Uganda’s development partners have delivered a strong warning to President Museveni’s government over corruption and what they see as flawed management of the country’s affairs.
The Observer has learnt that several key donors were considering cutting development aid to Uganda, with their final decision expected late last evening, after another meeting between donors and government officials.
Among other concerns, the donors, who fund 30% of the budget, are particularly upset that the government has failed to tackle “high-level corruption” and an unsustainable population growth rate.
They warned that unless the government wakes up, the much anticipated oil revenues might be more of a curse than a blessing.
According to diplomatic sources, the donors’ feelings were made known by Kundhavi Kadiresan, the World Bank’s Country Manager for Uganda, during last week’s budget workshop at Hotel Africana.
Kadiresan’s written speech, a copy of which diplomatic sources have shared with The Observer, is remarkable for its candid tone and sometimes stern words.
After the usual pleasantries, members of the media were asked to leave the hall, leaving Kadiresan, who also chairs the local development partners’ group, to deliver her terse statement.
Museveni was reportedly not at the meeting, but the speech was prepared on the assumption that he would attend.
Kadiresan started by praising the government for maintaining economic growth, reducing poverty and inflation, withstanding the recent global financial crisis and pacifying Northern Uganda, among other positives. But that was less than a quarter of her package.
“Your Excellency, past accomplishments by the Government of Uganda have been remarkable. However, the real test of prudent and effective government lies in how you will address the challenges of the future,” Kadiresan said.
She then discussed the challenges that Uganda should address if it is to become a middle income country in the next 15 years. According to data from the World Bank, Uganda currently has a gross national income per capita of $420 compared to $3,400 for a middle income country like Thailand.
The one challenge that Kadiresan dwelt on most was fighting corruption. President Museveni has in recent years vowed to fight corruption, but his strong words don’t seem to have persuaded the donors.
While some people – like Teddy Sseezi Cheeye, a former director in ISO, and Fred Kavuma, a former UBC employee, and most recently Tingey MP, Herbert Sabila, have been convicted of corruption-related charges, donors are not convinced.
“Development partners are particularly concerned about Government failure to take effective action against high level corruption in the country,” Kadiresan said in her speech.
“A recent example is CHOGM, where there has been minimal follow-up on recommendations in the audit reports, which have been known since 2008. The PAC hearings have publicised the issues surrounding the leakage and abuse of CHOGM funds. Yet government administrative action to sanction offenders or recover funds has so far been inadequate. Your Excellency, corruption in Uganda is endemic and we have seen no signs of improvement.”
She cited other corruption scandals related to GAVI immunisation funds, Temangalo NSSF deal, NAADS and public procurement.
Later, while discussing the concrete steps that the government must take to curb the rot, Kadiresan said: “Lastly, Mr. President, the Government of Uganda has to start fighting corruption seriously.
The undeniable lack of government action to follow up on cases of grand corruption is a key area of development partner concern. Policies, laws and institutions are in place, but enforcement is limited, creating a culture of impunity. Offenders should be sanctioned, money should be recovered and criminal investigations taken forward on key cases.” Population growth
For years now, experts and this newspaper have warned that at 3.2% per year, Uganda’s population was growing so fast that it threatened to wipe out the gains of economic growth.
But President Museveni rejects this advice. He sees a large population as a large market, ignoring abundant examples of countries like Bangladesh or Nigeria which have significant proportions of their large populations wallowing in poverty.
Last week, Kadiresan again said the government must prioritise taming population growth by availing family planning services to those who need them.
She gave examples of Thailand and Indonesia, which moved from least developed countries to middle income countries in 15-17 years, aided by fast economic growth and declining population growth rates.
The donors also criticised the unending creation of new districts, saying it does not help ordinary Ugandans who need good schools and medicines in hospitals.
“Starting at 36 districts, 80 districts last year, and now 91 districts: who can make a serious case that this expansion of the number of districts is good for service delivery?” Kadiresan wondered. The speech ended with a warning:
“The Government’s failure to act on high level corruption will have implications, and donors under the Joint Budget Support Framework are currently considering a range of actions. This may include withholding disbursements, reductions in aid, or re-programming away from direct budget support.”
It was not immediately clear how Museveni was taking the donors’ tough talk. In the past, he has scoffed at threats of cutting aid.
By the time we went to the press, donors and government representatives were locked in a crisis meeting at the Ministry of Finance. But earlier, the Secretary to the Treasury, Keith Muhakanizi, acknowledged the concerns of the donors.
“Their concerns are real and as they urged us to strengthen the measures of fighting corruption we are working on it,” he said.
Steven Shalita, the spokesman for the World Bank in Kampala, clarified that Ms. Kadiresan’s statement was made on behalf of all the donors and not just the World Bank.