Uganda is a landlocked country that lies astride the equator and is one of the smaller states in Eastern Africa covering an area of 236,000 km2 of which 82% is dry land, 14% is open water and 4% is a permanent swamp. The country is among those endowed with the greatest diversity of animal and plant species and ranks among the top ten most bio-diverse countries in the world.
Prioritised Finance Solutions
- National Biodiversity and Ecosystem Index to inform Ecological Fiscal Transfer
- Specifically address residual impacts associated to biodiversity related activity in a manner whether the principle of at least no-net loss is implemented and paid by polluters.
- Biodiversity management enhanced through physical hydrological contributions that can be financed by water users.
- Design risk management instruments for operational, reputational and policy risks and establish a platform for fundraising for biodiversity conservation.
The PIR report has been completed after full participation of the stakeholders from Government ministries, departments and agencies, civil society, private sector, academia and media. The PIR further described the perspective of National Development Plans, reviewed the status and trends of biodiversity, the economic sectors and their associated negative and positive biodiversity and ecosystem trends; sector policies, and practices; and described financial and economic drivers.
This review analysed biodiversity financing based on four major ministries of agriculture, tourism, energy and water and environment. The findings revealed that on average biodiversity was allocated about UGX 91 billion in real terms per fiscal year that translates to about 1.2 per cent of the annual budget for GOU. The biodiversity budget allocations were linearly increasing at an average rate of about UGX 7.8 billion in real terms per fiscal year. Furthermore, the distribution of biodiversity budget allocations across the seven strategic objectives was also analysed. Findings revealed that about 46 per cent of the biodiversity budget was allocated for strengthening stakeholders’ partnerships and policy formulation, 14 per cent was allocated for capacity building for research on biodiversity, 13 per cent was allocated for reducing and managing negative impacts while enhancing positive impacts on biodiversity, 18,6 per cent was allocated for enhancing awareness and education on biodiversity among stakeholders, and finally 8,5 per cent was allocated for promoting sustainable use and equitable sharing of costs and benefits of biodiversity.
The Financial Need Assessment shows the detailed costing of the NBSAP (2018-2025) of which the total cost of the implementation of the NBSAP was estimated at UGBX 2,859.9 billion on average, hence Uganda requires about UGX 472.6 billion for biodiversity conservation and management per fiscal year. Furthermore, about 96.6% of the total cost of implementation of the NBSAP II are to implement the objective 3; these costs are related to the restoration of forests and wetlands. The main drivers of habitat loss in forest and wetlands areas are demand for biomass fuel and land for agricultural production respectively. The report will soon be uploaded.
Uganda is in its final stages of the completing the NBFP and it has been developed to provide financing to address all outstanding challenges of biodiversity management in the country. The finance plan supports implementation of the country’s National Biodiversity Strategy and Action Plan, NBSAPII. NBSAP II which seeks to maintain a rich biodiversity benefiting the present and future generations for socio-economic development.
The biodiversity financing solutions have evolved after the continuous review of the FNA, which has led to solutions that can support and enable financing of biodiversity conservation and management in Uganda. Eight (8) solution have been identified:
1.National biodiversity and ecosystem index to inform ecological fiscal transfers
Developing a biodiversity and ecosystem service index will involve four (4) actions and these include: (i) developing a national biodiversity and ecosystem services index; (ii) determining responsibility for biodiversity and ecosystem management whereby; (iii) developing guidelines for and piloting ecological fiscal transfers on how fiscal transfers from all funding sources will be used to achieve the biodiversity and ecosystem services restoration and management in the most efficient and cost-effective manner. (iv) implementing, which will involve at least 10 districts to enable the government to achieve impacts.
2. National Payments for Ecosystem Services programme
As acknowledged in the policy and institutional review, the National Environment Bill (2018) has placed emphasis on scaling up implementation of payments for ecosystem services (PES) to enhance incentives for fragile ecosystem stewards to practice sustainable practices to ensure sustainable supply of ecosystem services. PES can significantly contribute to biodiversity and ecosystem services maintenance by scaling up rewards for communities that provide stewardship. Existing best practice for watersheds and agricultural landscapes have been documented by Shames et al. 2015, and current work by WWF in the Rwenzori Mountain National Park landscape.
3. Scale up bottom-up enforcement for biodiversity and ecosystem management based on community regulatory systems and incentives model
The institutional framework envisaged as adequate for biodiversity and ecosystem management in Uganda was composed of Local Environment Committees (LECs) at village and parish level, and Sub-country and District Environment Committees (SECs and DECs). The first action will be to rationalise (feasibility assessment) and carefully design an institutional and governance framework for bottom up biodiversity and ecosystem conservation and management that is widely adaptable with salient features that fit different regions and communities. In the implementation phase of the financing solution is a bottom-up of enforcement for biodiversity and ecosystem management is based on community regulatory systems and incentives model will be scaled up.
