Aid and Poverty game in Uganda

Aid and poverty game in Uganda.
The Daily monitor of Tuesday, February 5, 2008 carried a story titled “Review aid policy, Germany President tells donors” .The Germany President, Mr Horst Kohler pointed out that the international community has to give more attention to Africa by working on more supportive and equal rather than imposed western aid terms. I concur with his views.
Aid is given for many different purposes and in many different forms; it is therefore not plausible to argue that aid never works. However, what is clear is that despite Uganda having been a beneficiary of a lot of aid for the last 22 years, poverty is still with us and is not about to go away.
Stringent conditions are attached to aid funds that have little relevance to Uganda’s. Take the example of the "structural adjustment policies" promoted by World Bank and IMF. These policies required Uganda to concentrate on privatization, and debt servicing at the expense of providing education, health, and social care to her citizens. The result is increased poverty
Foreign aid has more benefits for donors than recipients. In a report released by Action Aid in June 2005, the organization claims that two-thirds of donor money goes back to donor countries and, thus, is not available for poverty reduction in developing countries. In addition to a large portion of funds going to foreign consultants, the report argues that donor governments often require money to be spent in certain ways.
EURODAD (2006) in its report provocatively titled “World Bank and IMF conditionality: development Injustice” examined the conditions that the World Bank and IMF attach to development finance to poorest countries. The report reveals that impoverished countries face an acceptably high number of conditions in order to gain access to World Bank and IMF development finance .Uganda for example faced a staggering 197 conditions attached to its W/B fifth Poverty Reduction Support Credit Issued in 2005.
Additionally, the colonial past or geo-political objectives of donors take precedence over poverty reduction in the aid game. William Easterly (2005) in his article titled “Money is not a cure for Africa's poor”, indicates that while the cold war has ended, other emerging trends in geo-politics, for example the “war on terror”, mean that rich countries will always need allies among poorer nations, and transfer of resources will be one way to achieve this.
Likewise, Aidan Hartley (2005), in his report titled “Aid helps the rich at the expense of the poor”; argues that aid to Africa has not worked over the last 50 years because it enriches the big men at the cost of ordinary people. He contends that Foreign aid weakens, the state in Africa, and the only people who grow stronger are the donors. He avers that aid damages the prospects for ordinary people to better their lives, and turns them into victims.

Also due to IMF concerns about safeguarding macro-economic stability in Uganda, government has been constrained from spending the bulk of aid received in recent years A report by independent Evaluation Office of IMF (2007) titled “IMF and aid to Sub-Saharan Africa”, contends that governments in low –income countries bound by an IMF Poverty Reduction and Growth Facility spent on average, only 28 percent of aid received during 1999-2005.Then why give aid that recipients are not allowed to utilize?

Corruption in Uganda is a major obstacle to making aid effective and has worsened the problem of aid game. Corruption exists mainly in procurement, public service pay roll and manifests itself in the following forms: abuse of office, fraud and embezzlement, misappropriation of funds and assets, paying for undelivered goods and services, paying salaries to none existing workers (ghost employees), disappearance or destruction of official records to destroy evidence, false declaration of imports and exports, bribery and extortions, over / under invoicing, demanding for commissions on work done and nepotism.

In light of the above increasing productivity and competitiveness of our products, agro processing, enlarging markets or increasing demand, zero tolerance to corruption, good governance and proper implementation of poverty eradication frameworks such as PEAP and PMA are the only or best ways of sustaining economic growth not aid

Ambrose Bugaari

Specialist in Enterprise Development