Withholding of foreign aid in wake of fraud scandal is starting to bite

Sat, Nov 24, 2012, 00:00

ANALYSIS:When the international aid scandal erupted a month ago, many commentators in Uganda – fed up with their government’s record of corruption – praised Ireland’s decisive action in halting direct aid.

Since then, Uganda’s problems have intensified.

Last week Britain joined Norway, Sweden, Denmark and Ireland in suspending direct financial aid to Uganda .

The World Bank is also reviewing its development assistance to the country.

There are signs the cuts are beginning to bite. On Thursday, Uganda’s junior finance minister told a parliamentary committee on health that the aid suspension was having an effect on revenue, as he explained why the ministry of finance had not released money earmarked for doctors’ salaries and additional recruitment of health sector staff.

While international aid is not quite as important as it once was – the Ugandan government has committed to decreasing its reliance on international aid – it still represents up to half the country’s annual budget.

Ironically, yesterday’s report published by Irish Aid may be the most comprehensive and timely report that the Ugandan public receives on the scandal.

Opposition politicians speaking to The Irish Times in Kampala earlier this month repeatedly complained about the president’s failure to communicate with the Ugandan people and parliament about the aid crisis and the president’s commitment to repay the diverted funds from taxpayers’ money before identifying where the misappropriated money went.

Meanwhile, yesterday’s report suggests that the Irish Government is hanging its hat on the work of the Ugandan auditor general, who is expected to complete a series of investigations by next April.

The UK-educated, former PWC executive is also highly regarded in Uganda, but as Donald Rukare of the non-profit organisation Global Insights, and a former Irish Aid employee, said yesterday from Kampala, implementing his recommendations will be the key challenge for Uganda.