The Netherlands is one of the most important development partners of the government of Uganda. Per annum the Netherlands government donates approximately 50 million € (approx. 112 Billion Uganda Shillings) to Uganda in aid, including for humanitarian purposes. The Netherlands policy for development cooperation in Uganda is laid down in the Multi Annual Strategic Plan of the Netherlands embassy in Uganda (2008-2011) of which below you will find a summary.

Uganda and the Netherlands have shared interests. There is overlap in our policy agenda’s, concerns about good governance in Uganda notwithstanding, the Ugandan government has been able to create a rather stable Uganda and is genuinely committed to parts of the poverty alleviation agenda. The overall macro economic policies of Uganda are good. The very high population growth remains a concern however and poor infrastructure is a binding constraint to economic growth in the country. There are serious challenges with leakages, waste, inefficiencies and corruption in the production of public goods and services. The cessation of hostilities in the North is a very positive development which seems to radiate some stability in the region as well. For all the above improving dialogue with the Ugandan government will be crucial in the coming years.

One of the lessons learnt from the last Multi Annual Strategic Plan was that the integrated approach to development that the Netherlands embassy uses, has worked well. In Uganda there are chances for progress with MDG-achievement in the education sector and direct involvement with the police has been a good tool to support stability in the country. In terms of building a democratic Uganda, the embassy feels it is more realistic to promote multi voice in support of the emerging multi party system. The embassy’s strength was being a reliable partner that works in a flexible and delegated way.

On the basis of our comparative advantage and the agreements reached with other donors in the context of the Uganda Joint Assistance Strategy (UJAS), the Division of Labour in Uganda and the EU-code of conduct, the Netherlands embassy chooses to focus on only two sectors (1. education and 2. justice, law and order) and three cross cutting issues (1. Northern Uganda, 2. political governance and 3. taxation and accountability). The embassy is of the opinion that these sectors and cross cutting issues are very well suited to add to the policy intensifications as laid down in the policy letter to parliament by the Netherlands Minister for Development Cooperation (‘Our common concern’). For each of the sectors and cross cutting issues it will be determined where there is overlap between the agenda of Uganda and the Netherlands, where overlap can perhaps be expanded and where there are risks that need mitigation. For the area of overlap, (sub)sector budget support is considered to be the most effective aid modality. The Netherlands budget support will be part of the Joint Budget Support Framework and will over time be based upon ex-post assessments of achieved results instead of ex-ante assessments of commitment of the Ugandan government. In this way results will be linked much stronger to resources as part of a contractual partnership with the Ugandan government. For expanding the overlap and mitigating the risks context supporting project activities will be identified. The starting point for the embassy is a base case scenario of approximately 35 mln € of aid (excluding humanitarian aid) per year. Based on an assessment of predetermined criteria (to be evaluated in 2009), the embassy suggests to either move to a high case scenario (approx. 50 mln € with a higher % of budget support), or to go to a low case scenario (approx. 15 mln € without budget support in that case), or to remain at the base case level (35 mln €).

As described above, a major characteristic of the Netherlands development co-operation programme with Uganda is the shift from project related aid programmes towards budget support. This implies that much of Dutch aid is no longer linked to specific projects, but goes straight into the Uganda government budget. The rationale for moving towards budget support is the confidence that the Netherlands has in the macro- and socio-economic policies of Uganda. Per year approximately 63% of the Dutch aid is transferred through the budget support modality. 
The releases of budget support will depend on the progress made against agreed benchmarks in the fields of education and justice, law and order and good governance. These benchmarks are agreed upon by different donors and laid down in a so called joint assesment framework. In the two sectors in which the Netherlands government is committed to a long-term co-operation, the engagement is managed through the government led sector-wide-approach.