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Home Discussion Papers Conflict & Terrorism Foreign aid and corruption: Their relationship and the Ugandan Government’s quandary - Part 2
Foreign aid and corruption: Their relationship and the Ugandan Government’s quandary - Part 2
Written by Catherine Akurut (1) Monday, 04 February 2013 05:35

Part 1 of this paper defines corruption in its generality and offers an overview of the different scales, methods and causes. It presents an overview of corruption in Uganda and states that although several efforts have been established to halt the problem, these have not been vigorously implemented. As such, corruption in Uganda has continued to rise, and currently increases at a massive and more sophisticated scale. In part 2, the paper looks at Uganda as a case study and discusses the most common forms of corruption and the manner in which they occur. These indicate that corruption, in its varied forms, is ubiquitous and without a doubt inescapable.

Due to the rising corruption scandals, most of which have involved the grand theft of foreign given funds, donor countries have suspended foreign aid to Uganda, outwardly striving to advocate for a zero tolerance to corruption in the country. The paper maintains that this donor cut approach, unaided, will fall short of being a lasting solution. Therefore, rather than simply stating corruption scandals and how they present a huge problem to Uganda, the paper attempts to outline solutions to encourage the donor countries’ approach and reverse or minimise the problem. Notwithstanding, different experts have different views on how much influence the West has over the African governments. However, it is believed that Western governments, including the United States (US), have the power to compel several African governments, in particular those that receive a significant amount of foreign aid, to be greatly transparent.(2) In reference to this approach as a means to fight corruption, Uganda will be the country to watch.

The most common forms of corruption in Uganda

Corruption is not perpetrated for any other reason except for the egocentric development of those involved. Because of its prevalence in Uganda, the level of democracy has been significantly low. There have been numerous problems of accountability and transparency to the public, and there has also been a significant level of political instability and a reduction in political competition making the whole political nature in general very intolerable.(3) There are three very common forms of corruption taking place on a massive scale, which disrupt or create a stagnant circumstance for the progress of almost every sector in the nation. These forms of corruption are: bribery, favouritism and nepotism as well as the embezzlement of funds, including but not limited to foreign aid money. The chronic occurrence of the latter led to the discontinuation of aid giving by various international donor countries.

Bribery

Bribery is particularly rampant in autocratic governments. The prevailing phenomenon is that its loyalists are constantly bribed. These occur in the form of special privileges such as first class health care and lavish vacations. Receivers of bribes can also be paid huge sums of money, most of which has been embezzled from foreign aid funds and tax payers’ money or comes from the vast reaps of the several shady privatisation contracts. These loyalists are usually a handful of people in the military, secret police and some very influential persons from the public, whom the government is entirely dependent on for the smooth running of their authoritarian rule.(4)

The occurrence of this phenomenon in Uganda cannot be disregarded. Whether done overtly or discreetly, bribery is a daily part of life in the Ugandan society. The general hypothesis is that an individual must bribe their way through to get certain services from several public institutions. This hypothesis was validated by the East African Bribery Index of 2012, a corruption survey conducted by Transparency International. Among all of the five East African (EA) countries, Uganda stands out as the country with the highest levels of bribery scored at 40.7%.(5) The other EA nations which include Burundi, Kenya, Rwanda and Tanzania scored 18.8%, 29.5%, 2.5% and 39.1% respectively.

Looking at these statistics, Rwanda is the least developed country in EA. The survey report revealed that in Uganda, corruption is extremely high among the service institutions and the Ugandan police tops the list of bribery-prone institutions, followed by the judiciary, tax, land, registry and licensing services, city and local councils, medical services and educational institutions in that order.(6)

The most prevalent form of bribing is the use of money, and usually, the service providers will request a bribe or make a hint pointing towards that suggestion. Certainly, a service will not be provided until a specific amount of money has been paid. As a rule, the service seekers have no option but to oblige, although a few others will maintain a zero tolerance to corruption. Interestingly, some service seekers will offer bribes without being asked. This indicates that corruption has a systematic nature, an aspect that would make it difficult to halt, since most of the populace believes that paying bribes reaps certain benefits that one who cannot bribe would otherwise not receive. The size of bribes range from the judiciary at US$ 220.87, followed by land services at US$ 87.46, tax services at US$ 42.94, the police at US$ 39.22 and education institutions at US$ 28.(7)

