Friday, February 7, 2025

USAID: TIME FOR A HARD RESET

So USAID may be closing office soon. A big blow to our health sector for one. USAID is key in provision of antiretrovirals, anti-malaria fight and everytime we have a haemorragic fever outbreak or the other.

With a health budget of sh3trillion or about sh65,000 per Ugandan, the argument for help with our health budget is not difficult to make.

It would make sense that if USAID was suspended we would have to rearrange the rest of our budget to fill in the gaps that have ensued. We would have to take a long hard look at  our health priorities and arrange expenditure to reflect this.

We would have to ask ourselves some hard questions. Do we need such a big government or not? Can we cut back on our travel budgets with their attendant per diems and readopt virtual meetings? Do we need to stop the lip service and go after the corrupt without fear or favour?

We would want to look again at our taxes. Do we need to raise them? Or at least put more effort into roping more people into the tax net? Collecting less than 20 percent of GDP is nothing to write home about.

"Interestingly this situation we find ourselves in, has a lot to do with the donor largesse we have enjoyed over the last four decades...

The progression of development went roughly as follows. 

When the monarchs of Europe wanted more money to fund their lavish lifestyles and fight more wars, they looked to tax the people more. At some point the people said enough, we need to have more say in the way our taxes are spent. Under pressure the monarchs allowed for the creation of parliaments to, among other things, make sure their monies were being spent for the benefit of the tax payers. Monarchs who resisted, had their and their families´ heads lopped off.

They did not have the benefit of foreign aid, maybe when they went out and colonized countries and appropriated their resources for themselves. But for the most part they had to rely on their own resources to develop.

What this meant was taxing their populations. But you couldn’t just tax your populations any howly. There had to be a negotiation -- If we pay you more we expect more. And if you don’t leave up to our contract we kick you out at the next polls.

And that is how democracy evolved as a continuous dialogue and negotiation between the power elite and the citizen.

Unfortunately for us, this process was short circuited by first colonialism and then by aid.

Now our governments, when their budgets fall short, the knee jerk reaction is to fly abroad to beg for alms. It is much easier than negotiating with your people for more taxes...

As a result not only has the evolution of democracy been stalled but we are also very corrupt. After all it’s not our money we are stealing and as long as the government pays it back, who cares. Imagine though if more people paid taxes, than the less than two million who currently do, there would more noise about corruption.

So by bailing out our governments the aid industry encourages corruption, frustrates the development of institutions and then it is no wonder that after billions of dollars have been thrown at the continent over the last seven decades, we have little to show for it.

But one can see how this state of affairs is unlikely to reverse soon. 

"The US needs the influence that comes with USAID’s activities. The recipient governments need more and more aid to forestall the hard discussions they will inevitably have to have with their populations. A vicious cycle that cannot be broken without much discomfort and pain...

This USAID situation should serve as time for intense soul searching, leading to a hard reset.

 

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