Tuesday, June 30, 2015

THE YOUTH LIVELIHOOD PROGRAM, AN INTERESTING CONCEPT


He was going to set me straight. Make me see the error of my ways. Pius Bigirmana, the permanent secrteray in the gender ministry.

The point of contention was an article I wrote last week which in his words, “mixed the sheep with the goats.”

The offending article was on report by Makerere University’s Economic Policy Research Centre (EPRC) on the Youth Venture Capital Fund (UVCF). The sum total of EPRC’s report was that UVCF had fallen short of expected outcomes of loan disbursals and job creation. I referred to the Youth Livelihood Programme (YLP) in passing but continued to write as if the ills that had befallen the UVCF were shared by the YLP.

My apology was brushed aside as Bigirimana set upon setting the record straight.

The UVCF is managed by the finance ministry while the YLP is managed by the gender ministry. And that is not the only difference. UVCF was supposed to lend money to young entrepreneurs through the commercial banks. Unfortunately, while not included in the original design, collateral requirements appeared and one year grace period disappeared. Invariably the majority of youth failed to qualify or cope.

"The YLP on the other hand offers interest free loans – at least for the first year, requires no collateral and is guaranteed by groups of the entrepreneurs....

It did not take me long to see the error of my ways.

But I was not going down quietly.

Isn’t this just another program that will go the way of other programs like the Entandikwa with money dispensed and little to nothing achieved, I asked.

“There is a difference,” he did not thunder. “There is conceptual clarity about the program and this shared by the implementers and the youth groups we are working with. Secondly there is inclusiveness and ownership. The youth are involved in the design, approval, implementation and monitoring of the projects.”

Besides he said, the project is demand driven. It provides financial support, skill development and is institutionally backed.

And finally Bigirimana said, there is passion. But surely you can design passion into a project. “No you cannot. But when you sentisize the people and they see the benefits, they defend it passionately.”
More than sh250b has been budgeted for the project over five years, sh54b has already been disbursed since January last year and an additional sh35b is planned for this year. Is this enough to reach all the country’s youth?

“We require substantially more resources. In Wakiso 400 groups applied but we had only enough resources for 120 groups and the pattern is replicated around the country.”

It’s too early in the project but how do you measure success at this point. “So far sh516m has been repaid out of the sh38b disbursed.”

I clearly looked unimpressed because he continued, “This loans are for three years and are interest free in the first year after that an interest payment of 5 percent is imposed. It’s a revolving fund so repayment is good so it can be ploughed back into the fund.”

Bigirimana thought defaults would be low because groups guarantee the loan and it’s in the interest of the whole group that they have a good credit rating.

"They also have surpassed their expectations in disbursement of funds. They initially planned to reach 50,000 beneficiaries by the end of June but are now servicing 71,866...

I pulled out my ace in the hole. So how do you respond to criticism that the beneficiaries are slanted towards one political side over another?

He did not miss a beat. “This program has no religion, no tribe, no political side because beneficiary selection is not based on this.” In fact he added, that if he as the accounting officer of the ministry heard of such shenanigans he would veto a decision to deny or approve an application.

He had to run – literally, they have “health run” on Friday evenings at the ministry and he is involved.

The program was officially launched in January 2014 has 5,507 beneficiary groups in all the 112 districts of Uganda. Just under half the sh38b disbursed has gone to agricultural projects, a quarter to trade and the rest distributed in service, vocational skills, ICT and agro-forestry among other projects.
Given the programs design it can go on into perpetuity.

I am always suspicious of government interventions in the private sector. Governments by their nature are geared towards celebrating inputs but pay little attention to the out puts. The private sector thinks in diametrically opposite terms.


With YLP it’s hard to argue against the design of the project and the early successes. It is too soon to declare the YLP a roaring success but clearly progress has been made.

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