Corruption has also occurred overtly at government level. In 2005, Members of Parliament (MPs) were openly bribed with US$ 3,000 each to change a clause in the 1995 constitution that had previously limited a president to only two terms in office.(8) Subsequently, term limits were lifted. This meant that Museveni would have unlimited terms as president. This utterly defied the statement made during his inauguration speech in 1986 about leaders who did not want to leave office. Evidently, the power that had been obtained on the anti-corruption ticket was derailed by the great desire to remain in office. From the above segments and statistics, it is clear that there is no institution in Uganda that is immune to bribery as the bribes exchanged take place in both the least and highest levels of office. This method of corruption has severely affected the social aspect of the Ugandan society. Because bribing has become a tradition in the nation, this has significantly encouraged people to work for individual benefit and not for the common good of fellow citizens. Consequently, people become frustrated by the public service systems and amidst this are increased poverty, the lack of basic needs such as clean water, food, health care services and a huge gap between the rich and poor.(9)

Favouritism and nepotism

In Uganda, the most common form of favouritism is manifested in the job seeking circumstance where there is a total disregard of employment on merit. This particular form of favouritism is extremely out of control. Very often, employers will only hire their relatives, friends and family members to take on positions they are clearly (or necessarily) not qualified for (nepotism), while for the qualified candidates, some employers will ask for money (from men) and sex (from women) if they wish to be offered the position.

In fact, most of the populace is convinced that this is the only way a recent graduate or someone seeking a job to earn a decent salary can get employed. Or better yet, the job seeker ought to know some high-ranking people who have the ability to influence particular employers to offer jobs to particular individuals: the “technical know-who” syndrome. This trend would perhaps explain why unemployment amongst the youth is on the rise in Uganda. Eventually, the seemingly qualified people get stuck in menial service jobs or move into the Diaspora in search for employment which encourages brain drain.

Embezzlement

Nearly all the embezzlement cases in Uganda have involved the grand theft of foreign aid money. One outstanding case was the grand embezzlement of the Global Fund grant, which caused a lot of distress among the Ugandan population, because it involved the grand theft of HIV/AIDS money. The Geneva-based organisation offered Uganda about US$ 367 million in grants to fight HIV/AIDS, malaria and tuberculosis. This grant was meant to strengthen Uganda’s health system, compensate for diagnostics, purchase mosquito nets, to mention but a few. However, following an inquiry into the expenditures of the grant in August 2005, it was discovered that there were certain irregularities which prompted the Global Fund to suspend the grants. Indeed, most of the grant money was embezzled. Subsequent to an investigation commissioned by the president, it was discovered that the Minister of Health at the time and two of his deputies pocketed a huge part of the grant money for their personal use. In addition, it was discovered that the company that handled the grant money had given money to ghost organisations, blown up the costs of several workshops for the staff and falsified most of the accountability reports.(10) These monies were also diverted to other lesser priorities such as sponsoring several individuals to study abroad, instead of addressing the real issue it was meant for: boosting the health care system pertaining to HIV/AIDS, malaria and tuberculosis. The health ministers were held accountable for mismanaging the Global Fund grants, two of whom were exonerated and one still has a case to answer. Nonetheless, all three were sacked by the president, a move that should be adopted for everyone – government official or not – suspected of embezzlement. In addition, the three ministers were ordered to refund all the monies in a special account opened up at the Central Bank.

Another outstanding embezzlement case that forced several donor countries to suspend aid in the same period was the grand theft that occurred in the Office of the Prime Minister (OPM). In October 2012, an audit report was released by the Auditor General indicating that nearly US$ 18.6 million was misappropriated by staff within the OPM.(11) The embezzled funds were meant to develop and improve the capacities and livelihoods of the people in the post-war region of Northern Uganda under the Peace, Recovery and Development Plan (PRDP). Part of the money was also meant to rebuild the severely economically deprived and under-developed region of Karamoja, located in the north-eastern part of Uganda. Immediately following the OPM corruption scandal, several donors were forced to withdraw their support to Uganda. Britain awarded Uganda US$ 6.5 million, which went through the OPM each year.(12) It is this money that has been suspended. Denmark too, suspended all its direct aid to the Ugandan Government. Funds from Denmark contributed to the maintenance of the Human Rights Commission, the Inspectorate of Government as well as the judicial sector, to mention but a few.(13) These were some of the institutions put in place to fight corruption in Uganda.

