Chapter 7. Danish Uganda Aid Programme (Overview)

Introduction

7.1 This chapter reviews the level and the composition of Danish bilateral aid to Uganda. In both dimensions it reviews the relative importance of Danish aid. It also notes the significance of Uganda within Denmark’s total aid portfolio.

Danish Aid Aggregates and Trends

Total bilateral aid

7.2 Denmark was one of the first bilaterals to re-establish an official aid programme in Uganda, and it quickly grew to become one of Denmark’s largest bilateral programmes. Figure 7.1 traces the development of aggregate annual expenditures.

7.3 Total Danish aid expenditure to Uganda from 1987-2004 was DKK 5,288.5 million (roughly USD 900 million at the present exchange rate). The initial expenditure in 1987 of DKK 33.7 million rose to a high point in 1998 of DKK 457 million. Between 1998 and 2001 average annual expenditure was DKK 437m. In the three subsequent years for which figures are available, 2002-2004, a lower plateau is evident, with an annual average of DKK 355m. This drop in Danish aid flows is linked to the review of Danish aid mentioned in 6.9 above.

Figure 7.1: Danish Annual Aid Expenditure in Uganda, 1987–2004

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Source: NCG Pre-Study of Uganda Country Programme Evaluation (NCG, 2006). See Appendix D, Table D11 for source data.

Components of the bilateral programme

7.4 These figures are for the total of bilateral Danish aid to Uganda. The total bilateral programme is defined to include four elements.¹⁹ The country programme is the main element, for which indicative planning figures²⁰ are discussed between MFA/Danida and GOU at the annual consultations. Elements of the bilateral programme that are not included in the country programme are (a) the Private Sector Development Programme, which is a separate funding line; (b) “NGO projects” – i.e. expenditures on projects in Uganda by Danish NGOs funded directly by MFA/Danida headquarters; (c) “personnel” – expenditures on advisers, technical assistance, scholarships. Figure 7.2 shows the relative importance of the country programme and other components.

Figure 7.2: Total Expenditure by Programme Type

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Source: NCG Pre-Study of Uganda Country Programme Evaluation (NCG, 2006).

7.5 Figure 7.3 shows annual expenditure by programme type. Expenditures outside the country frame have had greater relative importance in recent years (mainly because of growth in Danish NGO expenditures and the introduction of the Private Sector Development programme).

Figure 7.3: Annual Danida Expenditure, Type of Programme, Uganda 1987–2004

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Source: NCG Pre-Study of Uganda Country Programme Evaluation (Figure 3.1) (NCG, 2006). See Appendix D, Table D11 for source data and an explanation of how the NCG Pre-study dealt with discrepancies in the available records.

“Over-programming”

7.6 Apart from the difference between the “country programme” and the total of “bilateral aid”, actual expenditure on the country programme has often exceeded the planning figure (the “country frame”) by a substantial margin (see Table 7.1). This reflects deliberate “over-programming”, which seems to have two components: (a) individual project approvals are at a level which would exceed the country frame if all were implemented in full and on time; and (b) ad hoc additions are made to absorb available funds. Uganda has benefited, relative to Denmark’s other aid partners, from its superior ability to absorb aid. Thus the 1996 Agreed Minutes include the following explanation of over-programming:

The Danish delegation informed that the total spending on the Danish programme in 1995 exceeded the planned figure of 250 million DKK and informed that for 1996 there will equally be room for additional spending. The aim for total disbursement for 1996 would be a maximum of 330 million DKK, provided that eligible and support-worthy projects could be identified, and keeping in mind that such projects should not create a spin off into the following year. The new projects might therefore especially be found within the frame of multilateral debt relief and infrastructure (roads). (Uganda–Denmark Development Cooperation Programme, 1996:12)

7.7 This was still a feature in 2001²¹ but the reduction in Danish aid to Uganda is reflected in a much smaller difference between country frame and actual country programme expenditures in subsequent years. (Even so, Table 7.1 shows that 2002 was the only year since 1992 in which actual country programme expenditure was less than the country frame.)

