UK cuts direct budget aid to Uganda by £15 million, withholds further £5 million

Report
from Department for International Development
Published on 20 Dec 2005
The UK is to reduce budget support to Uganda by £15 million and use the money to provide humanitarian relief in northern Uganda, Hilary Benn, Secretary of State for International Development, told the House of Commons today.

In addition, a further £5 million will be held back until after the elections in February, when a decision will be made on whether to disburse it.

The immediate effect is to reduce budget support by £20 million from a planned £50 million. The decision comes after an economic and governance assessment raised concerns over:

The government's commitment to the independence of the judiciary, freedom of the press and freedom of association following the events surrounding the arrest and trial of the leader of the Forum for Democratic Change, Kizza Besigye;

Delays in the government's own road map for the political transition;

The continuation of state financing for the ruling party in a new era of multi-party politics; and

A significant overrun on public administration expenditure.

The cut of £15 million will be reallocated to help the United Nations provide humanitarian relief, including food and health care, for people who have had to leave their homes as a result of the conflict in northern Uganda. The latest information suggests over 1.5 million now live in camps.

Hilary Benn said:

"I am concerned by recent developments in Uganda, and I have decided to cut £15 million from our planned budget support this year, and postpone a decision on whether to provide a further £5 million until after the elections."

"All of the UK's aid partnerships are based on a shared commitment to reducing poverty, tackling corruption, and respecting human rights. The strength of our future partnership with Uganda will depend upon a shared commitment to these principles. "

"The situation for many people forced from their homes by the conflict in northern Uganda is desperate. That's why I am reallocating £15 million to help the UN provide food and access to health care to those affected."

Additional Information

1. The UK and Uganda signed a Poverty Reduction Budget Support (PRBS) arrangement in December 2004 for a grant of up to £145 million over three years. This budget support arrangement is linked to reforms detailed in the Poverty Eradication Action Plan, including macro-economic management and governance.

2. The UK indicated at the time the agreement was signed, that up to £40 million was available in financial year 2004/05, £50 million in 2005/06 and £55 million in 2006/07. The UK disbursed £35 million in 2004/05, having cut £5 million due to concerns about the progress of Uganda's political transition leading up to multi-party elections in 2006.

3. The total development assistance to Uganda this financial year is £71.6 million. The original indication was that PRBS would form £50 million of this assistance. In view of Uganda's overall progress, the UK government has decided to disburse £30 million of PRBS this year, with £15 million to be reallocated to humanitarian assistance in northern Uganda and £5 million to be held back for a decision on the disbursement until after the elections in February. The remaining £21.6 million supports:

  • improved governance and the capacity of the government to implement its budget effectively;

  • service provision in the key areas of health, HIV/AIDS and water and sanitation;

  • civil society and the private sector, and their contribution to poverty reduction; and

  • conflict resolution and other humanitarian assistance in northern Uganda.
4. The UK's aid partnership with Uganda is based on a shared commitment to: the reduction of poverty; respecting human rights and other international obligations; and strengthening financial management and accountability and reducing the risk that funds are misused through weak administration or corruption.

5. Other donors are withholding similar proportions of their programmes. Norway and Ireland have already reduced their budget support commitments earlier in the year by approximately £2 million. The Dutch cut nearly £5 million of their budget support in November. Sweden has recently announced a budget support cut of nearly £2 million and is withholding a further £5 million.