The future of the Democratic Governance Facility – a donor funded aid pool – rests on a brief that Finance Minister Matia Kasaija sent President Yoweri Museveni, after the latter questioned how the fund was authorised to be operated exclusively by a foreign mission in Uganda.
In a January 2 letter to the Finance minister, President Museveni directed that the activities of DGF be suspended, saying it was “unacceptable” that the fund was not only “irregularly and unilaterally” set up but was also a foreign mission designed to subvert his government.
“The foreign mission and its co-funders have been given free rein by the Ministry of Finance to choose which activity, entities and amounts to finance without the knowledge or consent of the government. Indeed, a big percentage of these funds have been used to finance activities and organisations designed to subvert the Government under the guise of improving governance,” President Museveni wrote.
“I am therefore directing you to immediately suspend the activities of this fund, until the Cabinet has fully reviewed this matter and a new governance structure in which the elected representatives of the people of Uganda have appropriate oversight, has been put in place and approved by me,” he added.
The European Union and five other countries from the bloc – Austria, Denmark, Ireland, the Netherlands and Sweden – fund the DGF to the tune of Ush500 billion ($135.7 million).
The Fund supports more than 70 mostly civil society organisations but also as a number of state agencies and institutions, all now staring at a potentially bleak future.
“We have sent a brief to the president, whose contents I cannot share,” Mr Kasaija told The EastAfrican.
A source close to the president say he is sensitive to “not very well known” funds bankrolled by Europeans and Americans, setting up shop in Kampala; the source cites a trade facilitation fund which in 2010 approached the Ministry of Trade for endorsement, but President Museveni was uncomfortable with the group, thinking they were spies or agents of money laundering outfits.
The DGF saga comes at a time when the country has emerged from a dirty presidential election, in which foreign governments and key donors such as the US, EU, Canada and the United Kingdom have faulted security agencies which reigned terror on the opposition and their supporters, killing and kidnapping many, during the campaigns.