Parliamentary Committee Calls for PDM Funding Structure Review

The Parliamentary Committee on Finance, Planning and Economic Development has called for an urgent review of the Parish Development Model (PDM) funding structure, warning that its uniform allocation of Shs100 million per parish risks undermining the programme’s effectiveness by failing to account for disparities in population size, land area and poverty levels.

Presenting the committee report during plenary on Thursday, 16 April 2026, chaired by Speaker Anita Annet Among, committee chairperson Hon. Amos Kankunda stated that the current design assumes parishes are relatively homogeneous, yet they differ significantly in key indicators, resulting in unequal financing per capita and per poor person.

Kankunda warned that while the model offers simplicity in implementation, it risks spreading resources too thinly and weakening impact in high-poverty areas, thereby undermining the principle of equity and blunting the programme’s transformative potential in areas with higher poverty and vulnerability.

The committee noted that government already has sufficient data, including the 2024 National Housing and Population Census, which could be used to design a more targeted allocation formula based on poverty levels, population size and vulnerability indices.

“We already have sufficient data to design a more responsive and equitable allocation formula. What is required is to align resource distribution with actual need,” Kankunda said.

MPs recommended that the Ministry of Finance, Planning and Economic Development revise the PDM funding formula to reflect these disparities and present a revised model before the 2027/28 financial year, complete with simulations showing redistribution effects.

They further urged government to strengthen interim support measures, including extension services and financial literacy programmes, particularly in poorer parishes.

In the same report, the committee raised concern over a sharp rise in domestic debt roll-overs, warning that government is increasingly borrowing to repay maturing obligations.

Kankunda said domestic refinancing is projected to rise from about Shs10 trillion to nearly Shs14 trillion in the 2026/27 financial year, signalling mounting pressure on public finances.

“This means government is increasingly borrowing to pay off maturing debt, which raises serious concerns about sustainability,” he said.

He added that while domestic revenues are projected to increase from Shs37.2 trillion to Shs44.1 trillion, a growing share is being absorbed by debt servicing costs, reducing fiscal space for key programmes.

“As domestic debt expands, interest payments are also increasing significantly, which reduces the fiscal space available for priority programmes,” Kankunda said.

The committee recommended improved debt management strategies, including reducing reliance on short-term domestic borrowing, extending debt maturities and strengthening domestic revenue mobilisation.

It also highlighted inefficiencies in externally financed projects such as Generating Growth Opportunities and Productivity for Women Enterprises (GROW) and Investing in Infrastructure and Tourism for Economic Transformation (INVITE), noting delays in implementation and low absorption of funds, which continue to attract commitment fees.

“We continue to incur unnecessary costs due to delayed utilisation of funds. This calls for improved project readiness and execution before loans are contracted,” Kankunda said.

The committee further flagged non-compliance with gender and equity requirements by some government entities, recommending stricter enforcement measures, including withholding budget approvals for non-compliant institutions.

Speaker Among referred the committee report to the Committee on Budget for consideration.