Uganda Parliamentary Forum on Youth Affairs (UPFYA) Create Employment Opportunities & Improve Youth Livelihoods by Ringfencing 40% of the Public Procurement budget for Youth-led Businesses UPFYA Working Paper No.002 December 2015 - Youth in Public Procurement Introduction Uganda has one of the youngest populations of any country in the world with 78% of citizens under 30. The number of Ugandans between 12 and 30 years is the largest in history and those aged 18-30 years number some 7.4 million. Given that demographic, it is perhaps unsurprising that youth unemployment is widely acknowledged as being one of the country s major challenges. Uganda has one of the highest youth unemployment rates in Sub-Saharan Africa (around 18 percent for youth aged 15-24, and 16 percent for youth aged 18-30). Youth are disproportionately affected by high un- and under-employment, making up over 80 percent of the total unemployed in Uganda. Such a big population, if unproductive, can be a burden to the Ugandan economy unless measures to address the barriers to employment and productivity of this youthful population are taken. Whilst this presents a very challenging picture, there is a demographic dividend from which the country could benefit if it institutes the right policies to harness its youthful population. It is also known that the youth population is very heterogeneous and that it is insufficient to be conceiving of it as a single population. Different categories such as male and female, those living in urban and rural areas, and youth with disabilities, face varying challenges and legislation targeting youth must take account of the diversity. However, in terms of contributing to public procurement, this diversity can be a strength. While government ponders on what to do about the big unproductive and unemployed youth population, it is estimated that a big proportion of GoU expenditure by Ministries, Departments and Agencies (MDAs) goes through procurement of goods and services meaning that deliberate policy and legislation or regulations on how youth can contribute along the value chains in procurement and execution of works and services could make a significant contribution to dealing with the issues of unemployment, income and livelihoods for Ugandan youth. Participation in the value chains could include among others; Provision of skilled and unskilled labour Supply of local construction materials like bricks, sand, stones Local mobilisation of communities and awareness creation on projects Supply of other inputs like culverts on road drainage projects Supply of road furniture like traffic signs Sub contracts depending on capacity Filling recurrent contracts such as for catering and stationery UPFYA Working Paper No.002 Youth in Public Procurement Page 1
Infrastructure development is one of the key priorities for the GoU and indeed in the National Development Plan 2. Trillions have been earmarked for this sector and more continues to flow in this sector through major road, energy and other infrastructure developments. Unfortunately there is no structured process of ensuring young Ugandans reap from these developments through contributing along the value chain yet these projects and investments have not only the potential to employ thousands of young Ugandans but also to empower them with skills that are required for national development and their own advancement even beyond Uganda. It is important that we build capacity not only for local young people`s enterprises to participate in this execution and consequently build their capacity to earn incomes, but also grow businesses, create jobs and contribute to national development. As part of the strategy to contribute to a reduction of youth unemployment the law on procurement should be revised to accommodate youth led enterprises for a certain level of contracts. Better still, bigger companies that are awarded contracts could be conditioned to employ youth and also mentor youth led enterprises. There have been positive examples of this in Kenya and Nigeria and the results are promising. The purpose of this working paper therefore is to: Map key stakeholders concerned with Public Procurement in the different Ministries, Departments and Agencies (MDAs) Generate debate and build consensus around the potential contribution of such an initiative to job creation and enterprise development Explore the technical and practical viability of such a proposal Engage key actors in the public procurement management arena Cause Government of Uganda to give the matter serious consideration Explore revision of policies, regulations and legislation to provide for Youth in Public procurement Do the Youth have the required