East Africa

Denmark warns of aid cut over OPM scandal

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The Danish Government has warned it may cut development assistance to Uganda if urgent measures are not taken to block the theft of public resources.

Visiting Development Cooperation Minister Christian Bach said in an interview on Friday that the fraud in the Office of the Prime Minister (OPM) was a clear signal that “this is not the right country to invest in”.

He added: “Uganda is simply signalling that some African governments cannot handle money entrusted to them, and this [is] going to make it difficult for us [as] ministers in Europe to move forward with budget support. I believe it will make it difficult for the State to deliver services to its people.”

A forensic audit by Auditor General John Muwanga revealed that more than Shs60 billion was misappropriated, but donors speak of only $13 million (Shs33.8b) – an unexplained disparity.
The Danish minister was in Uganda to appraise projects financed by his government and hold discussions with government officials, including Prime Minister Amama Mbabazi, about what he called “the serious” ramifications of the OPM fraud on the country’s ties with donors.

The OPM oversees and coordinates ministries’ activities, but has been found wanting in the implementation of the northern Uganda war and poverty recovery programmes. It, for instance, lacked the requisite manpower, resulting in officials with unrelated qualifications certifying inferior engineering works.
Such an ad hoc arrangement, experts believe, enabled bureaucrats to steal billions.

Mr Henrik Larsen, the deputy head of mission at the Danish Embassy in Kampala, said $2 million (Shs5.2b) out of the misappropriated $13 million (Shs33.8 billion) was aid from his government.

Some donors swiftly froze aid, compelling the government to repay three of them, excluding Denmark.
OPM Principal Accountant Geoffrey Kazinda, his middle-level colleagues and their alleged accomplices in the Finance ministry and the central bank were either interdicted or arrested. But Permanent Secretary Pius Bigirimana, who is the accounting officer, remains in office. Some of his bosses say he blew the whistle on the cash bonanza, but there has been no explanation as to why he never prevented it in the first place.

During the Friday interview (See full interview on page 25) with the Daily Monitor, Minister Bach said: “We have said clearly that all those involved must be held accountable. And I have a strong expectation that not until this is handled, we are not going to resume our partnership and our support to Uganda.”
Donors have suspended about $300 million (Shs779 billion) in aid to Uganda over the OPM scam.


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