Donors scale back aid over CHOGM but government is prepared for the backlash

Donors under the Joint Budget Support partners announced a cut of Shs80 billion from their Shs756 billion ($360 million) aid to Uganda on Aug 9. The cut stems from government’s failure to effectively respond to the theft of hundreds of billions of shillings during the Commonwealth Head of Government Meeting (CHOGM) in November 2007. Donors have since been calling on government to act on the corrupt individuals cited in the CHOGM audit reports.

In May the European Union warned it would withhold up to $500 million in budget support if officials implicated in the scandal were not held accountable. But given that those officials are powerful cabinet ministers, both the Europeans and Ugandans know that a heavy handed response is unlikely.

Threats to Uganda’s aid is nothing new; in the past donors have cut up to 15 percent of their contributions, yet the Uganda government seems unmoved by these actions. The Minister of Finance Economic Planning and Development, Syda Bbumba, says the recent donor budget cut did not catch the government off guard. “We expected it,” Bbumba told The Independent. “There are certain conditions they [donors] want fulfilled and we are going to work on them so that they are back on board.”

Considering the depth of disappointment surrounding the CHOGM scandal, the government prepared for the donor budget support cuts. The 2010/11budgets for a number of ministries including Defence, Tourism, Health and Works and Transport were each reduced by at least ten percent to raise money needed to fund other government priorities. The Ministry of Defence’s budget, which was cut from Shs 532.3 billion last year to Shs510.9 billion this year, has not been done in years. The Ministry of Tourism had their budget cut from Shs 48 billion last year to Shs 41 billion this year and the Ministry of Works had theirs cut from Shs1.2 trillion last year to Shs 919.5 billion this year.

But the government knows that donor contributions to the national budget, which currently stands at Shs2,533.5 billion out of a total of Shs7,333.7 billion, is waning and thus it can afford to contain their pressure. With the discovery of oil, the government will have a considerable new source of revenue, making it harder for outside forces to have influence inside the government. This year alone Uganda expects to get a $ 404.9 million tax from the sale of Heritage Oil stakes in the country to Tullow Oil Company.

The CHOGM debacle is only the latest event to add fuel to the already tense European-Ugandan government relationship. Earlier this year the Europeans protested after the Ugandan government reintroduced force account, which waives competitive bidding in the execution of local government works. Force account allows government to pick contractors without subjecting them to the strict procurement procedures because it believes the nature of works to be executed are small and thus do not call for lengthy competitive bidding. Donors argue that the use of force account can be abused to prevent proper accountability and fear this would fuel corruption.

Early this year the European Commission withheld 40 million Euros in road sector budget support pending what it called “a better understanding of government's policy with regard to the re-introduction of Force Account.” The European Commission, through its chairman and EU Ambassador Vincent De Visscher, said if satisfied with the clarifications from government about the force account implementation, the commission would then release the money for road projects in 2011.

Civil Society Organisations (CSO), which receive much of their funding from such donor countries, have joined hands in pressuring government to act on the CHOGM report. On Aug 10, a day after donors asked government to act on the CHOGM report, CSOs resolved that parliament should immediately debate the CHOGM report before its term of office ends, sack ministers implicated in the report and hthe presidential liable if he  doesn’t take action.

CSOs are concerned that the report is destined to be ignored like numerous similar previous reports. Godber Tumushabe, executive director of ACODE, a public policy think tank, said the failure to act on the CHOGM report is one of the signs of regime survival. Tumushabe said the inquiry could have been conducted to manage the public anger. Usually inquiries are commissioned to establish the truth and provide technical advice but the government doesn’t seem enthusiastic about discussing the findings of the Public Accounts Committee’s CHOGM report.

Other CSO participants like Sheila Kawamara surprised the Aug 10 meeting of CSOs at Hotel Africana when she took a different view by making a verdict of collective guilt on all Ugandans. Kawamara, a former member of parliament in the East African Legislative Assembly, argued that all Ugandans are to blame for the CHOGM mess because of apathy to the actions of leaders.

“Ugandans will always do what leaders want them to do. Our leaders are supposed to be loyal to us but actually we are very loyal to them and we will not demand accountability from them,” said Kawamara. “We are the ones footing the bill for CHOGM. They are supposed to take responsibility for their actions.”

She highlighted how those implicated in the CHOGM report have since been re-elected in recent NRM party district execuarliamentary Accounts Committee (PAC), in its investigations, never probed Shs 9 billion that was allocated to the office of the President during the CHOGM preparations.

Kawamara opposed other participants who had called for the sacking of individuals implicated in the CHOGM scam, arguing that firing them would mean telling the president to get rid of the whole cabinet. She sees this as an impossibility because nearly all sectors in the economy are implicated including nearly all cabinet ministers, the Uganda Media Centre and hoteliers.  

Benson Ekwee, a civil society activist from Eastern Uganda, lambasted the CSOs for only being good for issuing statements in luxurious hotels and signing in for attendance allowances. He challenged the CSOs to move out to the people, carry out civic education to hold leaders accountable for their actions. “I think the civil society is the biggest problem to Uganda’s democracy. We have a shy and timid civil society. We like to shy away from democratic issues preferring to operate in comfort zones issuing statements in hotels and nothing beyond this; we are simply issuing hot air,” he said. “Until we start providing strategic leadership to the citizenry, until we start mobilising, until we start reaching out to the electorate, we will continue seeing leaders with questionable moral standing being elected.”

Richard Ssewakiranga, the chairperson Uganda NGO Forum, said holding leaders accountable is every citizen’s responsibility. He said the citizen’s role should not end at voting and watch things go wrong and shy away from questioning.    

It remains to be seen if the new pressure the donors, who have teamed up with the civil society, are mounting on government would make it change its attitude on fighting corruption.

The new donor pressure on government to act on the CHOGM report and individuals implicated in similar corruption scandals has been renewed by the parliament’s delay to debate the PAC’s report on CHOGM. Some of the suspects in the CHOGM report had also been implicated in the 2008 Auditor General’s report.

The donors who include World Bank, Africa Development Bank, European Commission, Austria, Belgium, Denmark, Germany (KfW), Ireland, Norway, Netherlands, Sweden and United Kingdom warned of further cuts if nothing concrete is done to fight graft. Increased donor support is invested in accountability, energy, governance, social development, water, sanitation, environment, and ministry of tourism, trade and industry. 

The Speaker of Parliament, Edward Ssekandi, admitted there is much pressure from the donors for parliament to debate the CHOGM report but attention must go to more urgent issues such as the national budget and the president’s State of Nation address delivered in June before anything else.  

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