The European Union has assured Uganda that the money it budgeted for it will not diminish in the short term because it is available and unscratched by the global recession.

"Our programme (financing) for Uganda goes until 2013 and all the money that has been pledged is there. So, there's no immediate decrease of external assistance despite the financial crisis," Mr Vincent De Visscher, the head of the European Delegation to Uganda told the press on 4th Annual Competitiveness Forum last week.

Between last year and 2013, the European Union committed to give Uganda about Shs1.3 trillion ($461 million), under different programmes including; education, infrastructure and health according to the EU's national Indicative Programme of Community Aid.

Mr Visscher said although many developed nations are reeling from the effects of the global financial , financial commitment of the bloc to Uganda and the other Africa nations, was on track.

"I have no reason to believe that our commitment to Uganda will be respected and I have no reason to believe that it will be met," he said. The Ambassador's guarantee came on the back of a warning by Oxford University's Prof. Paul Collier, a renowned economist and political analyst, that aid to developing countries and to Uganda would diminish in the near future once the country begins earning revenue from its oil. Speaking at the Forum that gathered local and international experts, to find solutions to Uganda's poor performance in the global environment, Prof. Collier said, "There will be less aid," from developed nations... you are going to have to rely on domestic resources."

A reduction in aid to developing countries like Uganda is only good, if the economy earns more revenue than it spends. Unfortunately for most developing nations, expenditure is usually higher than revenue which calls for reliance on aid and borrowing to meet national needs like public education and health care.

However, Ambassador Visscher lauded Uganda for decreasing its reliance on aid from over 46 to 31 per cent as of this financial year, as it turns to its domestic revenue to finance the national budget. "We hope that Uganda graduates from it and will not be dependent on it."

Commenting on the reduction in aid, Bank of Uganda Governor Emmanuel Tumusiime-Mutebile, said because external assistance will shrink, Uganda needs to tailor its development plans with the fact in mind. This he said, calls for either raising more domestic government resources or borrowing from elsewhere.

"It is quite possible that that borrowing will as well include government bonds and treasury bills." Bond and bills are paper instruments that guarantee that a government owes investor money which is due to be paid at a future date.

But in Uganda unlike in other countries, bonds are not used to finance developed projects but to drain out of the system, the cash that has been spent by the government, a process known as sterilizing, so that it does not cause inflation.

If government decides that they want to use treasury bonds for development, Mr Mutebile said, "We have to find another way of sterilizing government expenditure but we haven't reached that bridge yet, we will cross that bridge when we reach there."