capacity? (Technical, Financial and Organisational) Such an a decision will require an assessment of the necessary capacities of youth, youth groups and youth led and youth owned enterprises to be able to tap into the opportunities that such a decision will bring. It should however be noted that if it is a deliberate government policy seeking to address a long term challenge in a sustainable manner, capacity building, regulations and guidelines requiring bigger companies to build this capacity will be necessary while ensuring quality and effectiveness is not compromised. Financially such a decision will require banks to develop special products for such groups to finance the small works around the value chain allocated to them this will also come with capacity enhancement in basic contract management, financial management, book keeping among others. In the long run government of Uganda should be seen to be building capacity for the local enterprises to take a big leadership role in public works programmes. Given that procurements and indeed works are at different levels, this will also require different levels of capacity. This decision will not only prepare young people and their enterprises to focus on government projects but will equally enable them to tap in to the private sector and execution of individual projects for Ugandans and non Ugandans both home and abroad given the growing nature of the construction sector. Do we have the right Policy and Legislation for Youth in Public Procurement? Currently there is no policy or legislation that ring fences opportunities for youth in the procurement of goods, works and services by government. There is need to develop policy, regulations and laws that will guide the implementation of such a decision. Public Procurement and Disposal of Assets Authority PPDA is the champion of public procurement and it is expected to lead in developing guidelines to enable this happen. Additionally UPFYA will work with its membership in Parliament to ensure that amendments to such policies and laws are supported. A review of the current PPDA act and corresponding regulations will be necessary in this regard while factoring mentorship and capacity building in the scope of works of major contractors especially the international ones, will be among the positive ideas. 2 Page UPFYA Working Paper No.002 Youth in Public Procurement
Responsible MDAs and their anticipated roles in regard to youth in Public Procurement MDA/Private sector entities/ Associations Anticipated role PPDA As a key procurement regulator it will guide the process of reviewing policy, regulations and laws to cater for Youth in Public Procurement Local Governments LGs These are entities that procure and have the actual projects to implement in the various local governments where many of the unemployed youth come from. This strategy it should be noted if adopted could reduce rural urban migration as well. LGs also moderate licences for private businesses Financial Institutions They will work hand in hand with government to develop products or even manage venture capital provided by government to support youth enterprises to execute public works programmes. Uganda Investment Authority As a custodian of investment policies and a regulator of investors in Uganda, it will develop guidelines for investors in regard to building local capacity, targeting youth and youth led businesses as well as job creation. Uganda Institution of Professional Engineers (UIPE) As a body regulating engineers as contractors, consultants, supervisors, it will develop guidelines and standards for contractors and project managers to ensure youth participate in these processes, building local capacity and developing basic capacity building packages for these groups/enterprises Uganda National Association of Building and Engineering Contractors UNABEC As an association of contractors in works, their buy in and orientation to the big picture in terms of an assured future work force, potential sub contractors will be critical. Office of the Auditor General OAG Ensuring guidelines are followed and entities are reporting on compliance on youth in public procurement provisions Office of the Prime Minister OPM Coordinating to ensure the different government MDAs develop the required operational mechanisms and also report. Ensuring this discussion gets to cabinet level and gets cabinet endorsement. OPM also supervises major programmes like NUSAF, PRDP and others that have major procurements in which youth can participate along the chain. Parliament of Uganda Enact/amend the laws to provide for a legal and policy framework for Youth in Public Procurement. MPs will also play an oversight role to ensure this is