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Uganda ranked 130th out of 176
countries in the Corruption
Perception Index 2012 released
Dec. 5 by Transparency International.
Photo by: futureatlas.com
/ CC
BY-NC-SA
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Last week, the European Union became
the latest donor to suspend budget support to Uganda in the wake of allegations
that up to $13 million in aid money may have been embezzled through the prime
minister’s office. EU Ambassador to Uganda Roberto Ridolfi called the reported
misappropriation of funds, which were intended to support stabilization and
development programming in Northern Uganda, “a breach of trust.”
In response to the allegations, the
United Kingdom, Denmark, Germany, Ireland and Sweden had earlier suspended
budget support to Uganda. Norway – one of four donors to reportedly lose aid
money in the embezzlement scandal – ceased general budget support to Uganda in
2010. Ireland, Sweden and Denmark have also lost aid money, according to the
Ugandan auditor general which uncovered the misappropriation of funds in the
prime minister’s office.
Ugandan Prime Minister Patrick Amama
Mbabazi has since apologized
for the reported embezzlement of aid money. Seventeen officials, including from
Mbabazi’s office, have been suspended without pay.
Analysts say that the nearly $300
million in budget support cutbacks from aid donors will likely take a serious
toll on the Ugandan economy, which had been one of the fastest-growing in sub-Saharan
Africa in recent years. On Tuesday, Uganda’s central bank governor predicted
that the cuts will set back the country’s economic growth by 0.7 percent over
the next twelve months. Uganda relies on external financing for about a quarter
of its public expenditures.
Invariably, the allegations in Uganda
will trigger questions about the practicality of on-budget support in this
value for money and results-focused era. Donor governments and elected
officials, already under stress from austerity, remain fearful of these types
of high-profile corruption cases which go public and cause taxpayer backlash.
As the investigation in Uganda unfolds, it will be interesting to see how
donors handle the situation and if it affects the way aid money is being spent
in other developing countries with poor governance and weak budget
accountability.
Yet even as more European countries
join the ranks of donors freezing budget support to Uganda, a number of other
donors have postponed judgment on the aid embezzlement scandal (see graphic
below). In fact, none of Uganda’s three largest donors – the United
States, the African
Development Bank and the World Bank – have
announced cuts to their aid spending in the East African country since the
Ugandan auditor general unearthed the corruption allegations in October.
United States
On November 21, U.S. Ambassador to
Uganda Scott H. DeLisi announced that the United States would maintain its
assistance to Uganda despite the scandal. DeLisi has also said that he is
“deeply concerned” by the reported embezzlement of aid money. In line with
Washington’s longstanding preference for project-based aid, the United States
does not provide budget support to Uganda.
However, the recent revival of an
anti-homosexuality bill in the Ugandan parliament may yet prompt the
administration to reevaluate its development partnership with Uganda. In
February 2010, President Barack Obama had strongly condemned the bill which
would make some homosexual acts in Uganda a crime punishable by death. Late
last year, in a historic directive, Obama instructed
U.S. aid agencies to consider host countries’ treatment of lesbian, gay,
bisexual and transgender people in making funding decisions.
For fiscal 2012, the United States has
budgeted $461 million in foreign aid to Uganda, keeping its standing as the
largest donor to the East African country. The bulk of this amount has been
allocated to health programming through the President’s
Emergency Plan for AIDS Relief. Uganda is a focus country for each
of the Obama administration’s marquee global development initiatives: the Global Health
Initiative, Feed the
Future and the Global
Climate Change Initiative.
African Development Bank
The AfDB has not issued a statement in
response to the allegations of aid embezzlement in Uganda. On November 12, in
an apparent sign of the bank’s continued support for Uganda, the AfDB approved
a $103 million project to support higher education, science and technology in
the country. Through the project, 35,000 Ugandan students will be able to
enroll in science, technology and innovation programs, according to the bank.
