Whereas Uganda continues to score fairly high in terms of debt sustainability, many glitches continue to chock foreign aid effectiveness, something that puzzles research experts, economists and government bureaucrats.

This observation arose during a validation workshop held in Kampala to review and assess the first African Centre for Economic Transformation (ACET) draft country report for Uganda in light of the changing development finance landscape.

Global Risk Insights reports Uganda’s ratio of aid-to-GDP to have peaked at 19% in 1992, before dropping to 10% over the last two decades. Maris Wanyera the Acting Commissioner Macroeconomic Policy Department, Ministry of Finance cites the ratio of Aid-to-GDP to be 13%, lowest in the East African region.

According to ACET draft findings, the 2012 office of the prime minister corruption scandal led to aid suspension and reductions, where OECD sector and budget support reduced to 4.5% in 2013 from 9.2% in 2006.
The draft report recommends that Uganda carries feasibility studies and sets up multi-stakeholder monitoring units prior to disbursement of donor funds to target sectors. This shall minimize aid misuse and ease accountability, monitoring and evaluation.

The report further calls for transparency among Ministry of Finance Working Committees to enable civil society participation in the evaluation of external aid.
The report applauds stringent donor demands such as accountability, asking government to shun substandard contracts and build capacity of it expertise at all levels.

Cate Najjuna, an Economic Advisor at the Danish Embassy commended the report saying its recommendations match the Danish aid requirements. “Quarterly auditing and reporting of foreign aid allocations (Danish aid demands) are major conditions which even Ministry of Finance relies on,” She explained.

On matters pertaining laws and ethics, Maris Wanyera told participants at the workshop that Ministry of Finance is pushing for the passing of the Fiscal Ethics Paper, which shall guide the use of foreign aid. Wanyera added that Public Financing Management Act amendment also seeks to ensure the similar course in both government and foreign drawn funds.

While presenting the draft findings, Dr. Edward Brown, Director Policy Advisory Services- ACET highlighted limited private sector participation in the utilization of External Development Finance (EDF) and lack of well-established coordination among ministries as impeding realization of aid related growth.

He cautioned that sector budgets must be aligned with the National Development Plans (NDPs), to ensure aid effectiveness.