Tag Archives: donors

Donors are satisfied with our record – Museveni

Years ago, I concluded that the NRM government under the leadership of President Museveni has failed to deliver on human security – Ugandans still live in fear, in want and in indignity.

At the United Nations Millennium Summit (New York, September 6-8, 2000) world leaders adopted a Millennium Declaration on peace and security; development and poverty eradication; and human rights, democracy, and good governance. They declared that (1) they would spare no effort to free people from the scourges of war within or between states; (2) they would spare no effort to free fellow men, women and children from the abject and dehumanizing conditions of extreme poverty and (3) they would spare no effort to promote democracy and strengthen the rule of law, as well as respect for all internationally recognized human rights and fundamental freedoms, including the right to development.

These declarations are similar to what is contained in Uganda’s ten-point program launched by the NRM government when it came to power in 1986. As noted above despite these declarations at the national and international levels, massive international assistance and excellent national policy documents Ugandans still leave in fear, want and indignity and the situation is getting worse. Because of space constraints, this article will focus on development and poverty eradication – freedom from want.

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Maintaining good relations with donors has been costly to Uganda

Obote became Prime Minister at Uganda’s independence with the tacit backing of foreign interests. During the initial years he pursued an economic policy based on the World Bank’s recommendation to continue a colonial economic policy of growing and exporting raw agricultural materials in exchange for manufactured products. He would also allow foreign companies to continue business as before October 1962 when Uganda became independent. Besides, being Protestant Obote was preferred to Kiwanuka who was Catholic (W. O. Oyugi et al., 1988).

In the second half of the 1960s Obote began to make adjustments in economic policy including partial nationalization of foreign enterprises. Foreign business interests and their governments were not happy and Obote’s government was shown the exit in January 1971. A gentle giant and pliable Amin was installed. When Amin like Obote before him nationalized private companies, he incurred the wrath of the British and the UK government cut off $58 million of credit to Uganda.

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Donors have no basis to continue praising Uganda as a success story

Since the 1990s, Uganda under the leadership of President Museveni has been described by donors, foreign media and the United Nations as a ‘success story’ and a Washington Consensus ‘star performer’. When the National Resistance Movement (NRM) government came to power in 1986, Uganda had suffered fifteen years of political instability and economic collapse. There was excess capacity of idle labor, land and industries. The latter were performing at twenty percent of installed capacity. What Uganda needed was political stability and some foreign currency with which to import spare parts and inputs like hoes to rehabilitate the economy.

The government restored security in the southern half of the country and development partners provided funds after an agreement was signed with the International Monetary Fund in May 1987 making Uganda a ‘shock therapist’. With the blessing of good weather, excess capacity, resilient and hardworking people, the economy recorded rapid growth reaching 10 percent in mid-1990s albeit from a low base, inflation was tamed by reducing money in circulation, raising interest rates, balancing the budget largely by dismissing civil servants, introducing fees, eliminating some schools or classes and reducing teachers, charging fees for health services and reducing or eliminating subsidies. Because of these reforms, Uganda became a star performer and a successful ‘adjusting’ country.

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Uganda will develop only when donors relax their conditionality

Pre-colonial communities that later formed Uganda produced and traded in local and regional markets and consumed a wide range of products based on local endowments. Economic activities included a variety of crop cultivation, herding livestock, fishing, salt extraction and manufacturing enterprises especially those producing iron, wooden, skin and bark products.

Besides a strategic motive to control the source of the Nile, Uganda was colonized to produce raw materials for British industries and a market for British manufactured products. Lord Lugard stated clearly that the growing population in Europe and industrial expansion led to a desire for new markets for manufactured products, tropical raw materials for British industry and foodstuffs to supplement decreased home production and feed increasing British population (A. Seidman 1972). Consequently, Uganda was reduced to a producer and exporter of raw materials and an importer of manufactured products.

Economic discussions by Ugandans before independence emphasized manufacturing enterprises to transform a colonial economy and society, create jobs and add value to exports. However, the British had a different plan. As independence became inevitable, the British government invited the World Bank to evaluate development possibilities for Uganda. The World Bank’s principal recommendation was that Uganda should accelerate and diversify agricultural production primarily for export purposes (A. Seidman 1972).

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Uganda being wrongly advised

When you press Uganda policy makers privately and anonymously they admit the country is receiving wrong advice most of the time from external advisers and their Uganda surrogates. When you press further for an explanation, they tell you the piper calls the tune, implying that the donors have resources which Uganda does not have.

And when you ask whether in return for loans and grants Uganda has lost control and ownership of the economy, most replies are positive.

When the NRM government came to power in 1986, it resisted – for 18 months – IMF and World Bank advice to abandon the mixed economy model in favor of the neo-liberal one based on market forces and private sector as engines of growth. Finally the message came hone loud and clear when Linda Chalker, former minister in Thatcher’s government advised the government and possibly the president himself that most major creditors believe that “the solution to Uganda’s problems depended on reaching an agreement with the IMF” (New African 1987-88) and its harsh conditions.

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Donors are partly responsible for Uganda’s underdevelopment

Uganda’s economy since independence in 1962 has been driven by donors. Reports from the World Bank, United Nations Industrial Development Organization (UNIDO) and Commonwealth etc made recommendations that have driven Uganda’s economy and society. Dependence on donors for advice, funds, technical assistance and supervision has been particularly strong since the 1980s coinciding with the launch of the Washington Consensus or structural adjustment programs except for a short period between 1985 and mid-1987 when major donors withdrew support because of human rights violations, non-compliance with IMF conditionality and ideological differences. Therefore the donor community has been an integral part of Uganda’s development equation. It should therefore accept praise or constructive criticism as appropriate.

Contrary to popular belief based on GDP and per capita growth rates and macroeconomic stability, Uganda has become an underdeveloped country meaning that the standard of living of the majority of Ugandans has declined. Here are a few illustrations.

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