Development partners want the Government to take administrative action against all officials implicated in the corruption scandals as a precondition for resuming direct aid to Uganda.
This was one of the issues discussed in a meeting between President Yoweri Museveni and European Union ambassadors at State House Entebbe on Sunday.
"The budget support will only be renewed after this precondition has been fulfilled," a source that attended the meeting said yesterday.
However, a statement issued from State House yesterday said Museveni and the ambassadors, led by the head of the European Union delegation, Robert Ridolfi, discussed issues of mutual interest between Uganda and the EU.
The statement said the issues discussed in the meeting also included electoral reforms that they noted are important to the full realisation of a democratic dispensation.
"Museveni recognised the importance of having in place a computerised voter register to avoid electoral malpractices," the statement said.
The President, according to the statement, agreed that non-governmental organisations (NGOs) working to fight corruption are an asset to the Government and he pledged to work with such organisations to wipe out corruption. But he warned that NGOs that "work as agents of external interests would not be tolerated".
Museveni also stressed the importance of good financial governance, a vibrant private sector and investments.
He said he is committed to transparency and has instructed the Government to move forward with preparations for accession to the Extraction Industry Transparency Initiative.
Museveni also confirmed that he will appoint a second deputy Inspector of Government, whose absence has hampered the full realisation of the inspectorate's mandate.
The President and the EU envoys recognised that public procurement plays an important role and value for money and must, therefore, be achieved in any event when public money is at stake.
They agreed to further explore possibilities of financing infrastructure.
According to the statement, the envoys commended the role Uganda is playing in supporting the peace process in Somalia through AMISOM and the good working relations within the European Union Training Mission for Somalia.