Donor funding to Uganda should not go to waste; Let’s stop the war, its killing our investments

Written in 1998
By William Kituuka
Uganda is categorized among the heavily indebted poor countries. However, having footed the tight road among the prescribed IMF and World Bank economic policy proposals, Uganda qualified for debt relief and secondment for further donor funding.
Earlier in 1998, Uganda qualified for a debt relief to the tune of US $ 650m. The debt stock according to government’s sources was not less than US$3.6bn, yet the country on average spends about US$140m yearly on debt servicing. So, each Ugandan owed not less than US$180 to international debtors. The debt is serviced at about US$9 per person, while government spends about US$3 per person on health.
President Museveni shortly after assuming office in 1986 said that the country had debt stock of about US$1bn. Today (1998), this had accumulated to US$3.6bn.
What is difficult to understand is the accountability of these donor funds. Much of this money must have been obtained for productive undertakings. However, with the wars, much of these funds are believed to have gone down the drain and the debt burden strangles Ugandans day by day.
In light of the above, it is argued that continued wars in Uganda are a sign of not being grateful to the collective efforts to get the economy on proper footing by concerned international community.
Uganda has received a lot of relief to see through its programmes. Some of such funding includes:
On 30 January 1998, Prof. Joas de Dens Pinheiro of the European Commission signed the national Indicative programme (NIP) for making available a financial envelope of approximately shs 280bn for a period of 5 years;
Uganda received an equivalent of shs 13.2bn for balance of payments support and support for grassroots democracy from the Swedish Government. The agreement was signed mid November 1997.
The European Investment Bank (EIB) availed the equivalent of US$33m to further the enhancement of the private sector financing in Uganda.
An IDA Loan of SDR 12.1m (US$ 17.9m) for the support of key elements of Government of Uganda’s primary objective of poverty reduction by improving capacity to address poverty reduction issues with proficiency, and enhancing the provision of public services.
Other areas where the donor community has poured funds for illustrative purposes include US$ 3.1 m from UNDP for strengthening the Uganda National Bureau of Standards, the goal being to improve the quality of Ugandan products especially for the export markets.
Uganda Electricity board signed a US$64m agreement with an Italian firm to complete civil works at Owen falls dam in Jinja with World Bank funding.
“For Uganda to compete in a global economy, a strong telecommunications sector is essential. Just to catch up to the rest of sub-Saharan Africa, it is estimated that more than shs 500bn was needed to be invested in the telecommunications sector, said Works Minister, John Nasasira.
Looking at the British Government bi lateral aid programme to Uganda, about 30m pounds was being spent on various activities funding per year. For example the NRA demobilization phase III received 1.665m pounds. In the financial year 1994/95, 20m pounds were received as direct budget support.
1.6m pounds were received in the 1st quarter of 1996 for urgently needed drugs for sexually transmitted infections and T.B. There has also been support to establish Mildmay Palliative Care Centre (AIDS) located at Lubowa on Entebbe Highway.
It is right to believe that government continued role in military solutions some of which are outside the country borders is lack of appreciation of the good neighbourhood by the donor community.
In its attempts to boost the economy, government has been open minded with conducive policies to attract foreign investors and joint ventures. However, we have to note that investments go hand in hand with sinking substantial capital much of which may be borrowed capital.
Government has a key role and duty to safeguard the investments of and keep the confidence of such investors.
A few of the investments include: An investment of shs 8bn in the Uganda Breweries Bottling line where Government gets not less than shs 25bn in taxes a year, Sarava Paraa Lodge in the Murchison Falls National Park where shs 6bn has been invested for the refurbishment of Paraa Lodge; Imperial Gourmet products Ltd set up a meat processing plant at Seguku on Entebbe Highway at US$1m.
If Government is serious with the call to have foreign investors around, there must be all the commitment to see to peaceful settlement of conflict and more so, examine the root causes of the perpetual conflicts.