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You see how silly is this kind of
reporting?
!) Can we know what Uganda uses the money it
borrows? For reports today indicate that Jinja Owen Falls Dam is about to be
closed due to the cracks in it, yet Britain has been claiming to pump money into
rehabilitating it for now Donkey years although many of us refused that
strategy?
2) Those educated kids in Uganda where do they end
up?
But you see I am basing my reasoning on the ground,
Pat Anderson in London, that is the difference between us.
Em
Toronto
The Mulindwas Communication Group
"With
Yoweri Museveni, Uganda is in
anarchy"
Groupe de communication Mulindwas
"avec Yoweri Museveni, l'Ouganda est dans
l'anarchie"
----- Original Message -----
Sent: Monday, February 21, 2005 10:07
AM
Subject: [Mwananchi] Fwd: Uganda Still
Struggles to Pay it`s Way
Uganda still struggles to pay its way
By Orla
Ryan
BBC News business reporter
Thousands of Ugandan
schoolchildren benefited from free education
when the country's debt
payments were waived.
Celebrity and political endorsement of debt
relief is on the up
That fact alone has convinced many that debt
relief is a good thing.
The issue is high on the political agenda and
Uganda, one of the
first countries in the world to be granted debt relief,
is often
cited as an example of how it can work at its best.
And
yet, when taking a closer look at the country's case, it soon
becomes
clear that it is not quite that simple.
Mounting payments
When
Uganda first got debt relief in 1998, almost a fifth of its
budget was
soaked up by debt repayments.
It was a clear candidate for help, made
so by its strong economic
growth and its willingness to implement economic
reforms.
Under the Highly Indebted Poor Countries' Initiative, the
money that
would have been spent on meeting debt payments was directed
into the
Poverty Action Fund, managed by the Ugandan Ministry of Finance.
Ballot box debate: Poverty reduction is an electoral issue
From there, the money was channelled into the country's health and
education systems.
Without debt relief "they wouldn't have been
able to recruit teachers
and at the same time build classrooms", says
Uganda Debt Network's
founder Zie Gariyo.
"I don't think the same
number would have enrolled [to receive an
education]".
Disappearing cash
The Poverty Action Fund is widely seen as a
success, but it also has
its critics.
This is largely because as
the money slowly filtered through the
country's complex local government
structure, some of it disappeared
into the pockets of officials who
connived with contractors, Mr
Gariyo admits.
Some opposition
politicians say up to half the cash was lost.
We in the West
are total amateurs. We haven't an idea of what goes
on behind closed doors
in African countries
Goal founder John O'Shea
Q&A: DR
Congo conflict
Romilly Greenhill, an ActionAid policy worker who used
to work in the
Ministry of Finance, accepts that there could have been
greater
transparency at local level.
But, she says, the key points
are that the money was spent on poverty
reduction - as promised - and not
diverted to other government
projects, and that the government kept its
spending in those key
areas constant.
Renewed borrowing
The freed-up funds may have gone in broadly the right direction, but
Uganda's debt levels are no more manageable now than they were when
debt relief was first granted.
The proportion of its budget spent
on debt is about 15%, only a
fraction lower than the 1998 levels, Mr
Gariyo says.
"On the debt sustainability issue, it hasn't worked,"
admits Keith
Muhakanizi, acting deputy secretary of Treasury in Uganda's
Ministry
of Finance.
Debt relief should go to the countries
that have used the debt
relief properly and we have used the debt relief
properly
Keith Muhakanizi, Ministry of Finance
Uganda's
fight against poverty
A handful of reasons are put forward for this,
some of which were
clearly beyond Uganda's control.
Not all
creditors who had said they would forgive Uganda's debts did
so, Mr
Muhakanizi points out.
Moreover, Uganda's exports, and thus income,
were hit hard by falling
coffee prices.
But other factors clearly
lie within the government's remit.
Tax collection remains low, with
revenues eaten into by corrupt
revenue officials.
(Uganda scored
less than three out of ten in Transparency
International's 2004 Corruption
Perceptions Index, a level which
indicates rampant corruption. The
anti-corruption body did however
say that this was an improvement on
2003.)
And, crucially, Uganda continues to borrow, this time to invest
in
infrastructure.
Further relief
Mr Gariyo questions the
benefit of this fresh borrowing, which he
estimates to have exceeded $1bn.
For Uganda's debt to be sustainable, he says, the government needs to
borrow less, or only borrow to invest in areas which can create
wealth.
However, when asked what is needed to make the country's
debt
sustainable, Mr Muhakanizi's answer is simple: more debt relief.
Muddy waters
The water is further muddied by political change
in Uganda and by
country's conflict with the neighbouring Democratic
Republic of
Congo.
Congo's mineral riches have helped fuel
conflict in the region
Leading Irish charity Goal's founder, John
O'Shea, says the Ugandan
administration should be denied both aid and debt
relief because of
its aggression in the Congo.
Widespread looting
of Congolese diamonds has boosted sales of
diamonds from Uganda and
fuelled corruption within the country, he
insists.
Within the
donor community, concern is mounting, both about the long-
running war in
the north of the country and about President Yoweri
Museveni's perceived
desire to remain in office indefinitely.
Add to this the fact that the
government increased military spending
at the expense of social spending
in 2003, and Uganda's image is
soiled.
Domestic affair?
Campaigners such as Romilly Greenhill argue that as long as the money
freed up by debt relief reaches the poor, governance issues are a
matter for Ugandans.
"Governance within Africa is a matter for
Africa to sort out," she
says.
"Outsiders can have a role to play
in governance, but the more
conditions you set [for debt relief] the fewer
countries get it.
"Debt relief is a justice question."
Success
story?
The current round of debt relief under the Highly Indebted Poor
Countries' Initiative is close to an end.
With the international
consensus swinging in favour of greater debt
relief, campaigners hope
Uganda will get more.
"Debt relief should go to the countries that
have used the debt
relief properly and we have used the debt relief
properly," insists
Mr Muhakanizi.
Goal's Mr O'Shea sees it
differently.
He believes there is a desire in the West to promote
Uganda as an
African success story, no matter what the reality is on the
ground.
A recognition of Ugandan shortcomings could - some analysts
say - be
seen as amounting to a poor return on the West's investment.
"We in the West are total amateurs. We haven't an idea of what goes
on behind closed doors in African countries," he says.
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