Denmark Happy With Country, but Worried

from All Africa

New Vision (Kampala)

NEWS

By Felix Osike
Kampala

The Danish contribution to Uganda's development has been described as of high quality and invaluable, according to the latest evaluation report.

The report submitted to the Danish ministry of foreign affairs covers the period 1987 to 2005, during which the Danes injected more than five billion Danish Kroner (about $1b) into Uganda.

"Our assessment is that Danish aid has been of high quality, and that Denmark's contribution to Uganda's progress is rightly valued," says the report, adding that the Danish programme was consistently relevant in providing grants, not loans.

Danish bilateral development assistance resumed in 1987 after the NRM took over power.

The 2006 evaluation by UK-based Mokoro Ltd covered all Danish International Development Agency (Danida) programmes. It shows that Uganda's political and economic development over the past two decades is impressive.

"Without the aid that it received, Uganda's economic growth would certainly have been slower, its political stability might also have been threatened, and more people would have been left in poverty," the report states.

It adds that although there are legitimate concerns about Uganda's aid dependency, aid has not been able to "buy" governance for Uganda. It points out that Uganda had proved exceptionally difficult to hold together as both Idi Amin's dictatorship and the Obote II era which followed, were marked by brutality and strife.

The NRM's approach to devolve power (decentralisation) and poverty reduction programmes, the report adds, prefigured concepts of good development practice that emerged during the 1990s and won wide donor support.

"Only a very unambitious aid programme could be without blemish, and it is notable that the Danish aid programme has not sought easy options: it has chosen some difficult sectors and components like agriculture and governance. It has sought to work in the more deprived and a difficult environment of Uganda, and it has sought to innovate."

The report found out that the Danish government's concerns about accountability and the need for distinct visibility of its aid had made Denmark overly cautious about disbursing aid through government systems.

The NRM regime is credited for a much better human rights record than its predecessors, although the LRA conflict ruined the north.

It notes that the relationship between President Yoweri Museveni and the donors deteriorated over concerns on governance, corruption and democratic transition.

The report cites corruption as a serious problem for Uganda throughout the period under review, taking a number of forms ranging from "petty corruption" - which may be the form most often directly encountered by the poor - to "grand corruption", involving the looting of public resources by the politically powerful.

Although there is no doubt about the pervasiveness of corruption in Uganda, the report states it is inherently more difficult to be certain of trends, since most statistics on corruption are based on perceptions.

The need to finance political activity may spur corruption at local government level, it notes, adding that the current incentives for corruption are too high and law enforcement too weak for substantial improvement to occur.

Transparency International's perception surveys indicate some recent improvements though.

The report calls for strong political will and adequate financing of anti-corruption agencies.

As noted in the report, Danish aid policy takes a strong line on accountability and corruption. To control corruption relating to Danish aid, Danida has a "zero tolerance" policy in relation to all persons, companies or partner institutions that manage their funds.

The report notes that there have been "crisis" episodes in various DANIDA projects notably in Rakai District and the National Medical Stores, where rampant corruption was discovered.

The Danes have been comforted by the response of the Government to reprimand the corrupt.

Carsten Nilaus Pedersen, the Head of Bilateral Development Co-operation in the Danish foreign affairs ministry, said the Ugandan government must follow up corruption cases and punish the culprits if the country is to gain the confidence of the donors.

Danish ambassador Stig Barlyng said because of strict accountability requirements, there is common talk in government circles that "Don't touch the Danish money".

Barlyng also said with peace returning to northern Uganda, the Government should focus on good governance, human rights and fighting corruption.

"Corruption simply has to stop. We demand that every penny which has been misused is paid back. We would like to see more vigilance on the part of the Government."

He was worried that half of the country's national budget was not being spent properly. "If the other half was spent properly, there would be quality in public service delivery," he added.

Some policy analysts regard Danida's approach to corruption and accountability as good because it is helpful in building up the culture and processes of accountability.

"Because of emphasis on accountability, the oldest vehicle in a district is one provided under a Danida-funded education project. If this becomes a culture, it will be very useful," observed the analyst.

However, other analysts believe that Danida's zero tolerance stance is not the most productive strategy.

A government official perceived that "Danida's weak spot is that it has been too concerned with corruption" and unrealistic in its expectations.

It is perceived that because of this preoccupation with corruption, Danida over protects its funds and, as a result, is often less efficient than it perceives itself to be.

"People say: 'You have to be very careful when you're working with the Danes.' If someone steals, it's not enough to the Danes for him to pay it back; they expect him to be taken to court," noted one of the people interviewed by the evaluators.

The report explains that the change in composition of the Danish coalition government after the 2001 election led to a reduction in aid to Uganda, a signal of discontent with Uganda's involvement in the DR Congo."

There have been significant flows of resources via Danish NGOs like MS Uganda funded from Copenhagen.

The report credits Danida's support to the health sector, debt relief, rural roads and agricultural development, justice, rural water, sanitation, economic and institutional recovery in Rakai District and democratisation.

"The Ugandan model of decentralisation is very much a 'home-grown' initiative," the report states, adding that although Museveni's strategy was to try to give all Ugandans a political and economic stake, his government had not been successful in redressing the political grievances of the north or the marginalisation of the pastoral north-east.

It said human rights concerns arose out of the government's failure to adequately address rights violations from the conflict in the north and unlevel playing field for the opposition.

It, however, says Uganda has stood out as a rare strong performer during a period when the economic performance of most African countries was dismal.

Notable were a series of policies to liberalise the economy including the abolition of foreign exchange controls, freeing up of commodity markets, and reduction of trade barriers.

A comparison is made between Uganda, Tanzania and Vietnam, as the three countries began their reform process at around the same time.

The economic performance of Uganda and Tanzania is essentially similar as both countries stabilised their macro-economic environments, liberalised trade regimes and achieved reasonable rates of growth.

Both countries have had large and persistent dependence on aid to finance the budget and the large gap in the trade account.

Neither Uganda nor Tanzania has had significant growth in manufacturing and developing industrial exports but a lively development of the service sector and investment in buildings.

In contrast, Vietnam has achieved a quite dramatic and sustained increase in exports, on a highly diversified base (mining, agriculture and fisheries and manufactured exports), which has underpinned a much more vigorous growth performance, resulting in an exemplary reduction in poverty.

Areas where Danish aid was conspicuously effective, included debt relief, the rural roads programme, support to the rehabilitation and expansion of basic health services, rural water and sanitation programmes, support to special education, gender and decentralisation has been achieved.

Despite the generally positive assessment, not every element of DANIDA programmes passed the relevance test. Two early major projects - the grain silos in Jinja and Kawempe and the Kampala dairy rehabilitation - were not relevant to Ugandan needs, according to the report.