This PER emphasizes the importance ofthe government and its development partners developing asystematic program and a sequenced approach to addressidentified concerns to allow Uganda to achievemacrostability, fiscal sustainability, and povertyreduction. The report is organized in seven chapters.Chapter 1 discusses the macro challenges Uganda faces andhow these are linked to fiscal considerations.Macrostability has largely been achieved with satisfactorygrowth rates higher than in the previous year. But theunprecedented terms of trade shock has resulted in thedecline of total receipts from exports. The reduction offoreign exchange revenues in combination with lower revenuecollections has led to fiscal constraints. Chapter 2 notesthe need to ensure stakeholder contribution to the budgetprocess and to improve quality of budget planning, choices,and predictability. Chapter 3 analyzes the health,education, and water and sanitation sectors and describesthe great progress made in aloocative efficiency --althoughthese sectors are experiencing major challenges in achievingoperational efficiency. Chapter 4 discusses how thegovernment has "commitment control systems (CCSs)"to address the problem of arrears. Chapter 5 identifies howUganda uses tracking systems to identify problems in flow offunds. Chapter 6 discusses the growing challenges for budgetpreparation, execution, and monitoring at the localgovernment level. Chapter 7 draws conclusions.
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