Uganda has been heavily dependent on foreign aid for decades. However, in recent years, it has faced a series of challenges that have threatened its development prospects. The most recent one is the enactment of a new anti-LGBTQ law that has sparked outrage and condemnation from the international community. The law has also led to the suspension of new loans from the World Bank, one of Uganda’s major donors. How can Uganda cope with this dilemma and achieve sustainable development without donor aid?
The new anti-LGBTQ law, which was passed in March 2023, criminalizes identifying as LGBTQ (Lesbian, gay, bisexual, transgender, queer, or questioning) and compels citizens to report those who do so to the authorities. It extends an existing ban on gay sex, further banning “promoting” homosexuality, and prescribes the death penalty for certain crimes that involve same-sex activity. The law has been widely condemned by human rights groups, civil society organizations, and foreign governments as a violation of universal human rights and a threat to public health.
The World Bank announced that it would halt new loans to Uganda over the country’s anti-LGBTQ law. It also said that it would pause project financing pending a review of measures it introduced to protect sexual and gender minorities from discrimination and exclusion in its projects. The World Bank said it remained committed to helping Uganda despite its pause on financing, but warned that the law undermines its efforts to eradicate poverty and promote inclusion.
The withdrawal of donor aid from Uganda can have serious implications for the country’s development prospects. Aid has been a vital source of financing for various sectors and projects, such as health, education, infrastructure, agriculture, and governance. According to the World Bank, Uganda received $1.6 billion in official development assistance in 2020, which accounted for about 5% of its gross national income. Without adequate aid, Uganda faces the risk of falling behind on its social and economic goals, such as reducing poverty, improving health outcomes, enhancing food security, and strengthening democracy.
However, the withdrawal of donor aid also presents an opportunity for Uganda to rethink its development strategy and become more self-reliant. Uganda has a young and growing population, rich natural resources, and a vibrant private sector that can drive economic growth and innovation. Uganda can also leverage its regional and continental partnerships to access new markets and opportunities.
Some of the possible ways that Uganda can cope with the aid withdrawal and achieve sustainable development are:
- Diversifying its sources of financing: Uganda can explore alternative sources of funding for its development needs, such as domestic revenue mobilization, private sector investment, and remittances from its diaspora. Uganda has made some progress in increasing its tax revenue collection in recent years, but it still has room for improvement by broadening its tax base, reducing tax evasion, and enhancing efficiency. Uganda can also attract more private sector investment by improving its business environment, reducing bureaucracy and corruption, and providing incentives and support for entrepreneurs. Moreover, Uganda can tap into the potential of its diaspora, which is estimated to be over 1.5 million people, by facilitating their remittance flows, engaging them in development initiatives, and encouraging their return on investment.
- Improving its governance and accountability: Uganda can also restore its credibility and trust with its donors and citizens by improving its governance and accountability systems. This includes fighting corruption, promoting transparency and participation, and delivering quality public services. Uganda ranks 142 out of 180 countries in the Corruption Perceptions Index 2022, indicating a high level of perceived corruption in the public sector. Corruption undermines development by diverting resources from public goods and services, eroding public confidence, and discouraging investment. Uganda can combat corruption by strengthening its anti-corruption institutions, enforcing laws and sanctions, empowering civil society watchdogs, and educating the public about their rights and responsibilities. Uganda can also promote transparency and participation by ensuring free and fair elections, protecting media freedom, providing access to information, and involving citizens in decision-making processes. Uganda can deliver quality public services by allocating resources efficiently and equitably, monitoring performance and outcomes, ensuring accountability and feedback mechanisms, and fostering innovation and learning.
- Investing in its human capital: Furthermore, Uganda can invest in its human capital by improving its health and education systems. This will enable it to harness the potential of its young and productive population and create a skilled and healthy workforce. Uganda has a population of about 48 million people, of which more than half are under 18 years old. This presents a demographic dividend opportunity if Uganda can provide them with adequate health care, education, training, employment, and empowerment opportunities. Uganda can improve its health system by increasing its health spending, which is only 6.3% of its GDP, expanding its health coverage and access, improving its health infrastructure and workforce, and addressing the major health challenges such as HIV/AIDS, malaria, maternal and child mortality, and malnutrition. Uganda can improve its education system by increasing its education spending, which is only 2.6% of its GDP, enhancing its education quality and relevance, reducing its dropout and repetition rates, and promoting lifelong learning and skills development.
The withdrawal of donor aid from Uganda is a dilemma that poses both risks and opportunities for the country. Uganda can either succumb to the challenges or rise to the occasion. The choice is up to us and our leaders. We can either depend on others for our development or take charge of our own destiny. The time to act is now. Let us make the right choice for ourselves and our future generations.
By Naturiinda Jonnah