Table 7.1: “Overprogramming”: Indicative Country Frame and Actual Expenditures

Source: Agreed Minutes of Annual Consultations (AM), 1989–2001 and 2003, and NCG Pre-Study (NCG, 2006). See Appendix D, Table D16 for source data.

Relative importance of Danish Aid to Uganda

7.8 Figure 7.4 and Table 7.2 (using OECD DAC disbursement data) show trends in the total of all donors’ aid to Uganda and the percentage share of Danish aid in that total. The share peaked in the 1990s (over 9% in 1996). Its decline since is due more to increased aid from other donors than to the recent tapering off of Danish aid.²² From 1994 through 2000 Denmark was the third or fourth largest donor to Uganda; its ranking in 2004 had declined to seventh, providing less than 5% of all Uganda’s ODA.

Figure 7.4: Uganda Total Aid (USD m) and Danish Aid to Uganda (% of Uganda Total Aid)

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Source: OECD DAC International Development Statistics online http://www.oecd.org/dac/stats/idsonline [Accessed September 2006]. See Table 7.2 for source data.

Table 7.2: Danish Aid vs. Total Aid to Uganda 1987–2004

Source: OECD DAC International Development Statistics online http://www.oecd.org/dac/stats/idsonline [Accessed September 2006].

Notes:
* in current prices.
** Ranking: Where 1 is the donor that disbursed the largest amount of aid in the year.

Relative importance to Danida of the Uganda programme

7.9 Figure 7.5 shows trends in Danish total aid, and aid to Uganda as a percentage of the Danish total. From less than 1% of Danish aid in 1985, the Uganda programme rose steadily to over 8% by 1993. It declined in relative importance after the millennium, but its share actually increased again after 2002 (i.e. aid to Uganda fell by less than total Danish aid).

Figure 7.5: Danish Total Aid (USD m) and Aid to Uganda (% of Danish Total Aid)

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Source: OECD DAC International Development Statistics, DAC online [Accessed September 2006]. See Appendix D, Table D9 for source data.

Notes: Total aid is the aggregate of OECD DAC data: grants total + loans extended. USD in 2004 prices.

7.10 By 1992 Uganda had become Denmark’s third largest aid recipient country (DAC statistics, see Appendix table D10) and it remained in the top three for a decade. Between 1996 and 2000 it was at least second, but from 2002 onward it has slipped to fifth or fourth.

Sector Composition of Danish Aid

Sector composition

7.11 Figure 7.6 shows the approximate breakdown of expenditures by sector for the entire period, while Figure 7.7 shows the annual breakdowns. (Sector breakdowns are only available from 1991 onwards; earlier expenditures are all included as unclassified.) The component programmes underlying these figures are reviewed in the next chapter.

Figure 7.6: Total Danish Expenditure by Sector

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Note: Decentralisation was a significant component of expenditure. Table 8.7 below identifies about DKK 300m of expenditure on decentralisation during the period from 1992 onward (about 6% of total Danish expenditures). Much of this is included in the HRD (Human Rights and Democratisation) sector category, but expenditures on the Rakai District Development Programme are distributed among the various sectors shown above. This makes it impossible to show “decentralisation” as a separate sector within this classification, but we estimate that between 30–50% of the HRD expenditures could be considered as support to decentralisation. Source: NCG Pre-Study of Uganda Country Programme Evaluation (NCG, 2006).
See Appendix D, Table D12 for annual source data. See notes to Figure 7.7.

Figure 7.7: Annual Danida Expenditure by Sector, Uganda 1987–2004

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Source: NCG Pre-Study (see Appendix D, Table D12) (NCG, 2006).

Notes: (a) 1987–1990: no sector breakdown available. (b) Due to their small size, the following sectors have been renamed unallocated/unspecified: other social infrastructure and services; other emergency assistance and distress relief; gender; environment; administrative costs of donors;. (c) HRD includes a substantial component of support to decentralisation (see note to Figure 7.6 above.)

