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Bullied by donors: aid cuts undo national planning in Uganda
02 June 2010
By Julius Kapwepwe Mishambi
Uganda’s Budget Framework Paper for financial year (FY) 2010/2011 highlights how unpredictable donor behaviour distorts consistency in developing county planning and undermines the effectiveness of aid.
Despite donor commitments in the Paris Declaration on aid effectiveness (2005), at least 1.4 billion people in the world continue to live in absolute poverty in 2010. This clearly casts doubt over the effectiveness of aid. If aid were reliable, these terrible figures would have greatly reduced by now.
In Uganda, the government was allocated approximately 1.3 trillion Uganda shillings (USD 600 million) towards the construction of 10,820 km of a national road network, 23,000 km of district roads and approximately 30,000 km of community roads, beginning in FY 2008/09. This budget, however, was cut to 481.26 billion shillings in FY 2009/10 and now to the proposed 261billion shillings in FY 2010/11. This diversion is a direct result of aid cuts by foreign donors, including Denmark, Sweden and the European Union. Furthermore, recent threats of donor budget cuts in the health sector and other sectors will further undermine citizens’ trust in the government to deliver on its promises. The government should carefully communicate to its citizens about the challenges if faces; including the difficulty it has second-guessing and dealing with donor behavior.
Yes, good (i.e. predictable) quality aid can contribute to saving lives and supporting a country to trade its way to prosperity, but not through the carrot-and-stick donor behavior to Uganda. Aid has, for example, supported Uganda by enabling millions of school-going age children to attend primary schools, and by increasing access to anti- HIV/AIDS. Also, the new 72 km Bugiri-Jinja road – a real success strengthening Ugandan infrastructure – is thanks to EU aid. Globally, at least 33 million more children are in school today, thanks also to the scale up of aid volumes which resulted from the commitment to achieve the Millennium Development Goals (MDGs) in 2015.
But the inconsistency of donors shows that meeting the MDGs in 5 year’s time is a fantasy.
Why? In 1970, developed nations committed a mere 0.7 per cent of their national income (which then became a UN target) to developing countries. However, a shortfall of about USD 3 trillion was outstanding by April 2010. By the end of 2009, just a handful of countries (Denmark, Norway and Sweden, Luxembourg and the Netherlands) had met or surpassed the 1970 commitment. The US's eloquent Obama, under current strides, will only meet the 1970 target around 2055, just like most other donor countries.
So can Africa, and Uganda in this particular case, rely donor commitments to fund her development aspirations? No. One sure way to building our self-reliance is to build our own capacities to undertake prudent public finance management. Civil society organisations in Africa, such as the Uganda Debt Network, have been specifically instrumental in challenging the government to ensure transparent and accountable mechanisms in respect to public finance management. By its initiative and local savings, Uganda started the Roads Fund and Energy Fund baskets. Under the Energy Fund, for instance, a 400 megawatt electrical plant is under construction and will be commissioned around 2012. What have we learnt from operating the Roads and Energy funds that should inform and call for similar funds in other sectors? How do we support the Uganda Revenue Authority to rid itself of corruption and prolific tax evaders perpetuated by several companies connected to politicians and friends of the regime? How best can we use our own resources before looking elsewhere?
How best governments of developing nations, like Uganda, can learn from channelling their own generated resources into initiatives such as the Roads and Energy funds, will tell us how far we can continue working towards self-reliance. Developing nations should pursue their own agenda and work towards policy coherence as we strive to overcome being bullied by donors.
For more information, contact: julius.kapwepwe5[at]gmail.com