Donors should review aid cut

Aug 11, 2010

DEVELOPMENT partners plan a 10% cut of their $360m (sh720b) contribution to Uganda’s budget this financial year, citing among others, lack of government commitment to addressing high-level corruption.

DEVELOPMENT partners plan a 10% cut of their $360m (sh720b) contribution to Uganda’s budget this financial year, citing among others, lack of government commitment to addressing high-level corruption.

The Joint Budget Support Development Partners that comprise, among others, the European Union and the World Bank particularly voiced concern over the way the 2007 CHOGM investigations report was handled.

While the public is not privy to information on how the donors might have wanted corruption cases handled, their action is a signal of dissatisfaction with the current process of the law. Although Uganda believes in due process of the law, corruption cases have tended to be difficult to prove under the current legal framework, which calls for an alternative mechanism of dealing with the vice.

That said, the donors should know that the proposed aid cut will in effect impact on the majority poor more negatively than the state bureaucrats. When resource-constrained, governments naturally cut social services expenditure with greater consequences for the poor.

The cut at the time a new National Development Plan (NDP) has been adopted and just two months after the 2010/11 budget is announced, will certainly affect Uganda’s planned development strategy.

The NDP (2010/11–2014/15) aims at creating employment; raising per capita income to middle income level; improving the human development and gender equality indicators; and improving Uganda’s competitiveness and ultimately reduce the proportion of the people living below the poverty line to 24.5% by 2015.

However, due to the aid cut, the 16% planned increase in Government expenditure may now not be realized.

Although Uganda has drastically reduced its donor dependency, 25% of the budget was still expected from donors.

The donors should, therefore, rethink their decision in the spirit of true development partners as more effective strategies are designed to deal with the corrupt.

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