Danish NGOs

7.12 The inclusion of “NGO projects” in the total is something of an anomaly. This category covers expenditure on Ugandan projects by Danish NGOs funded directly by Danida in Copenhagen.²³ The figures have been added retrospectively to the analysis, but this assistance was not explicitly planned as part of the country strategy.

Table 7.3: “NGO Projects”: Sector Breakdown 1991–2004

Source: NCG Pre-Study (NCG, 2006).

Note: See Appendix D, Table D15 for additional detail. Discrepancy between the above total and Figure 7.2 is explained in notes to Appendix Table D11.

7.13 As far as the available data allow, Table 7.3 shows the sector breakdown of this expenditure. In the early period, most Danida-funded projects were in infrastructure, vocational training, HIV/AIDS, and support for special groups. There was some collaboration between Danida and Danish NGOs on primary school construction and in health. Since the mid-1990s, Danish NGOs have shifted the focus of their activities towards building capacity in Ugandan CSOs for poverty reduction, for gender and rights issues, and for peace and reconciliation. While there has been no conscious effort to align the work of the Danish NGOs in Uganda with the Danida programme there has been a convergence between their objectives and those of Danida. This has created recent openings for collaboration between Danida’s Human Rights and Good Governance Liaison Office (HUGGO)²⁴ in Uganda and some Danish NGOs on anti-corruption work and support to district Networks. 

Relative importance of Danish aid by sector

7.14 It is difficult to be precise about the shares of Danish aid at sector level, because of the poor quality of available data on the sector allocation of other donors’ aid. Table 7.4 gives an approximate²⁵ indication of the importance of Danish aid in various sectors, relative to aid provided by other donors.

Table 7.4: Danida Share and Rank by Sector

Source: OECD DAC Creditor Reporting System online at http://www.oecd.org/dac/stats/idsonline
Notes: * ranking 1 = donor with largest commitment.

7.15 Danida’s relative importance, in aggregate and at sector level, has changed over the period.²⁶ Thus:

• In health, water & sanitation and governance (“government and civil society”), Denmark was a very prominent donor in both halves of the period.
• However, only in agriculture and governance did the Danida share of total aid increase between the first and second halves of the period. In other sectors the importance of Danish aid was diluted as the number of other active donors increased.
• The figures for education show the effects of Denmark’s decision to concentrate on the health sector.
• The figures for “Transport and Storage” in the first half of the period are dominated by a few major projects (notably Entebbe Airport and Fort Bell ferry terminal – see Chapter 8, Table 8.4). As a roads donor in the second half of the period, Danida was a much smaller player.

7.16 The significance of Danida’s relative weight in different sectors, for Danish strategy and for Danish influence, is further discussed in the next chapter.

19) The NCG Pre-study is not always consistent in observing the distinction between the total bilateral programme and the country programme that is applied here.

20) Sometimes referred to as “the country frame”

21) The Head of the Danish Delegation informed that the official country frame for 2001 was DKK 280 mill. However, disbursements for 2001 would be no less than DKK 325 mill. for the direct bilateral assistance. (Uganda–Denmark Development Cooperation Programme, 2001:7.)

22) Note that the recent decline in DKK disbursements is masked in USD terms by the appreciation of the krone vis-à-vis the dollar (exchange rate information inside front cover and at Appendix D, Table D1)

23) There is additional financing of NGOs within Uganda through the country programme, notably through the Local Grant Authority and under the Human Rights and Democratisation Programme (HRDP).

24) On HUGGO, see Box 9.4.

25) Very approximate, because based on commitment, rather than actual disbursement, data, and because there are obvious anomalies in some years of the source data.

26) It is likely that these figures understate the relative importance of Danish aid flows. Commitment data are notoriously higher than eventual disbursements, but Danida’s record of disbursement in Uganda is very good.