The World Bank has suspended budget support to Uganda citing the government’s financial indiscipline as seen in numerous scandals, especially in the Office of the Prime Minister.
The donor community said it is completely pulling out of budget support.
Donors had in March sounded unconvinced, doubting the extent of reforms on the “High level government financial management reform action plan matrix,” requesting the country’s finance Minister to provide more depth on the detail of reform executed since the numerous Aid scandals.
The World Bank is the largest multilateral lender extending almost half of the entire budget support funding given to Uganda by donors, which is close to 30%.
However, analysts say the pulling out by World Bank presents new opportunities for the Uganda if well utilized.
“Yes when you give budget support you also have a say in policy, so the World Bank will lose that,” said an analyst who now advises that the country can focus on what it considers relevant to its growth and not following the path of outsiders who have little knowledge of the country’s priorities.
“It is good news. The donor community have been telling the Government to find other ways of funding but it seems they were relaxed because they were always sure of the 30% funding,” said the analyst.
However, analysts also warn that little will be achieved if the leaking holes that swallow government resources through corruption are not plugged.
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