Aid or dependency?
Uganda: Who Paysthe Cost When the Aid Stops?
By Courtney Meyer, 23 January 2013
After years of being an aid darling despitewidespread corruption, a number of donors recently suspended aid to Ugandafollowing high-level scandals.
Although his swift response to the AIDScrisis and efforts to economically liberalise and politically stabilise hiscountry have often seen Yoweri Museveni regarded as an aid darling by donorcountries, the reputation of Uganda's president might now be beginning to waneamidst reports of official corruption.
News of high-level corruption is nothingnew. Uganda is believed to be the most corrupt country across East Africa andthere's evidence to suggest elections have been fixed. But until recently,official development assistance has largely continued to flow unabated. In thelast few months, however, a number of recent scandals have led some donors todemand Museveni's government return misappropriated aid.
How much longer will the fundsrealistically roll in? And if aid is cut off, how will it affect the Ugandanpeople?
Donors denounce dodgy dealings
In August, Ugandan auditors informed theIrish government that the $16 million of joint funding it provided alongsideNorway, Denmark, and Sweden had not paid for the anticipated peace, recovery,and development programme in northern Uganda.
Rather this funding benefited severalindividuals employed within Prime Minister Patrick Amama Mbabazi's office. Uponlearning this, Irish Aid immediately suspended 16 million ($21 million) ofaid.
In early January, following a confirmationthat the diverted Irish Aid funds had been returned as promised, Irish Ministerfor Foreign Affairs Eamon Gilmore discussed his department's findings in theirenquiries into what had happened.
They determined that "the fraud wasconceived and carried out by personnel in collusion who had an intimateknowledge of systems within the ministry of finance, planning and economicdevelopment, [the] office of the prime minister and Bank of Uganda".
The funds, they said, "werefraudulently transferred from the legitimate bank accounts into which the donorshad properly deposited the money to fraudulent dormant accounts outside of thegovernment system". This made it nearly impossible to ascertain theultimate beneficiaries.
Although the money would be returned toUganda to benefit the health, education, and AIDS project it was originallyearmarked for, Gilmore stressed that it would not be funnelled through thegovernment until greater confidence could be restored.
Then in October, the dispute with Irish Aidstill raging, the UN Group of Experts report scandalised Uganda's donorsfurther. The report implicated not only Rwanda for interference with theCongolese M23 rebel group, but also Uganda for allegedly arming them. Musevenihas since vowed to "defeat these thieves". But are his words too little,too late?
In November, UK International DevelopmentSecretary Justine Greening followed the Irish example, suspending all directand bilateral aid with immediate effect.
"This is a result of initial evidenceemerging from our ongoing forensic audit of the office of the prime minister,which indicates aid money may have been misused", stated the Departmentfor International Development (DfID). "Unless the government of Uganda canshow that UK taxpayers' money is going towards helping the poorest people liftthemselves out of poverty, this aid will remain frozen and we will expectrepayment and administrative and criminal sanctions."
Fragile friendships
The rhetoric coming from Kampala has beenmixed. Ofwono Opondo, deputy spokesman for Museveni's National ResistanceMovement (NRM) party, bombastically informed reporters that the country couldreadily withstand a reduction in aid. His confidence perhaps stems from ananticipation of increased oil revenues in 2017.
For his part, Museveni waxed lyrical on hiscountry's successes, inviting foreign donors to "Kindly inform your homeconstituencies that you are dealing with capable people who fought the dictatorshipof Idi Amin; fought the dictatorship of the UPC [Uganda People's Congress];defended Uganda from Sudanese-sponsored terrorism; destroyed the colonial armythat was killing Ugandans; stopped the multiple crimes of that army against thepeople of Uganda; enabled the Ugandan economy to recover; contributed toregional peace ... We have the capacity to defeat these thieves as we defeatedall the other enemies of Uganda".
However, in December the president seemedmore cautious with regards to Uganda's donors. Speaking about the controversialanti-homosexuality bill before the country's parliament, Museveni requestedthat homosexuality - though not something to be promoted in his view - was notpersecuted. Given apparent popular support for the bill in Uganda, thiscompromise was undoubtedly intended to dampen the outrage sparked by the billin the West.
But the ubiquity of corruption in Ugandacould itself be reason enough for donors to reconsider their funding.Museveni's regime is one that allows power holders to divert politicalresources to maintain loyalty within its coalition, and along regional andtribal affiliations. General budget support was redirected to the NRM'spresidential and parliamentary campaigns in February 2011, and Musevenipurchased a private jet with UK funds shortly after.
