Donors cut Shs70b aid over OPM fraud

Saturday October 27 2012

By Dear Jeanne

Key Western donors have suspended aid to Uganda over alleged corruption in the Office of the Prime Minister that is feared to have led to a loss of more than Shs150 billion.

The follows the release to the donors of a draft report by the Auditor-General, Mr John Muwanga, which found that aid from Ireland, Norway, Sweden and Denmark had been transferred to unauthorised accounts. Ireland alone will withhold €17 million (Shs70 billion).

However, contacted for comment in Kampala yesterday, the Permanent Secretary in the Office of the Prime Minister, Mr Pius Bigirimana, said they had not yet received any communication on the suspension of aid by the European donors. “I do not have any information to that effect and thus I cannot comment on the matter.”

The will be a big blow to the people of northern Uganda, who have been benefiting from the Peace Recovery and Development Programme (PRDP). According to the Irish Department of Foreign Affairs, the Auditor-General’s draft report has documented significant financial mismanagement of the PRDP funds. Sweden and Ireland are Uganda’s major donors.

Mr Eamon Gilmore, the Irish Minister for Foreign Affairs and Trade, said: “The Irish Government will not provide financial support under our development cooperation programme unless it is clear that Irish money is being spent for the purpose for which it was allocated. Pending the satisfactory resolution of this matter, I have instructed that no further aid funding should be provided through Ugandan government systems.”

Sweden’s Aid minister Gunilla Carlsson told Swedish Radio on Thursday: “We’re demanding full clarity now on what happened.” The minister added that Ugandan officials, and possibly politicians, were involved in the embezzlement.


Mr Gilmore said up to Shs66 billion in Irish aid has been put on hold, pending investigations by officials led by the evaluation and audit unit of the Department of Foreign Affairs and Trade. They are here to review the findings of the AG, in close cooperation with other donors.

Auditors from the UK early this month launched investigations into the alleged embezzlement of funds in the OPM. The Irish team will complement the efforts of the UK group and the Criminal Intelligence and Investigations Directorate in the ongoing investigations.

“I have asked our Ambassador in Kampala to underline to the Ugandan authorities the seriousness with which the Irish Government regards the findings of the Auditor-General and our insistence that the funds are restored without delay,” Mr Gilmore said.

The Irish Department of Foreign Affairs praised the Auditor-General for its report, saying it reflected determination to fight corruption.

The European Union spokesperson in Kampala, Mr Simon Kasyate, told the Saturday Monitor that they were keenly watching the OPM as two of their projects were being implemented.
“We, as the EU are running two specific programmes in the OPM, that is AREP on agriculture and the Karamoja livelihood programme at €15 million each. As far as I know, none has been affected but we are aware of the circumstances in the OPM. We are watching the investigation very keenly since EU has no tolerance for corruption,” Mr Kasyate said
Uganda is one of the biggest recipients of Irish aid - it was due to receive €32m (Shs133 billion) this financial year.

Some Shs70 billion of this is channelled through government, and Shs62 billion through NGOs. The draft report that has sparked donor anger covers the period from July 2011 to July 2012.

Last month, the AG launched an investigation into the financial operations at the OPM, following a Daily Monitor story that revealed rot in the office.