AUGUST 9, 2010: Donors Cut Budget Support

Donors Cut Budget Support

SOURCE: The Independent

By Haggae Matsiko

Kampala — The World Bank and other donors on Monday announced a 10% reduction of their budget support contributions to Uganda due to the government's failure to address "high-level corruption."

The partners who had planned to provide $360 million(Shs 792bn) for the financial year 2010/11, said in a press statement that, "Total budget support disbursements will therefore be at least 10% (80bn) lower than intended, owing to weak progress in a number of sectors and a failure to address high-level corruption."

The financiers include the World Bank, the European Commission and the governments of Austria, Belgium, Denmark, Germany (KfW), Ireland, Norway, Netherlands, Sweden and the United Kingdom, said that their move followed findings of an appraisal of the Government's performance in 2008/09, concluded in early 2010.

The partners said that although there was progress in the health, education and water sectors, performance was weak in the areas of compliance with public financial management principles and civil service reform, which are critical for efficient service delivery and value for money. "There were also disappointing results in the transport sector," the statement adds.

The 11 Joint Budget Support (JBS) Development Partners are more concerned that the Government failed to take effective action in 2008/09 against several high level corruption cases, especially recommendations from the CHOGM audit reports published in 2008.

"More than a year after the CHOGM audit reports were issued, insufficient action had been taken by Government to discipline public officials and recover misappropriated funds," reads the statement.

In the 2008/09 financial year, on-budget foreign aid accounted for 30 per cent of the Ugandan budget, half of the aid was provided as budget support.

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