Norway and four other donor countries have suspended all aid to the Ugandan state following revelations of a major corruption scandal involving the misuse of some EUR 11.6 million (approximately NOK 85 million). The funds were intended to support stabilisation and development efforts in northern Uganda, but instead were transferred to a number of bank accounts, including one linked to the Office of the Prime Minister in Uganda and used for purposes other than intended. Norwegian aid funds worth some NOK 27 million have been found to have been embezzled.
“The EU, the World Bank, the UK and a number of other donor countries are now withholding a total of USD 285 million (approximately NOK 1.6 billion) in aid to Uganda. This is an embarrassment for the Ugandan Government and unfortunately it is the country’s poor that will be affected. But we cannot provide any more funding if it is simply being pocketed by corrupt officials,” Mr Gadgil stressed.
“I expressed my disappointment to Minister Kiwanuka at what the Ugandan authorities have done so far to clear up this scandal. Norway and the other donors have three demands: that the stolen funds are repaid in full, those responsible are duly prosecuted and that new, reliable systems for managing aid in the future are put in place. I expect Minister Kiwanuka to do everything in her power to restore our trust in Uganda in the time ahead,” said Mr Gadgil.
“At the same time I have noted that it was Uganda’s own supreme audit institution that revealed the scandal, which is receiving a lot of attention in the Ugandan press. The Office of the Auditor General of Norway co-operates with and supports the Office of the Auditor General of Uganda. We are now seeing the positive results of this cooperation,” Mr Gadgil added.
Funding provided by Norway for the reconstruction of northern Uganda was ceased in 2011 due to allegations of corruption, and general budget support provided by Norway to Uganda was halted in 2010. We believe that we have better control and achieve better results through projects where Norway has special know-how, like energy and gender.
Uganda is set to start oil production. Minister Kiwanuka and her delegation are in Norway to gain insight into how future oil and gas revenues can be managed in such a way that they benefit the whole population. Norway has for many years cooperated with the Ugandan authorities in the petroleum sector through the Oil for Development programme.