implemented. At least a good story from every constituency on progress of this over time Equal Opportunities Commission Mandated to ensure different interest groups have equitable access to opportunities Uganda National Roads Authority UNRA UNRA is a major procurement entity with huge procurements that have capacity to absorb and support mentorship and development of youth enterprises in public works programmes. It is the main executioner of major works in the country Ministry of Gender Labour and Social Development MoGLSD As the line ministry for youth affairs, mobilisation, sensitisation and reviewing the guidelines and policies as well as the regulations to ensure the interests of the youth are taken care of. Ministry of Finance, Planning and Economic Development MOFPED Work with financial institutions to develop packages, identify funds and allocate them to a venture fund to support youth enterprises to execute such contracts/sub contracts. MOFPED will also review guidelines for spending by entities if required to allow accommodation of marginalised groups including funds allocated to capacity building UPFYA Working Paper No.002 Youth in Public Procurement Page 3
Ministry of Local Government MoLG Kampala Capital City Authority KCCA Ministry of Works, Transport and Communications MoWTC Donor agencies/ lending agencies Uganda Registration Services Bureau URSB Guidelines to LGs on Youth in Public Procurement KCCA shoulders the biggest burden of the unemployed youth in Uganda because its the center of attraction and opportunities according to the youth. KCCA will develop simple models to support youth led businesses to provide services to the city, KCCA also has major projects for infrastructure that can accommodate thousands of youth if the guidelines and policies are clear. Moderate licences for such businesses As a supervising ministry for major works and agencies like CAA and UNRA it should provide guidelines and also monitor for compliance Include clauses on Youth participation in the procurement chain in major grants, loans to GoU as a commitment to a sustainable contribution to reduction in youth unemployment Simplified business registration for youth led enterprises especially the rural ones. Next steps Sharing the working paper with the MDAs mapped Securing individual meetings with each of the MDAs Identifying a technical committee to take the process forward Documenting feedback and developing a Policy Paper Identifying the lead Ministry Developing a Concept Paper and Cabinet Memo Getting the Policy and Concept Paper for discussion by Cabinet for comments and or approval/ Cabinet Sub Committee Development of relevant regulations and guidelines Regulations, guidelines, policy and legislation in regard to Youth in Public Procurement Budget allocation for the Works and Transport Sector (billion, Ushs) 4 Page UPFYA Working Paper No.002 Youth in Public Procurement
Summary of Government Expenditure in 2015/2016 (billions, Ushs) The chart below shows how Government has planned to spend its resources to achieve the objectives of the national Budget Facts: National Budget for Uganda 2015/2016 (Trillions): Development Expenditure: (Trillions) Recurrent Expenditure: (Trillions) Debt Repayment: (Trillions) 23,972.25 9,654.72 8,654.65 5,660.88 A snapshot of procurement allocations/expenditures by various MDAs Amount MDA 2012/2013 2013/2014 2014/2015 2015/2016 KCCA 29.957bn UGX55.176bn UNRA 847.357bn UGX1,739.34bn 1.053.69trn 1.079.56trn Ministry of Works 75.57 67.49bn 66.19bn 119.42bn Ministry of Education 152.25bn 152.25bn 150.99bn 156.92bn Ministry of Agriculture Animal Industry and Fisheries 226.34bn 223.44bn 225.44bn 258.23bn Makerere University 20.16bn 20.16 20.16bn 21.11bn Ministry of Water lands & Environment 206.07bn 203.31 234.47bn 247.47bn 62.9billion UPFYA Working Paper No.002 Youth in Public Procurement Page 5
Public expenditure on specific planned public procurements for FY 2015/16 Institution/item Cost Subject Isimba hydroelectricity power project 629.690 billion Construction Karuma hydroelectricity power project 1,605trillion Entebbe airport rehabilitation phase 1 252.875 billion Gulu university 30.76billion Reconstruction UMI, Kampala 23.71billion Kyambogo university 81.16 billion Busitema university 24.84 billion Makerere university 227.33 billion MUBS 57.92 billion Mbarara university 33.41billion Moroto referral hospital 4.11 billion Reconstruction Naguru referral hospital 6.56 billion Arua referral hospital 5.68 billion Fort portal hospital 6.50 billion Gulu referral hospital 7.28 billion Hoima referral hospital 6.43 billion Jinja referral hospital 7.40 billion Kabala referral hospital 5.13 billion Masaka referral hospital 6.41 billion Mbale referral hospital 8.10 billion Soroti referral hospital 5.79 billion Lira referral hospital 5.15 billion Mbarara referral hospital 7.63 billion Mubende referral hospital 7.63 billion District, urban and community access roads 35.57 billion Construction standards and quality assurance 17.37 billion District, urban and community access roads 19.63 billion Urban roads network development 139.20 billion National and district road maintainace 417.93 billion Construction of national high altitude centre in Kapchorwa and design works of Akii bua Olympic stadium in Lira 5 billion 6 Page UPFYA Working Paper No.002 Youth in Public Procurement