Other countries which suspended aid to Uganda include Austria, Belgium, Germany, Ireland, Sweden, as well as the European Union (EU) and the World Bank. About US$ 300 million, promised in the budgetary support each year up to 2013, has been suspended.(14) The ultimate purpose of foreign aid is to complement the country’s domestic revenue. Unfortunately, it is the common man, the people in northern Uganda and Karamoja who will suffer the most effects of donor cuts. Economically, the systematic nature of corruption significantly affects Uganda’s economy by slowing down its growth to 4.3% from the proposed 5%, according to the Central Bank. With the donor aid now cut, which is equivalent to 1.3% of Uganda’s gross domestic product (GDP), economic growth will be slowed down by about 0.7%.(15)

In general, the effects of corruption can be major or minor. However, regardless of the level, the impact of corruption on the country and its people is severe. Because corruption has been on the rise in Uganda, there has been (a) the channelling of scarce resources to uneconomic high profile projects and diverting from the much needed resources such as access to clean water, equipped hospitals, high-standard and safe roads as well as schools, (b) an increase in the cost of goods (for instance the infamous sporadic 2012 strikes in Uganda over the high costs of sugar) and services, (c) transferring public wealth into personal property, and lastly, (d) a diminution of the national wealth, among others.(16) Indeed the government – particularly following donor cuts – is unable to remit several of the salaries of vital sections of the public service.(17) Consequently, the government will cut down some of its expenditures, a move that will severely affect several funded programmes, including the National Agricultural Advisory Service (NAADS), Universal Primary Education and Universal Secondary Education.(18) The already agonising slow paced rate of service delivery will become worse, compromising the day to day welfare of the ordinary Ugandan.

Donor cuts to halt corruption not a guarantee – The way forward

The plausible notion is that Western governments, including the United States (US), have the power to compel several African governments, in particular those that receive a significant amount of foreign aid (of which Uganda is a beneficiary), to be greatly transparent.(19) However, there are no clear cut success stories to indicate that the suspension of foreign aid has led to a drop in corruption levels. Therefore, this approach succeeding in Uganda is not guaranteed. Nonetheless, the message the donor countries are endeavouring to communicate to the Government of Uganda and the several corruption culprits – most of whom are government officials, some prosecuted and others acquitted – is loud and clear: “enough is enough.” Notwithstanding, withholding foreign aid money (alone) will not help Uganda achieve the much anticipated goal of making the country corruption free. Indeed, the irrefutable fact of the matter is “a win against corruption means [an enormous] loss for the person in power.”(20)

First and foremost, foreign aid money will most certainly breed corruption if not handled properly. This is because these monies are readily available for theft by the culprits since most of it will not be accounted for and if it is, its handlers will go through great lengths to make an effort to falsify the records to create the impression that the foreign aid money is being used for what it was intended for. Consequently, the funds are swindled in such a systematic manner for personal gain. Because this has always been the case, now more than ever public servants occupying particular leadership positions should reveal and account for their wealth (income, assets and liabilities).(21) Although this idea was drafted over a decade ago, it has not been executed enough. By law, it is required of these leaders to present all their statements for examination. This law was activated by the 1995 Constitution and the initial effort to have leaders reveal their wealth was made in 1997.(22) The Inspectorate of Government presides over this law. However, history indicates that this law governing body has been reluctant. If this practice is adopted unbiased and with poise, corruption in public offices will be almost unheard of.

Secondly, there is an existing school of thought which suggests that the privatisation of state-owned organisations can control the increasing levels of corruption.(23) This is particularly relevant in those public offices where the theft of public funds is extremely huge. The idea is that privatisation will directly reduce the chances for corruption tendencies by reducing the extent of interaction of both the private and public sectors. Within the private sector, it is believed that corruption tendencies will barely crop up because of the existing competitive markets and the methods used for accountability.(24) However, it goes without mention that if this privatisation is not well regulated, fresh opportunities for corruption will surface, and this will be difficult to control.

