KAMPALA, April 20, 2026 — The Parliamentary Committee on Finance, Planning and Economic Development has called for an urgent review of the Parish Development Model [PDM] funding structure, warning that its uniform allocation risks undermining the programme’s effectiveness.
The PDM was launched in February 2022 to transition Ugandan subsistence households into the money economy through parish-level planning and revolving development funds. Each parish is currently allocated at least Shs 100 million for production and enterprise support.
Presenting the committee’s report during a plenary sitting last week, the Committee Chairperson, Amos Kankunda, said the model fails to account for disparities in population size, land area and poverty levels across different parishes.
“The committee observed that the current design assumes that parishes are relatively homogeneous, yet they differ significantly in land size, population and poverty levels. A uniform allocation of Shs 100 million per parish therefore results in unequal financing per capita and per poor person,” Kankunda told the House.
He warned that, while the model offers simplicity in implementation, it risks spreading resources too thinly and weakening impact in high-poverty areas.
“This approach undermines the principle of equity and may blunt the programme’s transformative potential in areas with higher poverty and vulnerability,” he added.
The committee also noted that the government already has sufficient data, including from the 2024 National Housing and Population Census, which could be used to design a more targeted allocation formula based on poverty levels, population size and vulnerability indices.
“We already have sufficient data to design a more responsive and equitable allocation formula. What is required is to align resource distribution with actual need,” Kankunda said.
Members of Parliament recommended that the Ministry of Finance, Planning and Economic Development [MFPED] revise the PDM funding formula to reflect these disparities and present a revised model ahead of the 2027/28 financial year, complete with simulations showing redistribution effects.
The committee further urged the government to strengthen interim support measures, including extension services and financial literacy programmes, particularly in poorer parishes.
Several politicians have previously raised concerns over the uniform funding approach, citing differences in population density, land area, and variations between urban and rural settings.
The programme is reported to have covered the entire country, with more than Shs 3 trillion disbursed over the period.
Last month, the Ministry of Local Government convened district and other local government officials, including production officers, commercial officers, Chief Administrative Officers and PDM focal persons, to chart a way forward for implementing the recovery programme.
Parliament also heard that PDM fund recovery has not yet commenced in several districts, while in areas where it is under way, returns remain low.
The committee report further highlighted inefficiencies in externally financed projects such as the Generating Growth Opportunities and Productivity for Women Enterprises [GROW] and Investing in Infrastructure and Tourism for Economic Transformation (INVITE) programmes, citing delays in implementation and low absorption of funds, which continue to attract commitment fees.
“We continue to incur unnecessary costs due to delayed utilisation of funds. This calls for improved project readiness and execution before loans are contracted,” Kankunda said.
In the same report, the committee raised concerns over a sharp rise in domestic debt roll-overs, warning that the government is increasingly borrowing to repay maturing obligations.
Kankunda noted that domestic refinancing is projected to rise from about Shs 10 trillion to nearly Shs 14 trillion in the 2026/27 financial year, signalling mounting pressure on public finances.
“This means government is increasingly borrowing to pay off maturing debt, which raises serious concerns about sustainability,” he said.
He added that, although domestic revenues are projected to increase from Shs 37.2 trillion to Shs 44.1 trillion, a growing share is being absorbed by debt servicing costs, reducing fiscal space for key programmes.
“As domestic debt expands, interest payments are also increasing significantly, which reduces the fiscal space available for priority programmes,” Kankunda said.
The committee recommended improved debt management strategies, including reducing reliance on short-term domestic borrowing, extending debt maturities, and strengthening domestic revenue mobilisation.
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