Corruption: Have the donors lost the moral high ground? By WILLIAM G. NAGGAGA | Monday, March 4   2013 at  11:30

Uganda's Prime Minister Amama Mbabazi. His office was recently at the centre of a major corruption scandal that drove donors to demand their misappropriated money be refunded by the government. PHOTO | NATION MEDIA GROUP 

Since the massive corruption scandal in the Office of the Prime Minister (OPM) broke out a few months ago, the donor community suddenly woke up to the cancer that has been eating away Uganda in the past 20 years or so. It is not that they are hearing of corruption for the first time. It has been documented that Uganda has been losing over $500 million per annum through corruption perpetuated by politicians and their cronies and by highly placed civil servants in various ministries. Other public servants in juicy parastatal bodies have also actively participated in this ‘god sent’ looting bonanza.

One can safely say that the country has been shipwrecked on ‘Corruption Island’ with the chosen few doing the eating and rest of the population looking on with a mixture of anger, envy and admiration of the lucky few. In the meantime, most basic social services have ground to a halt and the few that exist are in such a sorry state that they don’t deserve mention. But the donors have all along been singing praises to Uganda for achieving a sustained annual growth of 6 per cent and over, making it one of the world’s fastest growing economies!

These figures churned out by respectable economists in the World Bank, International Monetary Fund, Bank of Uganda and the Ministry of Finance, to mention but a few, tell less than half of the story. They only look at GDP growth but don’t seem to care about how this growth has been distributed and whether it has made any impact, especially on 80 per cent of the country’s population that lives in the rural areas; that are worse off today than they were in the 1960s and 1970s.

In those bygone days, the country boasted of such exports as coffee, cotton, copper, tea, tourism and tobacco which either directly or indirectly benefited the rural peasants. The destruction of cooperatives and the coming into existence of ruthless middlemen have crippled the cotton and coffee industries.

No 'growth experience'

Uganda, which was exporting annually on average three million bags of coffee in the 1970s is still exporting the same amount now while Vietnam has climbed from 800,000 bags in 1987 to over 17 million bags annually today, making it the second largest coffee exporter in the world after Brazil. Cotton production has slumped from a one-time high of 500,000 bales in the 1970s to an average of 250,000 bales per annum.

Cotton is no longer an attractive crop for farmers and the previously vibrant cotton growing regions like Teso, Bukedi, Lango, Busoga, etc., have sunk into deeper poverty. Most peasants in Uganda are no longer participants in the cash economy and are not part of the 6 per cent GDP growth that Uganda has been boasting of for over 20 years! So where is this growth and who is partaking of it? I am informed Kampala generates or partakes of over 60 per cent of the country’s GDP and since most Kampala residents are poor, the ‘growth-experience’ is for the lucky few.

When the OPM mega heist came to light, donors were this time outraged, many demanding a refund of their money and indeed the government obliged. Over $14 million was withdrawn from the Consolidated Fund to refund some donors. The Ministry of Finance promised to refund others who wanted their money back. If the money was stolen and thieves are known, recovery should be from them instead of raiding the Consolidated Fund. I believe the government was looking for an easy way out – appease the donors so that more aid starts flowing again while it takes its sweet time in dealing with the culprits. Judging from past scandals, most of the culprits will go scot free.

By accepting to be refunded from taxpayers’ money, the donors lost the moral high ground. With due respect, donors should stop pontificating about good governance and fighting corruption when their own actions help fuel and abet corrupt practices.

US ambassador Scott DeLisi was right when he said that corruption was the result of weak government; if by that he meant weak governance structures and absence of the political will to eradicate the scourge. But donors should go the extra mile by actually freezing all official aid until the government gets serious on eradicating corruption. That’s when Ugandans will know they are serious.

Mr Naggaga is an economist, administrator and retired ambassador.