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13 December 2011

Legal and Institutional Framework

To implement the PERD Policy, Government put in place the following legal and institutional arrangements:

a)             The Public Enterprises Reform and Divestiture (PERD) Act

Following the publication of the Policy, government went on to provide the policy with the necessary legal framework to support its implementation. The PERD Act – Chapter 98 Laws of Uganda, was enacted in October 1993. The Act set out to provide for the reform and divestiture of public enterprises; to establish the Divestiture and Reform Implementation Committee (DRIC) charged with the implementation of the Government’s policy and for other related matters.

b)             Establishment of the Divestiture and Reform Implementation Committee

The Act established DRIC, provided for the Membership and Functions of the Committee and guidelines for its operations. DRIC is responsible for implementing government policy on Reform and Divestiture and carrying out all the functions prescribed in the PERD Act.

c)              Framework for Reform and Monitoring of Public Enterprises

The PERD Act provides for the role of the Minister responsible for Finance and the line ministers in monitoring the performance of the Public Enterprises. It outlines the monitoring parameters and the reporting activities to be undertaken by the Minister responsible for Finance and the line Minister. The Act further specifies the criteria for reform and restructuring of specific public enterprise and compensation of employees that would be rendered redundant during the process. The Parastatal Monitoring Unit (PMU) under the Reform and Divestiture Secretariat was delegated the responsibility of administering the reform and monitoring function provided for under the Act.

The PMU undertakes the delegated functions following the guidelines provided in the Act and makes periodic reports on its activities to the Ministry of Finance, Planning & Economic Development.

d)             Framework for Divestiture

The PERD Act provides for the institutional arrangement and details for divesting a public enterprise. It established Privatisation Unit and delegated to it the day to day implementation of the divestiture activities (paragraph 4, Second Schedule of the Act).