Government war on donor dollars

President Museveni’s letter dated January 2, in which he suspended the operations of the European donor-funded Democratic Governance Facility (DGF) project, appears to be just a continuation of a sustained effort to clamp down on inflow of foreign funding to activities that the ruling establishment suspects could subvert its hold on power. 

Before the decision to suspend the €100m (about Shs440b) DGF project, the government had come down hard on some civil society and other organisations, and even individuals who had received money into their accounts around the last quarter of last year.

Mr Nicolas Opiyo, the executive director of rights activist group Chapter Four, was in December last year arrested and charged with money laundering, with the State claiming Mr Opiyo acquired $340,000 (Shs1.2b) through the organisation’s account on October 8, 2020 “knowing at the time of receipt that the said funds were proceeds of crime”. 

Mr Opiyo, who is out on bail pending trial, insists that the money was for running his organisation and came from one of their regular donors.   

Mr Opiyo told Saturday Monitor: “The government was driven by paranoia, thinking that everyone who had huge sums of money on their accounts would use it for subversive activities. The other issue is that the intelligence services are highly unintelligent, you have crime intelligence staffed with military men who act on unprocessed information. 

That is why the government is making so many mistakes in this regard.”
Mr Opiyo suspects whoever received a significant amount of dollars into their bank accounts around September last year became a subject of investigation and many had their accounts frozen. 

Some of those affected were individuals, while others were organisations. 

Some of the individuals whose bank accounts were blocked protested on social media and other forums. 
The government froze accounts of four NGOs towards the end of last year, including the bank account for the Uganda National NGO Forum.

The operation also affected some unexpected victims such as the Nabagereka Foundation, an organisation that belongs to the Queen of Buganda Kingdom, Ms Sylvia Nagginda. 

Sources close to the matter have told Saturday Monitor that the accounts of the Nabagereka Foundation were subsequently unfrozen after the Nabagereka quietly engaged the government over the matter. 

Sources say the government was concerned that money originating from foreign sources could end up financing the campaigns of the ruling party’s opponents, especially the National Unity Platform (NUP) candidate Robert Kyagulanyi, aka Bobi Wine. 
Mr Ofwono Opondo, the executive director of the government-owned Media Centre, seemed to confirm this suspicion when he on Thursday accused NUP of receiving money from abroad to finance their campaigns. 

To this accusation, NUP spokesperson Joel Senyonyi said their party did not receive any money from abroad and even failed to fund the nomination of many individuals who intended to run on its ticket in various parts of the country.

Whereas Opposition parties seemed starved of funding, the ruling National Resistance Movement (NRM) party spent big in the run-up to the election, buying the premises that house it at Kyadondo Road in Kampala, distributing bicycles to each of their village chairpersons across the country, motorcycles for each party sub-county chairperson, and paying nomination fees and considerable campaign facilitation fees for each of its candidates at every level, among other expenses.  

  As the intelligence organisations raised their antennas to keep foreign funding from falling into the hands of the Opposition, available information further shows that State officials held several meetings with a number of rich businessmen, especially in Kampala, and pressed them not to fund, especially Mr Kyagulanyi’s campaign. 

The war on foreign funding of what the powers that be suspect to be subversive activities has been on for a while.

 In the run-up to the 2016 elections, a number of NGOs that were suspected of harboring anti-NRM intentions had their accounts frozen. They included the Uhuru Institute, ActionAid, and the Great Lakes Institute, among others. 

Mr Museveni has spoken on various occasions against what he calls attempts by foreigners to undermine his government. He has made this claim many times over in regard to Mr Kyagulanyi, but he made the same allegation earlier.
 
At his swearing-in ceremony on May 12, 2016, for instance, Mr Museveni said he rejected puppetry, which he ascribed to his then principal opponent, Dr Kizza Besigye. 

It was a swearing-in ceremony attended by Robert Mugabe, then president of Zimbabwe, and Gen Omar al Bashir, then president of the Sudan.

 Mugabe, who would subsequently be deposed by the army and later pass on, had spent years criticising the West after many years of cozying up with them in his earlier years in power. 

At that time, Gen Bashir was indicted by the International Criminal Court (ICC) and Uganda, being a signatory to the Rome Statute that set up the court, was duty-bound to arrest him and hand him over for prosecution. 

But as if inviting an indictee of the ICC to his swearing-in was not enough, Mr Museveni used the opportunity to praise Russia and China for not meddling in the affairs of Uganda and accused the West of arrogance. 

The Western diplomats who were in attendance walked out on him as the ceremony progressed. 

Handouts blocked 
GiveDirectly, an NGO that gives direct cash donations to households, fundraised about $17m (Shs62b) to assist Ugandans who were significantly affected by the Covid-19 lockdown. 

The organisation, under a similar arrangement, had distributed $100m (Shs365b)  to economically-distressed Americans during the lockdown, and some significant sums to recipients in some other countries where they work, including Kenya and Rwanda.
 
For the case of Uganda, GiveDirectly had identified more than 200,000 households in different urban centres who would benefit from cash donations of Shs100,000 per month for three months. 

The decision to target Ugandans who live in urban areas had been reached following advice from the government that urban dwellers in poor neighbourhoods were most vulnerable during the lockdown. 

But just as the disbursements were kicking off, the government, through the NGO Bureau and with the approval of Cabinet, suspended the project. 

The government said the suspension would be reviewed on a date in January, after the presidential and parliamentary elections.   

One curious reason that the NGO Bureau gave while suspending the release of cash to vulnerable households is that the money would make the recipients lazy and averse to work since they would get used to receiving free money.
 
The government had during the Covid-19 lockdown distributed some food rations to some households that were in dire need, but many more complained of missing out on the supplies.  

The irony
Govt on foreign funding
Whereas the government has toughened against inflows of donor dollars to, especially civil society in the recent months, its own appetite for foreign money has flown through the roof, with some estimates putting the amount of money it has borrowed from the West since March last year to at least $1.7b (Shs6.1 trillion). 

To deal with the effects of Covid-19, for instance, the government acquired $600m about Shs2.2 trillion) from the International Monetary Fund, some $300m (about Shs1.1 trillion) from the World Bank and hundreds more million dollars from other organisations.