African graft stings donors

Uganda - a small, poor country still best known for its infamous former dictator, Idi Amin - isn't used to being first in much. But in the 1990s, it became the first African country to substantially bring down its AIDS rate.

It has since become a darling of international donors, especially in the health sector. So no one was surprised when, in 2003, Uganda became one of the first countries to receive a multimillion-dollar grant from the Global Fund to Fight AIDS, Tuberculosis, and Malaria.

But three years later, the phrase "Global Fund" has become synonymous with graft in Uganda. A government inquiry recently revealed that tens of millions of dollars of the country's Global Fund grants have gone missing, much of it plundered by high-ranking public officials. Through months of hearings, which began in September and concluded just a few weeks ago, a disgusted Ugandan public heard how monies meant for lifesaving AIDS drugs were spent on personal phone bills, lavish "Christmas packages," and fancy four-wheel drive vehicles.

Along with increasing an already high level of cynicism here, the scandal highlights the corrosive nature of corruption in Africa and demonstrates the difficulties donors face in giving recipient governments the autonomy needed to spend aid money efficiently while also making sure the funds are used appropriately.

Problems with Global Fund monies have surfaced recently in other countries as well. Kenya was warned by Fund officials in March to report the whereabouts of $10 million that was unaccounted for or see its grants yanked. Some Fund grants in Nigeria were recently suspended for mismanagement.

Aside from Uganda, graft in connection with Global Fund monies has not been substantiated in any of these countries. Still, the questions raised reflect a growing emphasis in international circles on combating corruption around the world, especially in Africa. A survey quoted by the African Development Bank last month put the cost of graft on the continent at $148 billion per year.

And as the West tries harder than ever before to end poverty in Africa - the Group of Eight industrialized countries (G-8) last year agreed to double aid to the continent to $50 billion annually - the Global Fund scandal in Uganda also calls into question the fashionable idea that all that's needed to promote development in poor countries is more money.

"In hindsight, maybe we were a bit naive," says Victor Bampoe, the Fund's portfolio manager for East Africa. "But I struggle to see how we would have done things differently."

The Global Fund, a Geneva-based public-private partnership set up in 2002, was to be a new transparent, efficient aid model that would avoid the politics and delays that have long hamstrung development efforts. The idea was that the Fund would be strictly a financing mechanism; decisions about how to spend the money would be decided by local players.

"There is increasing recognition that aid has to be more than putting a bunch of white doctors on a plane and telling them to hand out pills," says Bernard Rivers of AIDSPAN, a Global Fund watchdog group. But, he added, "There is a tension between efficiency and accountability."

The Global Fund is the largest single financing agency in the world to combat the three diseases. It has raised more than $5 billion from donor governments and private philanthropies, and funded programs in 131 countries.

By last August, Uganda had already received more than $45 million of the $201 million that was earmarked for the country over the course of two years when a whistle-blower cried foul. After ordering an outside audit, Fund officials suspended Uganda's grants, citing "serious mismanagement." They were restored several months later, after the government commissioned an inquiry. It also agreed to changes in how the money was being disbursed and overseen, starting with the dissolution of the office responsible for doling out the funds, the Project Management Unit, which one Fund official likened to "a piggy bank" for those with the right connections.

Judge James Ogoola, who headed the probe, called it "no less than an audit on our country's moral standing." He found that hundreds of millions of shillings had been spent on "sensitization workshops" and generous "hardship allowances" for everyone from secretaries on up. A number of organizations that received Fund money had no physical addresses, let alone any experience in the health field. Officials in the Ministry of Health also testified that they had "borrowed" Global Fund money to campaign for a referendum to change the constitution to allow President Yoweri Museveni to run for a third term.

Local AIDS groups were particularly outraged when it was revealed in April that some $22,000 had been taken from the Global Fund basket to pay the hospital bills of a former government minister.

"Uganda has received a lot of money for AIDS - probably more than people can imagine in Africa," says Rubaramira Ruranga, a well-known AIDS activist. Mr. Ruranga faulted donors and the Ugandan government for fostering a system that tolerates, if not encourages, corruption. "AIDS in this country has become an industry," he says.

Global Fund officials say that the Ugandan government has cooperated with Geneva to put in better oversight mechanisms, such as hiring an outside company to serve as a "caretaker management firm." They say that, in general, the Fund had tightened "checks and balances" everywhere. "This is an opportunity to dust ourselves off and move forward," says Mr. Bampoe.

Last week, a newly reelected Museveni announced that the three ministers implicated in the scandal would be dropped from his new cabinet. A spokesman said the President was "responding to the public mood." Charles Mubbale, a director of the Ugandan chapter of Transparency International, says it is unlikely the ministers will face any official censure in the end. The Daily Monitor, a local newspaper, called the entire inquiry an "elegant diversion" to placate donors.

Mr. Mubbale says a deeper problem is the pervasive cynicism among Africans that comes from often seeing graft rewarded rather than punished. "The hard-working person who doesn't steal ... they say he's stupid and lazy," says Mubbale. "It's become an attitude of, well, let's just wait our turn."