This misappropriation is an example ofbehaviour that maintains power without regard for the developmentalconsequences. The aid stolen by the prime minister's office was intended tobenefit the north of the country - a region ravaged by the war with the Lord'sResistance Army (LRA) between 1986 and 2006.
Aid from donors to the region has largelyallowed Museveni to ignore his political opposition's plight and consolidatethe NRM's monopoly on power. In this way, corruption has becomeinstitutionalised - it is a means to a governance strategy that the regime ispredictably keen to retain.
Punishing the people for their pilferingpresident?
Despite well-documented occasions ofcorruption, aid has continued to flow from donors to Uganda - until recently.For Ireland at least, significant improvements to financial control systemsmust follow before the funnelling of aid through governmental coffers will bereinstated. And it asked for misused aid to be returned in the meantime.
What effect will this have on Uganda'sneediest?
A statement in December by theAnti-Corruption Coalition Uganda (ACCU) eloquently described the predicamentfor Uganda's people. "When those in custody of our resources decide todivert monies meant for dying children and pregnant mothers, in order to builda political patronage system of survival, one is left wondering how far ourgovernment will continue to blatantly and arrogantly rob its citizens."
But it continued that returningmisappropriated aid money is not a common practice, and Cissy Kagaba, head ofthe Anti-Corruption Coalition Uganda (ACCU), considers the move ill-advised.
"It is rather unfortunate that donorsare accepting money taken from the consolidated fund because this does notsolve the problem [of corruption] ... If they say they are friends of Uganda,they should realise that this is double jeopardy for Ugandans since refundedmoney from the consolidated fund means that ordinary Ugandans will be deprivedof essential services."
Herein lies the conundrum for donorcountries. On the one hand, they can risk inadvertently fuelling a corruptsystem that benefits and bolsters a small elite, and angers their own citizenryat home. On the other hand, they can demand reform and transparency, but riskdevelopmental programmes falling back. Either way, it is Uganda's neediest thatwill suffer in the meantime.
Courtney Meyer is a freelance writer whoearned an MSc in Development Studies with distinction at the School of Orientaland African Studies in London. Her interests include politics and officialdevelopment assistance in central and east Africa.
Read the originalof this report on the ThinkAfricaPresssite.
Uganda: Who Paysthe Cost When the Aid Stops?
By Courtney Meyer, 23 January 2013
After years of being an aid darling despitewidespread corruption, a number of donors recently suspended aid to Ugandafollowing high-level scandals.
Although his swift response to the AIDScrisis and efforts to economically liberalise and politically stabilise hiscountry have often seen Yoweri Museveni regarded as an aid darling by donorcountries, the reputation of Uganda's president might now be beginning to waneamidst reports of official corruption.
News of high-level corruption is nothingnew. Uganda is believed to be the most corrupt country across East Africa andthere's evidence to suggest elections have been fixed. But until recently,official development assistance has largely continued to flow unabated. In thelast few months, however, a number of recent scandals have led some donors todemand Museveni's government return misappropriated aid.
How much longer will the fundsrealistically roll in? And if aid is cut off, how will it affect the Ugandanpeople?
Donors denounce dodgy dealings
In August, Ugandan auditors informed theIrish government that the $16 million of joint funding it provided alongsideNorway, Denmark, and Sweden had not paid for the anticipated peace, recovery,and development programme in northern Uganda.
Rather this funding benefited severalindividuals employed within Prime Minister Patrick Amama Mbabazi's office. Uponlearning this, Irish Aid immediately suspended 16 million ($21 million) ofaid.
In early January, following a confirmationthat the diverted Irish Aid funds had been returned as promised, Irish Ministerfor Foreign Affairs Eamon Gilmore discussed his department's findings in theirenquiries into what had happened.
They determined that "the fraud wasconceived and carried out by personnel in collusion who had an intimateknowledge of systems within the ministry of finance, planning and economicdevelopment, [the] office of the prime minister and Bank of Uganda".
The funds, they said, "werefraudulently transferred from the legitimate bank accounts into which the donorshad properly deposited the money to fraudulent dormant accounts outside of thegovernment system". This made it nearly impossible to ascertain theultimate beneficiaries.
Although the money would be returned toUganda to benefit the health, education, and AIDS project it was originallyearmarked for, Gilmore stressed that it would not be funnelled through thegovernment until greater confidence could be restored.
