16 December 2012

Uganda: Donors, Aid Cuts, and Corruption


The global financial crisis has put enormous pressure on budgets set aside for development purposes:

I think there is an increasing realisation from civil society that the EU and other development partners are crucial allies in the commitment to fight poverty and promote the rule of law and adherence to fundamental freedoms.

Of course, the EU is always looking at ways to improve the effectiveness of its development assistance, while at the same time strengthening relations with both civil society and government. One of the main obstacles to this goal is corruption at any or all levels of society. How to tackle this issue is however highly complex and sensitive, particularly where it concerns the activities of external actors.

With this in mind, the EU already funds several programmes supporting democratic governance, accountability and transparency, and sound public finance management. In addition to government partners, one of the key elements of democratic governance and accountability is empowerment of ordinary Ugandan citizens, and the fostering of demand driven accountability. To this end, a large part of the programme is the provision of grants to civil society organisations for projects on democratic accountability and social accountability.

One of the reasons for this design is that fighting corruption in the public sector is the responsibility of government, aided and overseen by the checks and balances provided by a country's institutions and its civil society. This struggle cannot and should not be led from the outside, whatever the material and other support development partners can provide. Thus, there is a need for better understanding of the development partners' role and for realism in accepting that there are limitations and political risks.

Despite the ongoing OPM crisis it should not be forgotten that in Uganda, the government's willingness to engage on these issues demonstrate a very different political reality than what we have seen in the Middle East and North Africa; one in which civil society and the media do have an opportunity to engage with government and make their concerns heard.

The visit earlier in the year of the UN Convention Against Corruption Review Team, where civil society were invited to raise their concerns candidly to reviewers from Ghana and Romania, was a good example of this. Openness is one element of democratic governance and accountability, but effective follow-up and clear procedures are also crucial and we hope that this is an area that we can assist in developing.

It is also worth mentioning that corruption has wider implications outside the country involved and for development partners. The global financial crisis has put enormous pressure on budgets set aside for development purposes as well as our economies at home. The electorate in our Member States scrutinise, more than ever, the way in which development funds are spent.

Just as corrupt practices, wastage and profligacy are no longer tolerated in beneficiary countries, and rightly so, belts are tightened at home and every Euro that we spend abroad has to be accounted for. The EU, together with the other development partners under the Joint Budget Support Framework in Uganda (Austria, Belgium, Denmark, Germany, Ireland, Sweden, UK and the World Bank), have agreed on a common position on the provision of budget support in the present situation:

The recent corruption scandals and misappropriation of funds in the Government of Uganda are a breach of trust. The Joint Budget Support Framework (JBSF) Development Partners (DPs) consider the pre-conditions related to the fight against corruption and progress in the Public Finance Management (PFM) systems as not met. All JBSF DPs will withhold pending budget support disbursements and any further commitments for an initial period of up to 6 months.

The pre-conditions will be re-evaluated at the latest in April 2013, therefore giving Government of Uganda sufficient time (1) for immediate repayment of misappropriated funds to all affected partners; (2) to take credible short and medium term actions to strengthen the PFM system; and (3) to take administrative sanctions and continue to conduct successful investigations into criminal activities, based on the Auditor General's report and any other relevant information. EU funds have so far not been affected by the PRDP scandal. As Co-Chair of the Joint Budget Support Framework in Uganda, the EU has however been pro-actively engaged in establishing the common position among development partners and in the exchange with the Ugandan Government so far.

For the EU in practical terms this means that funds earmarked as EU budget support to the Ugandan Fiscal Year 2012-13 will not be paid until satisfactory progress has been confirmed on the points above. EU institutions are not yet in a position to determine the future provision of budget support in Uganda.

Other EU support to the Government of Uganda is continued within a controlled fiduciary risk environment, with regular external audits as prerequisites for any payments and limited use of Government systems for financial management. The EU Delegation in Kampala monitors the situation very closely. I'm pleased to note that EU support to non-state actors in Uganda continues unaffected.

The EU welcomes the steps the Ugandan Government has taken in the meantime, including the hearings of the Public Accounts Committee of the Ugandan Parliament on the basis of the Auditor General's Report, continued administrative and judicial proceedings including the freeze of assets of indicted staff, and the preparation of a system-wide forensic audit in the largest spending government ministries.

The current situation I think clearly illustrates the complexities of how corruption is entwined in societies and the problems in addressing it. The issues both here and elsewhere are fluid and I'd like to leave with some questions as to identifying what the big issues are. For example:

What priority should fighting corruption have for donors?

How can we measure political will to fight corruption?

What role can women play?

What role does culture play?

Can civic education be used to fight corruption?

What role should/can civil society play?

What should donors do when corruption is uncovered?

I believe that a comprehensive and inclusive strategy from a wide-range of civil society actors is more important than any external activities could hope to be. I strongly encourage you to further advocate a fairer and more transparent Ugandan society which will be supported by the EU and other DPs. As part of this, a continuous dialogue is important.

Roberto Ridolfi is the EU Ambassador/Head of Delegation. He made these remarks at a meeting in Kampala on 'The Role of Development Partners and International Actors in the fight against graft'

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