4. Upgrading the ecotourism value chain for Uganda
The finance solution seeks to expand ecotourism activities to all 12 Ramsar sites. The main ecotourism products and services to be developed and/or upgraded are: (i) bird watching, (ii) butterfly watching, (iii) sport fishing, (iv) boat cruises, (v) canoeing, and (vi) scenery viewing.
The specific upgrade investments are onsite investments in facilities, specifically: (a) accommodation as part of the eco-tourism experience conservation ethic and facilities or investments for operation of the ecotourism activity e.g. transport, communication and offices; design of the tourism package comprising the service. Offsite activities are marketing, sharing of benefits and monitoring of performance such as Marketing among others.
5. Upgrading the value chain for natural ingredients, cosmetics and pharmaceuticals
Building reliable commodity supply chains, value addition and trade links allows the stewards of biodiversity and ecosystems to retain confidence that appropriate use, management and conservation of biodiversity and ecosystems can contribute to sustainable livelihood (NEMA/SOE 2018). Out of the 11 bio-trade commodities assessed by the bio-trade project, Shea nut (produces Shea butter) and organic agriculture specifically coffee, cotton and fruits and vegetables, have shown resilience and capacity to maintain positive exponential growth. The two commodity value chains have high potential for contributing to the protection of fragile biodiversity and ecosystems are Shea nut and Shea Oil and Organic agriculture. The global organic agriculture market is much larger, estimated at $80 billion/year. However, the medium term target for Uganda is to export at least $240 million/year organic agriculture products by 2027/28.
6. Rationalise and implement revised charge systems for biodiversity and ecosystem conservation and management
Uganda environmental policy reforms generally occurred between 1994 and 2003. Biodiversity and ecosystem conservation/management laws were formulated in the order of the National Environment Act Cap 153 (in 1995), Wildlife Act Cap 200 (1996), the Water Act Cap 152 (1997) and the National Forestry and Tree Planting Act (2003). The finance solution seeks to rationalise and redesign the charge systems to reflect the current cost of biodiversity and ecosystem services. The charge systems were generally set as fixed amounts of money with only a few exceptions set as percentages. All the proposed eight (8) instruments will be piloted for at least one year. The piloting and subsequent review will allow for integrating of stakeholder concerns and conditions on ground. Proposals will then be made to adopt the revised charge systems in the revised regulations and/or schedules.
7. Financing model for biodiversity conservation for central forest reserves
According to the NFA Strategic Plan 2015 – 2020, the NFA’s financial performance in the previous Strategic plan was rated at 31.5%. The financial performance assessment reflects inadequate funding for CFRs. Out of the financial forecast for the Strategic Plan (2009 – 2014) of UGX 292.7 billion, only UGX 91.9Bn (31.3%) funding was realised. The Forest Investment Plan (MWE 2017), the Forest Landscape Restoration (FLR) opportunities assessment and the Reduced Emissions from Deforestation and forest Degradation (REDD+) have all urged for a cessation of natural forest harvest in CFRs in order to protect the prime forest estate. The finance solution seeks to mobilise optional financing for conservation of biodiversity as well as shift the paradigm of raising funds for the management and maintenance of Uganda’s prime forest estate from continued reliance on wood harvest to investments in ecotourism, bio-prospecting, payments for ecosystem services and PES, and value chains for non-wood forest products.
8. Biodiversity offsets and guidelines for bio-banking system
Biodiversity offset in Uganda emerged as a best practice for integrating the residual values of environment/biodiversity impacts incurred as part of project development. The offset is implementation as the final steps of environmental compliance after implementation of the environmental social impact assessment (ESIA) mitigation hierarchy. Biodiversity offsets gained traction during negotiations for the construction of the Bujagali hydro-power plant (HPP). One of the funders of the project the World Bank signed an agreement that resulted into the Kalagala biodiversity offset. It had emerged during the EIA that the leakage of environmental impact was likely to lead to deforestation of the Kalagala CFR and impacts on Mabira CFR. The Kalagala biodiversity offset was set up to management the residual impacts which were unlikely to be covered in the environmental management and mitigation plan (EMMP).
A bio banking system was proposed to ensure accountability for resources generated but also to create a financing system for long term offsetting, monitoring and reinforcing for fragile ecosystems and biodiversity impacted by economic development activities.