Already, hundreds of jobs have been drastically cut, and so has funding for many non-governmental organizations. It’s all doom and gloom for about 80 beneficiary organizations working in the areas of democracy, human rights, and extractive industries, among others.
The exit has been protracted, brought on by a ruling NRM government unsettled by the facility’s deep pockets. As the clock ticked toward the February 20, 2021 general elections, President Yoweri Museveni directed the minister of Finance, Matia Kasaija, to suspend all DGF activities. He accused the facility of financing subversive activities in Uganda.
In a letter to Kasaija, the president said the ministry of Finance had irregularly and unilaterally authorized a £100 million fund, known as the DGF, to be operated exclusively by a foreign mission in Uganda. Unlike prior grant arrangements such as the Democratic Governance and Accountability project, in which the government held sway, it has no say or oversight on how the DGF is administered in Uganda.
“The foreign mission and its co-founders have been given free rein by the Ministry of Finance to choose which activities, entities, and amounts to finance without the knowledge or consent of the government.” A large percentage of these funds have been used to finance activities and organizations designed to subvert the government under the guise of improving governance, “ Museveni said.
After 17 months under lock and key, the president lifted the DGF suspension in July 2022. The lifting of the suspension followed a meeting between President Museveni and the Danish minister for Development Cooperation, Flemming Mller Mortensen, which was held on June 22, 2022.
Established in 2011, DGF is a coalition of seven development partners, including Austria, Denmark, the European Union (EU), Ireland, the Netherlands, Norway, and Sweden. DGF is currently in its second program, running from January 2018 to December 2022.
The facility will cease funding implementing partners in December this year. DGF has been funding 80 state and non-state implementing partners in the country. DGF’s planned exit has already impacted several individuals, communities, and institutions. Under the four-year programme, DGF has pumped $350 million (Shs 1.3 trillion) into Uganda’s economy.
The notable beneficiaries include: The National Bureau for NGOs (NGO Bureau), the Institute of Parliamentary Studies (IPS), the Parliament of Uganda, the Ministry of Lands, Housing and Urban Development, Nebbi District Local Government, the Uganda Law Council, Uganda Law Society and Uganda Human Rights Commission.
Others are: Human Rights Network for Journalists-Uganda (HRNJ-U), Civil Society Budget Advocacy Group (CSBAG), Akina Mama wa Afrika (AMwA), African Youth Initiative Network (AYINET), Anti-Corruption Coalition Uganda (ACCU), African Centre for Media Excellence (ACME), Food Rights Alliance (FRA), ActionAid International Uganda (AAIU) and others.
According to a source who declined to be named, they had a partner’s conference with DGF on October 18, 2022. The meeting was attended by the ambassadors of Denmark and the Netherlands.
“They told us that they realized that the project was meeting the needs of Ugandans and that the needs are still there. The needs include democracy, human rights, extractive industries and other areas. They told us that they were going to sit and reflect because there were seven embassies that were contributing to DGF. “Between now and December 2022, DGF will be closing implementation,” he said.
ALL STAFF LAID OFF
The source said between December and June 2023, the donors will conduct a program impact evaluation for the country. After that, they will decide whether to come up with a successor program or not.
“They were not committal. They stated that they would reflect and see what the future held. All staff that had full payment (salary) under this program were laid off effective October 1, 2022. The Uganda Revenue Authority (URA) will be affected because one civil society organization, CSBAG, computed and found that since 2018 with DGF funding, they have paid tax of about Shs 600 million and that is one organization,” the source said.
Agnes Kirabo, the country director of Food Rights Alliance, an organization that has been benefiting from the facility since 2020, said DGF was the only facility that was growing both big and small organizations. The organizations got to own assets they never dreamt of owning. As long as you qualified to be a grantee, whether in Kapchorwa or Nebbi, you had to get a vehicle, and no donor was offering that. “We are stuck in the gap. This is our country, and we have to live here,” she said.
“DGF started funding us in 2019. Other organizations started with DGF one; so, we were hoping to benefit from DGF three. It facilitated 70% of our human resources. If you have a partner doing that, then you are sure that the organization will do the work. It was funding 100% of the human resources of other organizations. It gave out billions of dollars for organizations to acquire assets, and this depended on outreach and longevity,” she said.
“Someone confessed to us that since DGF came on board, they have been paying Shs 300 million as Pay As You Earn and that company is not among the big ones. “There was a lot of money in the economy,” she said.
The beauty of the facility was that it promoted the circulation of money in the economy because they had partners across the country. By principle, the organizations were supposed to spend money in the areas where they were implementing their projects.
When implemented in Mubende (central Uganda), you have to buy food, refreshments, and other items from the local service providers. That implies the locals benefited from the facility. That little money might be underrated, but there are a lot of Ugandans who go a month without selling and earning Shs 10,000. The facility was extremely beneficial to the local community.
Circulating money in the economy means that the purchasing power will go up. The companies will be able to file high tax returns. “This was not about us; it was about that picture of the money in the economy,” she said.
“We are not laying off workers, but they are laying themselves off. You may want to keep them, but they will leave because they have families to look after. When Museveni lifted the ban on DGF, I received calls from a number of people I never expected to be beneficiaries of the facility. It is a hard time for us, but I pray that we find a facility in Uganda that will bridge the gap,” she said.
Benard Oundo, the president of the Uganda Law Society (ULS), said they have been forced to look for alternative funding to bridge the gap created by the facility’s exit.
“DGF has been funding 100% of free legal aid and probono budget for individuals who can’t afford legal fees. Many people have benefited from the programme, but I don’t know how many will languish in jails over lack of legal fees,” he said.
Oundo urged the government to prioritize the Legal Aid Bill. The passing and signing of the bill will mean that the government participates in providing free legal services, he said. Unlike other organizations, Oundo said, ULS will not lay off employees who have been working under the facility because they have secured them a temporary budget and, by December, they will have gotten a lasting solution.
Dr George Lugalambi, the executive director of the African Center for Media Excellence (ACME), said they are looking for alternative funders on top of engaging the media industry to bridge that significant funding gap created by DGF’s exit.
“We didn’t know nor see this coming. We had never seen programs end during the implementation cycle. It disrupted a lot of our programmes, which included training journalists and others. It is a big loss to the country, the media industry, and other communities where the programs were implemented. We are doing a strategic plan to see that we recover from this shock. I hope we shall raise new funding to continue supporting our programmes and others we are planning to bring on board,” he said.
WE WILL ADJUST
He said DGF was the biggest funder of the ACME budget. He, however, declined to reveal the actual sum of money ACME got. ACME trains journalists and funds various investigative projects pitched by various journalists.
“We will adjust. This is like a business; when the market changes, you adjust accordingly. It can’t be business as usual when you have such a funding gap to continue operating. We are still reviewing the situation because we have up to this quarter. “If we fail to get alternative funding, we shall lay off a number of workers,” he said.
Marlon Agaba, the spokesman of the Anti-Corruption Coalition Uganda, said no organization can bridge the void created by DFG.
“DGF was the biggest donor in Uganda and, as of now, there is no replacement. Staff will be laid off or made redundant because we can’t pay them. The service providers we have been supporting in terms of hotels, media houses, transport agencies, printing and others, we shall not support them anymore. This means ceasing 75% of our operations. The impact on us is quite huge,” he said.
“DGF has been funding 75% of our budget and they have been funding us since 2011. On average, DGF has been giving Shs 1 billion every year. So far, we have laid off 11 staff because they have been supported by the facility,” he said.
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