Why does uganda need aid

This increase occurs because families tend to have more children to support the family as they get older, and is often an indicator of the amount of foreign aid that is needed. In , according to the World Bank Group , Uganda had a population of 6,, people; between and , the population rose to 41,, In addition, the Human Rights Watch World Report of explains that Uganda faces many issues as far as freedoms for protesters, media officials and several forms of identity including associations people make between themselves and social organizations.

One way foreign aid in Uganda assists people is by allowing them to gain more autonomy over their lives. Better access to healthcare and improved living conditions results in more power and strength of citizens.

In the second phase, starting in the years immediately prior to the seizure of power by Idi Amin in , this prudence was cast aside. Fiscal deficits emerged, financed domestically by monetisation and externally by limited non-concessional borrowing, and persisted, though on a diminishing scale until the overthrow of the dictatorship in The Amin regime caused the contraction of an economy which had previously been in slow expansion, and inflicted serious damage on its export earning capacity and thus on domestic revenues.

Public expenditure declined in real terms and as a share of GDP. The fall of Amin heralded the start of a third phase of nearly a decade of acute economic as well as political instability, featuring an episode in the mids of hyperinflation.

This followed the collapse of domestic revenue mobilisation after the overthrow of Amin, the demonetisation of the economy, a steep, post, rise in public expenditure and the printing of money by successive governments.

The economic decline persisted until the later s, with a temporary remission under the Obote II regime , which, encouraged by agreements with the IMF and the Paris Club and significant commitments of aid, engaged in an imprudent expansion of public expenditure, but achieved no lasting development benefit. The incoming Museveni regime in inherited a weakening revenue base and an economy deserted by donors. Its first task was to stabilise the economy by reducing expenditure.

The fourth and final phase began with the implementation of the Museveni government's Economic Recovery Programme in the late s. This consisted of commitment to the initial steps in what was to become a comprehensive structural adjustment and liberalisation of the economy, and of an ambitious programme of infrastructural rehabilitation.

It attracted donor support - in programme and project form - on a scale from which Uganda had never previously benefited. The paper notes a number of reforms in the s in public expenditure planning and management which have enhanced the effectiveness of public expenditure and set the real economy on a path of recovery and sustained expansion.

In the long term, aid can be shown to have a stable relationship with tax revenues, government expenditure and borrowing. This appears to be unaffected by the changes that took place at the end of the turbulence that plagued Uganda during the s.

Over the last thirty years, the Ugandan government seems to have incorporated aid into its fiscal planning; ostensibly planning to fund its expenditure via tax revenue, aid and domestic borrowing, in that order. The Ugandan case does not seem to lend credence to this. On the contrary, aid appears to have increased efforts at tax collection. Often, this is due to the conditions attached by aid donors that require efforts to be conducted to ensure the sustainability of tax revenues.

Furthermore, aid appears to decrease costly longer-term borrowing. Shocks to aid, spending and government borrowing seem to have permanent effects on the long-term fiscal system of Uganda, causing disruptions with each other that persist over subsequent periods.

However, shocks to tax revenue are transitive and stable without permanent effects. This is consistent with the fact that Uganda does not follow a balanced budget path. Of those for whom data does exist, eight donors, including the Global Fund, drove the increase in multilateral donor aid disbursements to Uganda in Figure 5.

This consisted mostly of disbursement increases by the Global Fund. Through the analysis of real-time data published to IATI, this paper has highlighted several trends emerging in , including aid disbursements, scale, types of aid flows and sector priorities. Overall conclusions from the analysis are as follows.

The following recommendations could help Uganda to address the debt challenges associated with increasing loans and declining grant disbursements.

Uganda Revenue Authority URA reports its revenue data in terms of net revenue target, actual and variance. Net revenue is what was collected less tax refunds. Inter-agency Task Force on Financing for Development, Financing for Sustainable Development Report. Development Initiatives, Investments to End Poverty, Chapter 2. Available at: www.

See the methodology annex for further information. In this webinar a range of speakers discuss the role of data in targeting social safety nets in Uganda, an issue that is coming strongly to the fore with the impacts of Covid on Uganda's poorest communities. This briefing tracks domestic revenue and spending to key pro-poor sectors in Uganda before and during the Covid pandemic. How will the Covid pandemic affect people living in poverty in Uganda? This report looks at the Ugandan government's response measures in health, food, and water, sanitation and hygiene.

Jump to section. Publication sections. Author Moses Owori.