Disaster Risk Finance Diagnostic in Uganda

The World Bank’s Disaster Risk Finance and Insurance Program (DRFIP) held a disaster risk finance (DRF) workshop in Uganda on February 7th 2023, where the “Uganda Disaster Risk Finance Diagnostic” report was disseminated to over 30 key stakeholders from Government, civil society, the private sector, and international development organizations. The government included the Ministry of Finance, Planning and Economic Development (MOFPED), Office of the Prime Minister (OPM), Ministry of Gender, Labor and Social Development (MoGLSD), Ministry of Water and Environment (MoWE), National Planning Authority (NPA), and Uganda National Meteorological Authority (UNMA). Private sector players included the Insurance Regulatory Authority (IRA), Uganda Insurers Association (UIA), and the Agri Insurance Consortium; Development partners were the World Food Program (WFP), Uganda Red Cross Society, International Organization of Migration (IOM) and Save the Children International. Civil society was represented by the Center for Policy Analysis (CEPA) and the Civil Society Budget Advocacy Group (CSBAG).   

The DRF diagnostic report was prepared in response to GoU’s request for World Bank support towards developing a shock responsive social protection system. The report found that drought and flood are the most serious perils in Uganda, with significant impact on the economy (1 to 7% of GDP is affected annually) and the most poor and vulnerable households. The impact of climate shocks is worsening due to climate change. Meanwhile readiness to improve resilience remains low. The legal and regulatory framework for DRM and DRF is incomplete, with the DRM bill at draft stage since 2016. Uganda has piloted several risk financing mechanisms including for smallholder farmers, adaptive social protection, and adaptive provision of basic services in refugee hosting districts (the first such DRF innovation for displacement shocks globally). Nonetheless, GoU has very limited prearranged funds and the lack of a national comprehensive financial protection policy and strategy that builds on the country’s risk profile compromises Uganda’s efforts to meaningfully meet the obligations that arise from crises and climate shocks while minimizing threats to development progress and fiscal stability. 

There was consensus and alignment on the key findings and recommendations of the report and acknowledgment by stakeholders of the need to i) Develop a comprehensive financial protection policy and strategy, ii) Complete the DRM legal framework, iii) Strengthen the technical capacity of the MoFPED on disaster risk finance through a dedicated capacity-building program and iv) Improve the capacity of OPM DRPDM on collection and management of disaster-related losses and expenditure. The meeting led to a call for action to adopt the report recommendations, which effort will be driven by both government and civil society– with the Center for Policy Analysis (CEPA) agreeing to draft an action plan. The Insurance Regulatory Authority and Uganda Insurers Association agreed to hold a special meeting of the insurance sector to present the findings of the report to further the agenda. The analytical findings are being used to inform the preparation of the National Uganda Social Action Fund (NUSAF) project, which aims to support sustainable livelihoods, enhance poor and vulnerable households’ resilience to shocks, and strengthen shock-responsive social protection systems in Uganda.