Liz Kobusinge
17 November 2008
opinion
Kampala — The question is whether the global financial crisis will hurt Ugandans. A number of experts have given their view of the situation.
Andrew Mwenda in the Independent (24th - 30th October issue) mentions that the bad news is that the financial crisis in the West will certainly impact on Uganda negatively since the country is integrated into the international financial system. He adds that, the good news is that the impact will be small because our integration is not so deep.
Recently in The New Vision, Dick Kamuganga, a trade and development specialist based in Geneva, Switzerland, explained seven channels through which this crisis could spread to hit the Ugandan economy and hence the ordinary Ugandan.
Kamuganga mentioned that aid to support the budget is likely to decrease. A recession as a result of financial crisis could trigger disruptions in the aid flows that can hurt the Government budget and scale down the poverty eradication programmes undermining the progress to achieve the UN millennium development goals by 2015.
Mwenda mentions that this financial year, Uganda will depend on foreign aid for 30% of its budget, down from 50% three years ago meaning our foreign aid dependency already has reduced our exposure especially if the crisis forces donor countries to cut down the money they spend as aid to poor countries.
Other issues surrounding the crisis have been presented. However, my core interest lies in the role of foreign aid to us in Uganda. Foreign aid is useful for humanitarian purposes in the case of those facing famine, floods and earthquakes, secondly, planned government expenditure is greater than revenue therefore, with foreign aid citizens escape over taxation. Thirdly, given the debt burdens, foreign aid in the form of debt cancellation helps relieve the debt burdens, among other advantages.
Kamuganga's concern that aid flows may be disrupted in turn leading to a setback in the poverty eradication programmes is significant. However, there is a question of whether Ugandans ultimately need aid to develop or eradicate poverty for that matter. Aid may not play such a major part as some assume, or that one might infer from the amount of discussion there is about it in international circles. What is clear from past experience is that much aid has been wasteful of resources and ineffective in promoting development.
This calls for a fresh look at the problem, tightening up existing procedures and for developing new approaches more so given the uncertainty that has come in. Not all aid serves the intended development benefits; for example, there is aid money which has been injected into community health projects like provision of safe water and sanitation facilities which become non-functional a few years down the road because communities are not willing to maintain such resources.
Sustainable development in Uganda depends on people's attitude, attributes, behaviour, motivation and governance systems. People working with community health programmes still struggle to sensitise some communities about the need to construct pit latrines. Some programmes construct pit latrines which are not well utilised thus failing the objective of reduction in poor hygiene and sanitation related diseases. Some communities revert to using unsafe water sources when the constructed ones break down instead of repairing the damaged ones.
The contribution of aid to development should not be exaggerated. Ultimately, Uganda's development depends largely on its own efforts, the leaders' will and responses of the people.
Research is a necessary complement to aid at several levels. It is necessary for an assessment of the impact of aid, and this needs to be undertaken on an ongoing basis.
The writer is a registered comprehensive nurse
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