Other works in the process of procurement/execution Jinja express highway Kagumba, masindi, Hoima Kyenjojo road Mbale Moroto road Uganda support to municipal infrastructural development African development bank supported markets construction CAIIP roads Entebbe airport extension Muni University Teso University Various seed secondary schools References Annual Budget Performance Report FY 2012/13, Ministry of Finance Planning and Economic Development. Annual Budget Performance Report FY 2013/14 Ministry of Finance Planning and Economic Development. Approved estimate of revenue and expenditure (recurrent and development FY 2015/16) vol 1, central government votes for the year ending 30th June 2016. MoFED, (2015) Know your Budget. National Budget Frame work papers FY 2015/16, Ministry of Finance Planning and Economic Development. National Budget Framework Paper 2014/2015, Ministry of Finance Planning and Economic Development Public Investment Plan (PIP) 2014/15-2016/17, MoFPED Public investment plan (PIP) FY 2013/14-2014/2015, MoFPED Uganda Road Fund (2015), Annual Report 2013/14 UPFYA Working Paper No.002 Youth in Public Procurement Page 7
About UPFYA The Uganda Parliamentary Forum on Youth Affairs was formed during the 8thParliament, as a means of supporting the Youth MPs to be as effective as possible within parliament and at the interface between parliament, government and the youth. It is a platform of MPs interested in youth issues to support their advancement in the policy and legislative realms. Focus is on Policy analysis and advocacy but working with state and non state actors to advance the youth agenda. The UPFYA secretariat based at Parliament Supports the oversight role of MPs on youth work (projects, programmes and interventions) and works as Key Youth Policy conveners for all youth actors at national level working with other youth led and youth focused organisations. UPFYA works as a link to youth and youth actors to the Policy and Legislative arenas. UPFYA s Vision Generations of young people who are empowered, healthy and secure UPFYA s Mission To promote the empowerment of young people and enhance their well-being UPFYA s Mandate is to: Represent the voices of youth in parliament; Advocate and lobby for youth services and programmes; Audit and scrutinize existing legislation to ensure the rights and interests of youths are embedded; Scrutinize budget estimates to ensure increased funding for youth programmes at both central and local government levels; Monitor and ensure that funds appropriated for youth programmes are expedited and properly utilised. UPFYA is intrinsically linked to the NYC as the Youth MPs are elected through NYC electoral colleges, and the two organisations work very closely together. UPFYA also works closely with youth-led civil society and youth-focused NGOs. Such partnership working is a key aspect of UPFYA s strategic approach and aims to maximise the impact of joint activities and maintain a direct link to the youth voice. Raising the profile of youth issues is also at the core of UPFYA s approach not only to advocate for the needs of youth to be met and opportunities provided them, but for youth to be seen as a major resource for national development. UPFYA is built around the Youth MPs, who are key members of its Board as a registered NGO, but currently it has 70 MPs in membership all of whom are passionate about youth issues and are signed up to UPFYA s vision and mission. Based within parliament the implementation of UPFYA s activities is led by a Secretariat comprising staff and volunteers. Link to the National Youth Manifesto 2016-2021 This working paper is linked to the proposal on youth in Public Procurement as one of the measures suggested by youth to contribute to a reduction in Youth unemployment, increase their opportunities for income and improve their livelihoods. www.upfya.or.ug/nym2016 Plot 16-18, Parliamentary Avenue, Room 031, Parliamentary Building, Eastern Wing, P.O. Box 7178 Kampala UPFYA is supported by 8 Page UPFYA Working Paper No.002 Youth in Public Procurement