Foreign aid, loans are anti-growth- Museveni reiterates on World Bank Money

President Yoweri Museveni has reiterated his previous message over the World Bank's decision to suspend loan funding to Uganda.

Museveni in a Thursday statement said that whereas that foreign aid and loans are welcome, they can be a source of distortion and stunted growth.

“I would like to reiterate that foreign aid and loans are welcome and can be of some use if designed and executed by patriots (not neo-colonial agents), but are neither decisive nor indispensable elements for our desired social-economic transformation,” he said.

Museveni wondered why there is a growing crisis of security and stability in Africa yet foreign aid and loans which have been factored as sources of social, and economic transformation.

“Those loans and aid packages can be a source of distortion and stunted growth as you can see across Africa,” Museveni said, referring to war-torn countries like Guinnea-Conakry, Mali, Burkina-Faso, Niger, Central African Republic, DRC, etc.

“Most of these countries have been getting those grants and loans. Many of the loans and aid packages are either of no value addition to the country or are even antigrowth, all together,” Museveni said.

In the Ministry of Agriculture, Animal Industry and Fisheries, for instance, Museveni said they discovered that a total of US$800million had been borrowed over a period of ten years, but the Ministry did not have zonal diagnostic labs and Research centres, did not repair the 2 mechanization centres and did not buy the mechanization equipment like combine harvesters or even tractors, no irrigation equipment for farmers, no value addition equipment, etc.

“Much of that money was spent on seminars etc yet; those are the basic requirements of that Ministry, if it is to assist in the struggle for social- economic transformation. Therefore, most of the borrowing has been having no value addition to our transformation journey,” he said.

Museveni added that, in some cases, the aid policies are directly against growth. He cited Uganda which has been manufacturing ARVs and other medical drugs at our Quality Chemicals factory in Kampala - Luzira.

“The Aid givers from abroad, for a long time, were not allowing us to use their money to buy the Ugandan manufactured drugs,” he said. Over time, the President has been opposed to uncontrolled foreign borrowings.

On 19th June, 2017, Museveni wrote a directive to the Minister of Finance forbidding the contracting of more loans without his express approval.