. 12 6.3 Managing the public sector .......... .......................... 127 6.4 Public expenditure priorities for governance ................................. 143 7 H um an Developm ent ................................................................................ 147 7.1 Introduction ..................................................................... ........... 147 7.2 Education and Skills Development .............................. ........ .......... 153 7.3 H ealth ........................................................................ ............. 162 7.4 W ater and sanitation ................... . ..... ............... ....... ........ ...1..... 68 7.5 Social Development Sector ....................................................... 173 7.6 Public expenditure priorities for human development .................... 180 8 Public expenditure to implement the PEAP ...................................... 185 8.1 Introduction .............................................................. ................. 185 8.2 Public expenditure and poverty eradication spending: 1997-2003 ............................. 186 8.3 Criteria for public expenditure allocation .......................... 190 8.4 Funding PEAP expenditure priorities .............................................. 192 8.5 Sectoral allocations ................................................... ................ 198 8.6 Strengthening Budgeting at the Sector Leel ............................. 201 8.7 Rationalising public sector structures ...................... . .......... 200 v 8.8 D ionor support for pubic expenditure ................. ............ ... 211 8.9 Conclusion ................. ............... 212 9 toring and E aluation f the AP .............. ...................... ....... 214 9.1 Introduction ................ ...... 215 9.2 Challenges for monitoring and evaluation ........... ................ .. 216 9.3 Government's strategy for addressing the current weaknesses in the M &E Framework ........................... ............ 217 9 4 Prospects for the Millennium Development Goals ...................... 222 PEAP Reslts and Policy Matrix ............. .......... 224 Annex Table........ ....... . .... ...... ................ 241 E n d N otes ................ . ... ......................... . ............................ ... 255