Govt moves to control donor funds, projects

The government has launched another broadside against development partners, instructing that money be channelled through the Treasury instead of going directly to projects. 

Mr Jim Mugunga, the spokesperson of the Ministry of Finance, Planning and Economic Development, yesterday said the move is not targeting any development partner, but aimed at ensuring that there is no duplication of services.

“If this is done, it will also have the dual impact of helping the development partners to ensure that they follow their money and ask questions,” Mr Mugunga said.

Mr Matia Kasaija, the Finance minister, in a September 6 letter said all donor programmes will be signed off by his ministry. 
He added that donors are supposed to prepare country strategies jointly, and that all programmes and projects will be jointly implemented with the relevant government ministries, departments and agencies (MDAs).

Mr Kasaija said the decision intends to streamline the operations of development assistance. 

It also sets out to ensure that the people of Uganda obtain maximum benefits from the assistance the country gets from non-state actors.

For some time, donors have been critical of the government’s corruption record and in some instances created basket funds to implement activities they fund. 

Mr Kasaija now wants all development partners to jointly prepare country strategy papers (CSPs) with the government to ensure that the proposed support is in line with Uganda’s aspirations as enshrined in Vision 2040 and the National Development Plan III.

“These strategy papers should be prepared in consultation with all stakeholders, including the private sector and relevant civil society organisations. The CSPs should also be signed off by the minister responsible for Finance in line with Uganda’s Laws and in the spirit of ownership,” he said.

Mr Kasaija also said all projects and programmes funded by development partners should be signed off by the Finance minister in line with the laws of Uganda to ensure that there is no duplication of efforts.

“In addition to the above, all projects and programmes shall be implemented together with and in consultation with the relevant MDA to ensure sustainability of the investments carried out. 

The respective MDAs shall be consulted while preparing the project or programme. The above guidance applies to all programmes to be implemented by civil society organisations and the private sector in line with the agreed on Paris Principles of aid effectiveness,” he said.

According to the minister, the agreements signed will include, among others, obligations of all parties, the accounting, reporting and monitoring arrangements, and the specific government ministry, department or agency that shall be responsible for overall supervision of the project or programme.

Mr Kasaija said all projects and programmes implemented by development partners will require prior approval of Cabinet before signature by the Minister of Finance and implementation. “Development partners are, therefore, encouraged to submit these projects and programmes to the Minister of Finance well in advance to enable timely internal clearances.

Prior consultation with the respective MDAs and sectors is advised to ensure adequate internal discussions during cabinet deliberations,” he said.

Treasury single account
The new directive states that all development assistance shall be reported and appropriated by Parliament, including those whose accounts will be managed off the Treasury single account. 

Mr Kasaija said special arrangement has been provided for reporting under the programme based budgeting system to cater to the scenario above. 

This, according to him, implies that all projects and programmes financed by development partners shall be reported to the government for budgeting purposes.He said the Ministry of Finance with support of development partners has over the years developed the aid management platform to ensure that all development assistance is reported on by development partners and the government. 

He also said the platform must be used to enable the government to have a comprehensive view of all development cooperation efforts.

“The government will further provide a detailed development cooperation policy after consultation with [the] Cabinet. The above principles apply to all overseas development assistance, including off budget support operations,” Mr Kasaija said.

The move comes after the suspension of Democratic Governance Facility last year.

The simmering tensions with civil society organisations came to a head in August when 54 NGOs were suspended with many of them accusing the National NGO Bureau of a witch-hunt.

Xavier Ejoyi, the Action Aid Country Executive Director:  

“First, it’s an ambitious attempt to control development assistance, and ultimately stifle funding to NGOs and civil society. Considering the recent trends in closing of civic space, it’s not surprising, but one wonders to what end. Ordinarily, one would imagine the letter is government’s quest for mutual accountability on aid effectiveness.  However, the timing and the tone of the letter is a departure from the spirit of mutual accountability in the Paris Declaration on aid effectiveness as well as the Busan partnership on aid effectiveness.  In citing Paris, I am sure the minister needs no reminder that these guidelines, under the ownership principle, Uganda agrees to improve its institutions and tackle corruption.”