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GROW project funds misallocated, says Auditor General

A significant portion of the money is being directed towards mind-set change programmes, infrastructure development and competitions.

KAMPALA, June 18, 2024 – Parliament’s Public Accounts Committee [PAC] has raised concerns over the utilisation of a Shs 803 billion [US$ 217 million] World Bank grant intended for the Generating Growth Opportunities and Productivity for Women [GROW] Project.

According to a report of the Auditor General, despite the grant’s primary goal of supporting established women-led businesses, a significant portion of the money is being directed towards mind-set change programmes, infrastructure development and competitions rather than directly benefiting the women entrepreneurs as financial aid.

The implementation of the project which started in January 2023 and ends in December 2027 targets female-owned enterprises in all districts, municipalities, and cities across the country.

However, while the Ministry of Gender, Labour and Social Development [MGLSD], and the Private Sector Foundation Uganda [PSFU], the implementers of the project, interfaced with the committee on Monday, it came out that only Shs 133bln was going to the women directly, while some of the funds would be given out as loans at an interest rate of 10 percent.
Committee members stated that although 10 percent appeared small and manageable, government was charging Ugandans interest on money they got as a grant.

Committee Chairperson, Muhammad Muwanga Kivumbi expressed concern at the expenditure distribution revealing that only Shs 133bln of the total grant is allocated to direct financial support for women-led enterprises while the rest of the funds are predominantly used by the Ministry of Gender and the Private Sector Foundation, the project’s implementing partners for secondary activities.

“In simple terms, out of the US$ 217mln [Shs 803bln], the only money out there for women available for them to borrow from is US$ 35mln, this is not acceptable,” Muwanga Kivumbi said.

However, the Commissioner for Labour, Industrial Relations and Productivity at the Gender Ministry, Alex Asiimwe said that the grants will target sectors in which women are predominantly engaged and have potential for scale and job creation.

He added the targeted sectors include agribusiness, manufacturing and hospitality, particularly focusing on foods and beverage as well as crafts and decorations.

The Permanent Secretary in the Ministry of Gender,  Aggrey David Kibenge told the committee that the grant foundation required a holistic approach despite it focusing on women who are already in business.
“The project is structured in a manner that does not address only the issue of credit because we could give women credit and they go and fail to access even that credit in a bank,” he said.

Tororo South County Member of Parliament, Fredrick Angura called for a re-evaluation of the grant’s allocation to ensure that a more substantial portion directly reaches the women entrepreneurs in the country.

GROW project is a Government of Uganda initiative that arose out of the need to respond to the needs of women entrepreneurs who want to grow their businesses, sustain their self-employment and create more jobs. The project’s development objective is to increase access to entrepreneurial services that enable female entrepreneurs to grow their enterprises in targeted locations, including in refugee-hosting districts.

The project is implemented using a “wrap-around” approach comprising a package of integrated services under four components. The package of services aims at empowering women entrepreneurs to grow and transition from micro to small or from small to medium and improve their productivity.

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