DGF departure to take trillions from economy

European Union delegates in Kampala recently. Activities of DGF are financed by Denmark, Ireland, Austria, UK, Sweden, Norway, and the EU. PHOTO | FILE

What you need to know:

  • An addendum to the memorandum of understanding (MoU) developed in an attempt to resurrect the DGF along the lines declared publicly by President Museveni did little to convince the donors.

The Democratic Governance Facility (DGF) will cease to exist in Uganda in less than three months, ending a long drawn-out fight between the authorities in Kampala and European donors.

Sunday Monitor understands that “no new mechanism of funding” has been floated thus far. Highly placed sources also told us that the fate of DGF was long decided before President Museveni ordered Finance Minister Matia Kasaija to immediately suspend the donor facility. 

Mr Museveni accused DGF of bankrolling organisations and activities to undermine his government. 

The donors had, we are told, reached the end of their tether due to intimidation, harassment and other forms of abuse meted by state agents against beneficiaries of the multi-billion facility.

In June President Museveni agreed to lift the suspension on the activities of DGF in Uganda. Sources tell us this was a charade as the fate of the facility had long been decided, with the conditions put forward by the incumbent “an attempt to save face.”

An addendum to the memorandum of understanding (MoU) developed in an attempt to resurrect the DGF along the lines declared publicly by President Museveni did little to convince the donors.

Like with the ban on Facebook, which remains in force more than two years since President Museveni made the directive, the government had dug in, publicly.

A press statement issued by State House following the announcement to lift the ban read in part: “The President’s promise came following an appeal by Hon Mortensen [Flemming Møller] and the Danish ambassador who said that the project has only six months left to elapse. The President said he would formally communicate the position to the relevant government departments.”

Differing accounts

However, two separate sources told Sunday Monitor that Mr Mortensen, the Danish minister for Development Cooperation, had actually come to the country to meet some DGF partners and formally communicate to the government that the project was over.

“When the Danish minister came to Uganda, he had come to tell the President that he was closing DGF. The President and his team learnt of this and called the minister and that is how the lifting of the suspension was agreed,” a source privy to what transpired says, adding, “The allegations of representation were for saving face. The Ugandan State could not sustain, with evidence, the allegations it was making. There was no basis.”

The DGF was established in July 2011 by eight development partners (DPs) as a five-year governance programme aimed at providing harmonised, coherent and well-coordinated support to state and non-state entities to strengthen democratisation, protect human rights, improve access to justice and enhance accountability in Uganda. The partners included Austria, Denmark, Ireland, the Netherlands, Norway, Sweden, the United Kingdom and the European Union.

The first phase ended in 2016 but was renewed for another five years. DGF II was intended to end in 2022.

“The fund is not coming to an end because of government pressure. Phase II was scheduled to end in December 2022 anyway. It was expected to be renewed of course. The renewal has been halted because of the government animus towards the project,” lawyer Nicholas Opiyo said in an interview.

He added: “The suspension of the funding mid through its second phase as well as increased negative rhetoric and false salacious accusations of involvement in subversive activities undermined the project, disrupted its operations and endangered the lives of staff members of the fund. It subsequently contributed to the decision of the development partners not to renew the project beyond 2022.”

Before his retirement, former Foreign Affairs minister Sam Kutesa is reported to have led a team of government officials that apologised to the European donors over the “false and outlandish” accusations made against DGF and its partners. It was too late. The damage had been done.

Persona non grata

Ahead of the 2021 general elections, the government declared Marco de Swart, a programme manager and the fund’s lead on elections, persona non grata. This meant he was prohibited from entering Uganda. Simon Osborn, the EU advisor on elections in Uganda, was also deported from the country.

This publication has previously detailed the numerous cases in which projects receiving funding from DGF, the EU and other donors have faced the wrath of the state in the past few years.

On September 7, the High Court ruled that the Financial Intelligence Authority (FIA) has no power under the Anti-Terrorism Act, 2015 (as amended), to order the freeze of bank accounts of organisations in the absence of evidence leading to its satisfaction that organisations are financing terrorism activities.

High Court Justice Musa Ssekaana reasoned that the freezing of bank accounts of the Uganda Women’s Network (UWONET) and the Uganda National NGO Forum (UNNGOF) by the FIA was illegal and irregular.

The two NGOs’ accounts were blocked on the orders of FIA in November 2020. It was alleged that the FIA had received intelligence reports from national security agencies that the organisations were involved in terrorism financing activities. 

The failure by the FIA to adduce any evidence that it claimed to have relied on to freeze the bank accounts has been cited as an example of government’s efforts to cripple the civic space in the country.

New low

As the DGF departs, relations between Mr Museveni’s government and the European Union (EU) are strained on a new front. This follows a vote by EU lawmakers, which seeks to compel Uganda, Tanzania and the Total Energies SE to delay development of the proposed East African Crude Oil Pipeline (EACOP) for at least one year.

Mr Museveni and key members of his government have since gone on the offensive. The President this week called the EU lawmakers “shallow, insufferable, egocentric people who think they know everything.” He also insists that Uganda’s commercial oil production will start in 2025.

Executive muscle

Several sources have also confirmed that President Museveni has not dropped plans to place the Justice Law and Order Sector (JLOS)—including the Judiciary—under the Office of the President. The JLOS sector stands to be one of the biggest losers when—not if—DGF shuts up shop in Uganda.

The plan whose implementation is—according to one source—“quiet” has caused unease among some members of the Judiciary. Sunday Monitor also understands that the plan reportedly has the support of some government hotshots.

