This story is the third in a series to showcase the tools, approaches, evidence, and results of more than 300 projects in pursuit of climate-smart development under the Africa Climate Business Plan.
KAMPALA, September 1, 2020 -- Uganda has made significant gains in reducing poverty---the share of people living in poverty fell from 62% to 35% from 2003 to 2013. Still, the poorest 40%, mostly smallholder farmers in rural areas, are constantly responding to drought and other shocks. In the past decade, however, Uganda has been hit repeatedly and hard by pervasive droughts that threaten to undermine the country's development gains.
Droughts in 2010 and 2011 caused damages and losses of $1.2 billion, or 7.5% of Uganda's gross domestic product (GDP). A drought in 2016, due to the El Niño effect, impacted 1.3 million people and decreased 1.5% of Uganda's growth forecast (from 5% to 3.5%). By 2017, more than 10 million Ugandans were food insecure, according to the United Nations.
Uganda's population is predominantly rural, with around three quarters relying on rain-fed farming. Smallholder farmers face considerable climate risks, ranging from floods and landslides in the Elgon sub-region, to drought and dust storms in the Karamoja sub-region. Northern Uganda is particularly at risk because more than 80 percent of households rely on subsistence crops, and other pressures, such as land degradation and insecurity, are common.
The $130 million Third Northern Uganda Social Action Fund (NUSAF III) aims to provide effective income support and build the resilience of poor and vulnerable households in Northern Uganda. The project provides temporary/seasonal employment opportunities for poor and vulnerable households in return for their participation in "labor intensive public works" (LIPW), which include activities to create community assets like rural access roads, tree nurseries, afforestation, soil and water conservation measures, flood control structures, hand-dug wells, and the construction or rehabilitation of market places. The also developed a disaster risk finance (DRF) component to strengthen the financial resilience of the Karamojong to drought.
The DRF component gave 30,000 Karamojong households much-needed funds to support themselves through the disaster. This experience demonstrated that significant development gains are possible when risk financing approaches are built into social safety nets. Along with emergency funding, the NUSAF III public works include building climate-resilient infrastructure for education and health, as well as water sewage and harvesting.
Cash-for-work and food-for-work payment services have supported more than 1.5 million of the poorest adults. In addition, more than 1,700 public works have been built, and 77,000 households have increased the number of days they have been able to work. Each of these results with LIPW can be replicated in other countries with similarly entrenched poverty.
Fast-acting Responses when Climate Risks Strike
Recognizing the acute exposure of communities to climate shocks, the project included an additional $12 million disaster risk finance (DRF) component to develop government systems to rapidly identify and respond to shocks and to finance additional support to vulnerable households immediately following a disaster or shock through an automatic scaling up of the LIPW.
By working for cash or food, many families were able to improve their food and nutritional intake, limiting the degree to which the crisis affected their health and ability to work. The DRF component triggered a faster response, with the government at the center, and helped the government, businesses and households manage the impacts of disaster and climate risk---without compromising sustainable development and fiscal stability.
In addition, NUSAF III worked closely with Uganda's Department of Disaster Preparedness and Response to design and develop an index to capture the earliest signs of drought using satellite data. In a sign of its effectiveness, the data system captured the 2016 drought in Karamoja, triggering a scaling up of the LIPW, and in 2016 and 2017, an extension of the safety net provided support to an additional 30,000 Karamojong households comprising 150,000 people, more than 50% of whom are female. This monitoring has led to seasonal assessments that can continue to influence government response and humanitarian appeals before or as natural disaster strikes.
The World Bank also supported Uganda in developing a transparent decision-making process and a range of estimates for the financial cost of scaling up the mechanism, which supported financial preparedness and rapid response.
Prior to the project, drought response in Uganda had primarily been financed by international donors and delivered through humanitarian and non-governmental organizations, with the government playing a coordination role. This ad hoc, reactive approach presents drawbacks, including delayed responses as agencies scrambled to provide relief as crises unfolded. Together, the drought index developed, clear triggering rules for disbursement of funds, and an insurance provision and contingency fund to finance the response form the backbone of Uganda's approach to climate resilience.
Safety net programs such as NUSAF III have already been scaled up in Ethiopia, Kenya, Mauritania, Madagascar, Mozambique, Lesotho, Niger, and Senegal. The programs represent best practices for triggering early warning systems to deliver critical information from satellite monitoring. Improved monitoring strengthens seasonal assessments, which directly influences government response and humanitarian appeals before, or as, natural disasters strike.