Uganda to Refund Stolen Donor Aid, Wants Funding Freeze Lifted

Uganda for the first time is refunding money to donor countries, handing back 38.3 billion shillings ($14.2 million) stolen by government officials, Keith Muhakazi, the deputy secretary to the Treasury, said.

The East African nation has allocated the cash to repay donors including the World Bank, the U.K., Ireland, Sweden, Denmark and Norway, which froze about $263 million in budget support because of the theft, he said.

“We have asked these countries to provide account details for depositing these funds,” Muhakanizi told reporters today in Kampala, the capital. Ireland has already been repaid 4 million euros ($5.4 million) and will use the money for its intended programs without channeling it through the government, he said.

Uganda, Africa’s biggest coffee exporter, is hopeful donors, who finance a quarter of the country’s annual budget, will resume aid this year because of improved public financial management, Muhakanizi said. The aid freeze was partially responsible for the government on Dec. 4 lowering its economic growth forecast to 4%-4.5% from 5% earlier. In the six months through December, the nation spent according to its budget, he said.