Public Accounts Committee of Parliament has questioned the viability of the Youth Livelihood Programme (YLP) and Uganda Women Entrepreneurship Programme (UWEP), citing poor recovery of funds and rising costs of pursuing beneficiaries who have failed to repay the money.
The MPs raised the concerns during a meeting with officials from the Ministry of Gender, Labour and Social Development to examine the implementation and financial performance of the two revolving fund programmes.
Wakiso Woman MP Betty Ethel Naluyima asked the ministry to explain whether the programmes were still viable and making a meaningful impact, given persistent queries over poor recovery and untagged deposits from local governments held on accounts at the Bank of Uganda.
The Permanent Secretary in the Ministry of Gender, Labour and Social Development, Aggrey David Kibenge, acknowledged that recovery under the two programmes has faced significant challenges, particularly under YLP. He said UWEP had performed relatively better, with recoveries exceeding 60 percent, while YLP had recovered only about 25 percent of the funds disbursed.
Kibenge attributed the poor performance of YLP partly to a significant reduction in its budget after the government redirected funds towards the establishment of 19 youth skilling centres. He said YLP received about 39 billion Shillings in its final major funding allocation before its budget was reduced to about three billion Shillings.
According to Kibenge, the reduction meant that about 36 billion Shillings previously available for the programme was no longer available for its operations, including follow-up and monitoring of beneficiaries. He said the reduced funding also coincided with the COVID-19 pandemic and lockdowns, further disrupting recovery efforts.
He explained that the money that remained under YLP was largely used for salaries and maintenance of the programme management unit at the ministry headquarters, leaving local government officers with limited resources to follow up beneficiaries.
Kibenge also attributed the poor recovery to the nature of youth groups, saying some beneficiaries moved away from their original communities while others abandoned groups that had received funds. He said some chief administrative officers had recently recommended that government consider writing off unrecovered YLP funds.
However, PAC Chairperson Patrick Oshabe Nsamba rejected the suggestion, warning that writing off the money could create a dangerous precedent for other government revolving funds. Nsamba said some beneficiaries appeared to have viewed the funds as political donations rather than loans that were expected to revolve to other groups.
He questioned the amount of money the government was spending on recovery compared to what it was actually collecting. The committee was told that about 25.5 billion Shillings was released for the joint YLP and UWEP programme during the 2024/25 financial year, while recoveries were only about three billion Shillings.
National Programme Coordinator for YLP/UWEP, Winfred Masiko, explained that under the programme guidelines, 80 percent of the funds are sent directly to beneficiary groups, while 20 percent is used by local and central governments for monitoring, verification, technical support, training and recovery.
She said the ministry currently works with 177 local government units, including Kampala Capital City Authority, to implement and monitor the programmes. Masiko said inadequate operational funding has affected recovery, noting that the ministry sends about 400 million Shillings every quarter to local governments to support follow-up activities.
She said the ministry estimates that about 330 billion Shillings remains outstanding and needs to be recovered from previous beneficiaries. Masiko urged Parliament to increase funding for recovery, arguing that without adequate resources, the ministry would struggle to trace beneficiaries and recover the outstanding money.
She proposed that at least 10 percent of the outstanding funds be provided to support recovery efforts, noting that financial institutions routinely invest significant resources in debt recovery. But MPs questioned the economic sense of spending more money to recover relatively smaller amounts.
Mbale City Industrial Division MP Masaba Karim warned that the government could be losing more resources by financing recovery operations than it would save through the money recovered. He said many MPs who interact with communities on the ground know that some beneficiaries are unlikely to repay the funds.
Geoffrey Ochen, the Kioga North MP, also challenged the ministry’s assertion that local governments receive adequate resources for recovery, saying his experience as a former district leader showed that community development officers were often only facilitated to prepare beneficiary files rather than conduct actual recovery operations.
The committee consequently called for a clearer assessment of the money being sent to local governments and how much of it is specifically used for recovery. MPs also questioned how the ministry intends to enforce recovery since the funds were largely given without conventional collateral.
Some MPs argued that the model itself needs to be reconsidered rather than continuing to inject money into a system where recovery remains weak. Some MPs warned that government should not continue “putting good money into bad money” by allocating more resources to chase funds that may never be recovered.
The debate comes as government continues to grapple with the implementation of multiple social protection and livelihood initiatives, including the Parish Development Model, which was introduced partly to consolidate government interventions targeting household income and poverty reduction.
Kibenge said the government had previously considered collapsing YLP and UWEP into the Parish Development Model, but cabinet allowed some funds to remain under the two programmes to support recovery and replenish funds for local governments that performed well. From 2022/23, the two programmes were therefore managed under a joint programme management arrangement.
The PAC committee has now called for clearer accountability on the outstanding funds, the cost of recovery and the effectiveness of the programmes before government commits additional resources to the revolving funds. The MPs warned that any decision to write off the outstanding money could undermine the principle of revolving government funds and encourage beneficiaries of future programmes to treat public financing as grants rather than repayable support-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