Then in October, the dispute with Irish Aidstill raging, the UN Group of Experts report scandalised Uganda's donorsfurther. The report implicated not only Rwanda for interference with theCongolese M23 rebel group, but also Uganda for allegedly arming them. Musevenihas since vowed to "defeat these thieves". But are his words too little,too late?
In November, UK International DevelopmentSecretary Justine Greening followed the Irish example, suspending all directand bilateral aid with immediate effect.
"This is a result of initial evidenceemerging from our ongoing forensic audit of the office of the prime minister,which indicates aid money may have been misused", stated the Departmentfor International Development (DfID). "Unless the government of Uganda canshow that UK taxpayers' money is going towards helping the poorest people liftthemselves out of poverty, this aid will remain frozen and we will expectrepayment and administrative and criminal sanctions."
Fragile friendships
The rhetoric coming from Kampala has beenmixed. Ofwono Opondo, deputy spokesman for Museveni's National ResistanceMovement (NRM) party, bombastically informed reporters that the country couldreadily withstand a reduction in aid. His confidence perhaps stems from ananticipation of increased oil revenues in 2017.
For his part, Museveni waxed lyrical on hiscountry's successes, inviting foreign donors to "Kindly inform your homeconstituencies that you are dealing with capable people who fought the dictatorshipof Idi Amin; fought the dictatorship of the UPC [Uganda People's Congress];defended Uganda from Sudanese-sponsored terrorism; destroyed the colonial armythat was killing Ugandans; stopped the multiple crimes of that army against thepeople of Uganda; enabled the Ugandan economy to recover; contributed toregional peace ... We have the capacity to defeat these thieves as we defeatedall the other enemies of Uganda".
However, in December the president seemedmore cautious with regards to Uganda's donors. Speaking about the controversialanti-homosexuality bill before the country's parliament, Museveni requestedthat homosexuality - though not something to be promoted in his view - was notpersecuted. Given apparent popular support for the bill in Uganda, thiscompromise was undoubtedly intended to dampen the outrage sparked by the billin the West.
But the ubiquity of corruption in Ugandacould itself be reason enough for donors to reconsider their funding.Museveni's regime is one that allows power holders to divert politicalresources to maintain loyalty within its coalition, and along regional andtribal affiliations. General budget support was redirected to the NRM'spresidential and parliamentary campaigns in February 2011, and Musevenipurchased a private jet with UK funds shortly after.
This misappropriation is an example ofbehaviour that maintains power without regard for the developmentalconsequences. The aid stolen by the prime minister's office was intended tobenefit the north of the country - a region ravaged by the war with the Lord'sResistance Army (LRA) between 1986 and 2006.
Aid from donors to the region has largelyallowed Museveni to ignore his political opposition's plight and consolidatethe NRM's monopoly on power. In this way, corruption has becomeinstitutionalised - it is a means to a governance strategy that the regime ispredictably keen to retain.
Punishing the people for their pilferingpresident?
Despite well-documented occasions ofcorruption, aid has continued to flow from donors to Uganda - until recently.For Ireland at least, significant improvements to financial control systemsmust follow before the funnelling of aid through governmental coffers will bereinstated. And it asked for misused aid to be returned in the meantime.
What effect will this have on Uganda'sneediest?
A statement in December by theAnti-Corruption Coalition Uganda (ACCU) eloquently described the predicamentfor Uganda's people. "When those in custody of our resources decide todivert monies meant for dying children and pregnant mothers, in order to builda political patronage system of survival, one is left wondering how far ourgovernment will continue to blatantly and arrogantly rob its citizens."
But it continued that returningmisappropriated aid money is not a common practice, and Cissy Kagaba, head ofthe Anti-Corruption Coalition Uganda (ACCU), considers the move ill-advised.
"It is rather unfortunate that donorsare accepting money taken from the consolidated fund because this does notsolve the problem [of corruption] ... If they say they are friends of Uganda,they should realise that this is double jeopardy for Ugandans since refundedmoney from the consolidated fund means that ordinary Ugandans will be deprivedof essential services."
Herein lies the conundrum for donorcountries. On the one hand, they can risk inadvertently fuelling a corruptsystem that benefits and bolsters a small elite, and angers their own citizenryat home. On the other hand, they can demand reform and transparency, but riskdevelopmental programmes falling back. Either way, it is Uganda's neediest thatwill suffer in the meantime.
Courtney Meyer is a freelance writer whoearned an MSc in Development Studies with distinction at the School of Orientaland African Studies in London. Her interests include politics and officialdevelopment assistance in central and east Africa.
Read the originalof this report on the ThinkAfricaPresssite.