Subsequent to the latest corruption scam (the OPM scandal), trusting the Ugandan Government with donor funds has proved to be extremely unproductive, since most of the foreign aid money desolately becomes personal income. This has been ongoing and increasing exponentially for several years partly due to lack of transparency and accountability, both characteristics prevalent in most of these corruption cases. Therefore, representatives from the donor countries should start managing all their donor funded projects. This will certainly ensure better productivity, drafting of authentic accountability records and utmost transparency to the public. For instance, for over two months, there were eminent comprehensive discussions (about the OPM scam) between the Irish Department of Foreign Affairs (IDFA) and the Ugandan Government. During this period, an audit and evaluation unit from the IDFA conducted its own enquiry into the OPM corruption scandal. The IDFA concluded that the OPM swindle was “very sophisticated and well-thought-out and involved a high level of collusion at senior level.”(25) Following this enquiry, on 7 January 2013, the Government of Uganda refunded more than US$ 5 million of the Irish aid money, which was part of the Peace Recovery and Development Plan (PRDP) funds, purportedly swindled within the OPM.(26) However, being able to conduct its own inquiry does not mean that Ireland will retract its decision to suspend foreign aid to Uganda. On the contrary, the suspension of aid will remain intact until Uganda proves that it can prevent the embezzlement of their grants. On a positive note, the refunded money will now be spent on education, health and HIV/AIDS projects. It will, however, not go through the Ugandan Government.

Existing among Uganda’s various laws is the Whistleblowers Protection Act which protects all whistleblowers.(27) Passed in 2010, this law reinforces the already existing Inspectorate of Government Act of 2002, the Leadership Code Act of 2003, Public Procurement and Disposal of Assets Act of 2003 and the Access to Information Act 2005, all of which are supposed to fight against corruption in Uganda. The Whistleblowers Protection Act in particular was put in place to protect all whistleblowers who disclose information on corruption and, upon proof of fraud, these individuals shall be rewarded for their grave deed. However, the law is barely practiced and not so many Ugandans are aware of its existence. The Act convincingly states that the identities of the whistleblowers (a) shall remain confidential, (b) receive 5% of the money that has been recovered from a corruption scandal and (c) shall be protected by the state against court prosecutions.(28) The reward in particular acts as a token of appreciation for revealing and is paid within six months after the scammed money has been recovered. In addition, the Act also provides a five year prison sentence for anyone who reveals the identities of the whistleblowers, and in case their lives are threatened, the State shall provide security for them plus their family members.(29) Whistleblowing should be widely adopted particularly in public service institutions and sectors which are severely prone to corruption. The media should assist in sensitising the people about the existence of such laws and the various institutions and personnel to contact once people have any information on corruption to divulge. The efficacy and a wide spread public awareness of the Whistleblowers Protection Act and other such laws will encourage vigilance and alert all corruption culprits not to engage in this criminal activity.

And lastly, the suspension of foreign aid money as a means to fight corruption does not mean that Uganda cannot fight corruption. On the contrary, the country has a strong legal and institutional framework to fight corruption. In fact, according to a Global Integrity report of 2007, Uganda’ s legal framework as far as corruption is concerned was ranked the best in Africa at 90%.(30) Albeit, the application and enforcement of these laws has always been discriminatory, politicised and used to fight political and personal vendettas.(31) This emphasises the lack of political will on the part of the government to rigorously and effectively implement these laws. In cases where these laws are implemented, this is done selectively depending on the corrupter’s socio-economic status as well as their attitude and level of support of the ruling party (National Resistance Movement (NRM). In addition, the stake holders supposed to implement these laws (such as the police and the courts) are equally corrupt and yet, they should be the core fighters of the war against corruption. Without a doubt, the notion that the Government of Uganda needs overhaul is now clearly identifiable. Although the incumbent regime came to power on an anti-corruption ticket and is always priding itself as being able to win the war against corruption, its capability to do so is now questionable. This attests persuasive arguments that suggest that corruption in Uganda can be curbed by ousting the incumbent regime.(32)

Concluding remarks                             

Despite the fact that a significant amount of foreign aid money withheld will severely affect Uganda’s economy, this approach as a solution on its own will not justly address Uganda’s enormous corruption problem. However, Ugandans should not be dismayed. On the contrary, this should be an eye opener for them to rise up and take action. Efforts to curb corruption in Uganda need to be channelled to the population itself. Even though donor cuts will ensure that no more foreign aid is swindled – because no more will be granted to the country for some time – this approach alone will not ensure transparency within the government and public offices. The public of Uganda should thus, encourage the donors’ reaction and demand for continued transparency within every public institution and sector.