The National Planning Authority (NPA) on the pretext of “delivery of common results within a specified timeframe” is championing the proposal.  The NPA plan—presented by Prof Pamela K. Mbabazi—involves changing the budgeting cycle for JLOS institutions. The Judiciary and the other JLOS stakeholders, according to Prof Mbabazi, will fall under Human Capital Development, Governance and Security Programme.

“This arrangement places the Judiciary under the Office of the President, which has been designed as the lead Ministry for Governance,” Prof Mbabazi is reported to have said.

Judiciary protests

On October, 22, 2020, the Judiciary led by Chief Justice Alfonse Owiny-Dollo protested the move. According to the Judiciary’s own statement seen by Sunday Monitor, Chief Justice Owiny-Dollo termed the NPA proposal as “unconstitutional” given that the Judiciary “is an arm of government supposed to enjoy its independence in terms of planning and budgeting.”

Justice Benjamin Kabiito, the chairperson of the Judicial Service Commission, is also quoted in the same statement opposing the move on grounds that it denies “institutions their votes as is the practice under the provisions made under the Constitution.”

Other members of the Judiciary on record as having protested the move include Deputy Chief Justice Richard Buteera, Principal Judge Flavian Zeija, Chief Registrar Sarah Langa Siu and heads of different JLOS institutions.

Mr Pius Bigirimana, the Secretary to Judiciary, however, called for more meetings “with different stakeholders, so that the Judiciary can be heard as an independent sector aligned to the programmatic approach of NPA.”

Whether the move goes through or not, sources say that contemplating it is emblematic of Uganda’s narrowing civic space.

Big losers

Currently, organisations propped by the DGF would be preparing their budgets and applying for fresh funding. The memo they have, however, received is to complete their work and or return the funds not utilised.

Interviews with people with close knowledge of DGF operations indicate that about 100 direct employees of the fund will be out of work in the next three months. These, though, are at the tail end of the food chain.

At least 15 state agencies have been receiving funding from the DGF. It is unclear if the cash-strapped government will plug the hole left by the donors. Already, many non-state actors have either had to close shop or are scaling down their operations due to the DGF closing its financial tap. The most affected are entities which made protection of human rights and access to justice their calling card.

“Several organisations across the country that solely depend on DGF will have to close. People are losing jobs. You are talking direct beneficiaries, spouses, children, suppliers etc.,” a source who spoke on condition of anonymity said, adding, “An upward of $4 billion (Shs15 trillion) was circulating in the economy for five years courtesy of the project.”

Mr Opiyo described impact of the development as “profound on so many levels and will only be felt in its fullest with the passing of time.”

He proceeded to note thus: “Many organisations and programmes across the country that benefited from the grant will lose their grant. It will mean loss of employment (direct and indirect) as well as loss of income, especially to local economies in those areas. The loss is estimated to be in billions of shillings. Many direct beneficiary communities, women, children, persons with disabilities, etc., will lose services that were being provided because of the DGF grant.”

He added: “Importantly, the closure of DGF will further cement the reputation of the country as hostile to civil liberties. This is on top of the already bad reputation that the country is suffering. These sorts of things have implications for investment decisions by foreign capitals, venture funds and other development-support decisions. These impact the private sector as well as the civil society, further drawing funds away from the Ugandan economy. Risk analysts will file reports about a hostile, regressive political climate to many investors who would otherwise bring capital into the Ugandan economy.”

On the flip side, sources say, the contributing partners to the DGF will likely fund specific NGOs directly; although this may not be to the scale of the fund.

DGF beneficiaries

State partners

• Institute of Parliamentary Studies (IPS) 

• Justice Centers for Uganda (JCU) 

• Kasese District Local Government (KDG) 

• Kitgum District Local Government (KiDG) 

• Ministry of Lands, Housing and Urban Development (MoLHUD) 

• National Bureau for NGOs (NGO Bureau) 

• Nebbi District Local Government (NDLG) 

• New Vision Printing and Publishing Company Limited (Vision Group) 

• Parliament of Uganda (POU) 

• Public Interest Law Clinic, Makerere University (PILAC) 

• Refugee Law Project, Makerere University (RLP) 

• School of Women and Gender Studies, Makerere University (SWGS) 

• Uganda Human Rights Commission (UHRC) 

• Uganda Law Council (ULC) 

• Uganda Law Society (ULS)

Non-state partners

• ActionAid International Uganda (AAIU)

• Advocates Coalition for Development and Environment (ACODE) 

• African Centre for Media Excellence (ACME) 

• Africa Freedom for Information Centre (AFIC) 

• African Centre for Energy and Mineral Policy (ACEMP) 

• African Centre for Trade and Development (ACTADE) 

• African Centre for Treatment and Rehabilitation for Torture Victims (ACTV) 

• African Leadership Institute (AFLI) 

• African Youth Initiative Network (AYINET) 

• Akina Mama wa Afrika(AMwA) 

• Alliance for Finance Monitoring (ACFIM) 

• Amuria District Development Agency (ADDA) 

• Anti-Corruption Coalition Uganda (ACCU) 

• Centre for Governance and Economic Development (CEGED) 

• Centre for Basic Research (CBR) 

• Centre for Women in Governance (CEWIGO) 

• Civil Society Budget Advocacy Group (CSBAG) 

• Community Driven Network Uganda (CODNET) 

• Community Integrated Development Initiative (CIDI) 

• Ecological Christian Organisation (ECO) 

• Food Rights Alliance (FRA) 

• Global Rights Alert (GRA) 

• Gulu Women Economic Development and Globalisation (GWED-G) 

• Human Rights Network for Journalists-Uganda (HRNJ-U) 

• Initiative for Social and Economic Rights (ISER) 

• International Centre for Transitional Justice (ICTJ) 

• Justice Defenders (JD) 

• Kabarole Research and Resource Centre (KRC)


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