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Uganda's Story

Charlotte Mwesigye of Uganda Debt Network was Jubilee Scotland's guest in September. She speaks of the challenges her country faces.
For creditors Uganda is the star pupil of HIPC. First to graduate from the programme, it has put savings from debt relief into a Poverty Action Fund with citizens groups involved in deciding where resources are allocated. Charlotte Mwesigye says this has made a real difference, yet so much more needs to be done. "From 2.5 million kids in school we now have 6.5 million" she says, "but teachers' wages have been reduced, teacher numbers are down by 50% and the quality of education is poor." With 111 students per class and one textbook for every 15 children there is "a lack of balance in what is happening." In healthcare too there have been gains but "new health centres can do little if there are no drugs for them to prescribe".

For Charlotte development of Uganda's Poverty Reducation Strategy Paper (a prerequisite for debt relief) was a genuine achievement. Nevertheless civic groups are now calling for its revision. "It was too ambitious and there was not enough time allowed to think it through - one of the side effects has been an increase in borrowing." Not all of the PRSP was respected at the final stage because of the IMF/World Bank veto and privatisations were added in. Yet while "civil society participation may be token for now, it is still an opening that we can build on".

Privatisation is a major concern. In banking it led to an immediate tenfold increase in charges. With electricity the cost per unit of power rose from 32 shillings to 189 shillings. These increases take place with no warning because "corporations want to recover their purchase price immediately". Privatisations impact negatively on employment as "most foreign private investors come with their own workers, pay badly and drive wages down." A major fear is that "corruption around privatisation is creating more debt. $300 million was borrowed to revitalise public services on the assumption that $500m would be got back, yet it is likely to be less. There is no assurance of how much privatisation is contributing to state revenues and the suspicion is that some of the loan is ending up as capital flight."

Charlotte describes a meeting with a senior World Bank official. He criticised the failure of Ugandans to hold their Government accountable, giving the example of President Museveni's purchase of a private jet. "I said to him 'you gave him approval for this after a year's negotiations. You set a condition that it had to be purchased from America at three times what it might have cost'. You cannot have corruption without a corruptor."

Uganda faces immense challenges: unsustainable debts, trade (coffee prices now at a 30 year low), corruption, conflict and grinding poverty. How to move forward on all these fronts? Charlotte says "debt cancellation must come first. It will not solve all our problems, but will create room for reorganisation and is a precondition for sustainability. Ultimately we need to change the trend of borrowing".