In its 2012-14 program budget, the
AfDB anticipates $285.5 million in total lending to Uganda this year. The
bank’s Uganda portfolio focuses on infrastructure development as well as
capacity skills development. On a visit to Kampala last month, AfDB President
Donald Kaberuka met with Ugandan president Yoweri Museveni to discuss ongoing
cooperation between AfDB and Kampala, among other issues.
World Bank
In a statement released on November
14, the World Bank revealed
that the multilateral lender was reviewing its assistance to Uganda in light of
the findings of the country’s auditor general. The bank pledged to work with
the Ugandan government and other development partners to help the country
deliver on its national policy of zero tolerance for corruption.
For 2012, the World Bank has approved
a total of $235 million in lending to Uganda. The bank’s lending to the country
this year has comprised of $135 million for a water management and development
project and $100 million for a poverty reduction support credit program.
According to its 2011-15 country partnership strategy, the bank’s priority
sectors in the country are inclusive and sustainable economic growth, public
infrastructure, human capital development and governance.
United Kingdom
On November 16, U.K. Secretary of
State for International Development Justine Greening announced that the United
Kingdom was immediately suspending budget support to the Ugandan government.
Greening’s move was informed by initial evidence from the U.K. Department for International
Development’s own audit of the Ugandan prime minister’s office which
indicated that aid money may have been misused. Only last year, the U.K.
bilateral aid review had named
Uganda as one of 27 countries where U.K. aid programs were not only most needed
but also delivered the greatest impact.
For fiscal 2012-13, the United Kingdom
had planned to spend 26.9 million pounds ($43.1 million) in budget support to
the Ugandan government. Budget support currently accounts for 27 percent of
British aid spending in Uganda. Last year, DfID had set in motion plans to
reduce the share of budget support in its Uganda program through 2015.
Following its freeze on budget support
to Uganda, the Cameron administration has taken steps to reaffirm its
development partnership with the country. In a speech in Kampala last week,
DfID Permanent Secretary Mark Lowcock emphasized
that the agency’s programming in Uganda – which focuses on the health sector –
will continue. And at the recently concluded U.N. climate change conference in
Doha, U.K. Secretary of State for Energy and Climate Change Ed Davey pledged
14 million pounds to support small-scale renewable energy projects in
Uganda.
European Union
On December 3, EU Ambassador to Uganda
Roberto Ridolfi told an audience in Kampala that Brussels would be suspending
budget support to the East African country for at least the next six months.
Under the 10th European Development Fund – the EU’s principal
financing instrument for aid to Uganda – Brussels had allocated 460.9 million
euros ($594.4 million) in foreign assistance to the country from 2008 to 2013.
More than 50 percent of this amount was slated for budget support to the
Ugandan government.
Only in November of last year, EU
Commissioner for Development Andris Piebalgs had visited
Uganda to make a push for innovative financing as well as
public-private partnerships in the country’s agricultural sector. Piebalgs
called Uganda an “excellent partner country to start putting our ideas into
practice.” Rural development – in addition to transport and macroeconomic
development – are the EU’s priority sectors in its Uganda aid programming.
Denmark
On October 31, Danish Minister for
Development Cooperation Christian Friis Bach announced
that Denmark was immediately suspending budget support to Uganda. Denmark
was one of four donors to reportedly lose aid money in the embezzlement scheme at
the Ugandan prime minister’s office. Friis Bach – who was recently interviewed
by Devex – has asked Ugandan government officials not only to recover the
stolen donor funding but also to prosecute those involved.
For 2012, the Danish government had
set aside 360 million kroner ($62.6 million) for aid spending in Uganda.
According to Friis Bach, Danish contributions to Uganda’s judicial sector,
civil society groups, the Human Rights Commission, Office of the Ombudsman and
local nongovernmental organizations will continue in spite of the scandal.
Denmark’s aid programming in Uganda is currently focused on growth, good
governance, and human development.
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