Conversely, Ugandans seem to have been defeated and accepted the status quo of corruption engulfing the nation. Often the populace will pressure the government to eradicate corruption and exercise transparency only to be overcome by trepidation, with the numerous protests about the issue all fading out as fast as they began. In order to eradicate poverty, improve health services, infrastructure and, in general, ensure significant and realistic development in Uganda, this intolerable tradition needs to stop now more than ever. It is only through transparency of these public offices that the systematic nature of corruption in Uganda can be deterred, and who better to encourage this than the population itself. Otherwise, any effort to reverse this tradition will be futile if the population of Uganda – and not just the stakeholders – is not involved in the fight against corruption. After all, the power of the people is greater than those in power, as witnessed during the Arab revolutions which started in Tunisia in January 2011 and spread to Egypt and soon after to Libya.

NOTES:

(1) Contact Catherine Akurut through Consultancy African Intelligence’s Conflict and Terrorism Unit ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ). This CAI discussion paper was developed with the assistance of Denine Walters and was edited by Nicky Berg.
(2) Hanson, S., ‘Corruption in Sub-Saharan Africa’, Council o Foreign Relations, 6 August 2009, http://www.cfr.org.
(3) ‘What are the effects of corruption’, Transparency Ethiopia, http://transparencyethiopia.org.  
(4) Pei, M., ‘Corruption: Government by corruption’, Forbes, 22 January 2009, http://www.forbes.com.
(5) Bogere, H., ‘Uganda most corrupt in East Africa’, The Observer, 31 August 2012, http://www.observer.ug.
(6) Ibid.
(7) Ibid.
(8) Tripp, A.M., ‘The politics of constitution making in Uganda’, http://www.usip.org.    
(9) ‘What are the effects of corruption’, Transparency Ethiopia, http://transparencyethiopia.org.  
(10) Biryetega, S.R., ‘Uganda’, Global Integrity, http://back.globalintegrity.org.  
(11) ‘Ugandan Government plans budget cut after aid freeze’, The East African, 5 December 2012, http://www.theeastafrican.co.ke.
(12) Wanambwa, R., ‘World Bank to ‘review’ aid to Uganda over abuse of funds’, Daily Monitor, 15 November 2012, http://www.monitor.co.ug.
(13) Ibid.
(14) Mpagi, C.M., ‘Uganda donor aid cut is an eye opener’, Business Daily, 5 December 2012, http://www.businessdailyafrica.com
(15) ‘Ugandan Government plans budget cut after aid freeze’, The East African, 5 December 2012, http://www.theeastafrican.co.ke.
(16) ‘What are the effects of corruption’, Transparency Ethiopia, http://transparencyethiopia.org.   
(17) Mpagi, C.M., ‘Uganda donor aid cut is an eye opener’, Business Daily, 5 December 2012, http://www.businessdailyafrica.com
(18) Kiggundu, E., et. al., ‘Aid cuts begin to bite’, The Observer, 4 December 2012, http://www.observer.ug.  
(19) Hanson, S., ‘Corruption in Sub-Saharan Africa’, Council on Foreign Relations, 6 August 2009, http://www.cfr.org.
(20) ‘Poverty and corruption in Africa: Community voices break the cycle’, Centre for Transparency and Accountability, 2012, https://docs.google.com.
(21) Tumwesigye, J., ‘Public declaration of wealth as a weapon of fighting corruption in Uganda’, International Anti-corruption Conference (IACC), http://www.8iacc.org  .
(22) Ibid
(23) ‘Causes of and conditions of corruption’, ISS, September 2001, http://www.iss.co.za.
(24) Ibid.
(25) Ibid.
(26) ‘Uganda refunds stolen Irish aid money’, Daily Monitor, 8 January 2013, http://www.monitor.co.ug.
(27)  ‘The Whistleblowers Protection Act, 2010’, http://igg.go.ug.
(28) Among, B., ‘Whistle-blowers law comes into force’, New Vision, 4 May 2010, http://www.newvision.co.ug
(29) Ibid
(30) Mpiriirwe, J., ‘Uganda: Laws alone will not help’, Global Integrity, 10 March 2008, http://www.globalintegrity.org.
(31) Businge, J., ‘CSOs, fault Museveni on corruption’, The Independent, 2 December 2012, http://www.independent.co.ug.
(32) Mugerwa, Y., ‘Corruption scandals: Is Museveni digging a political grave for NRM?’, Daily Monitor, 25 November 2012, http://www.monitor.co.ug.  


Written on Monday, 04 February 2013 05:35 by Catherine Akurut (1)

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