The Independent Uganda: You get the Truth we Pay the Price
Aid programmes, local economy in turmoil
ANALYSIS | IAN KATUSIIME | Aid programmes in Uganda are in a severe crisis following the shutdown of United States Agency for International Development (USAID) by President Donald Trump. The shuttering of USAID, America’s primary vehicle for humanitarian assistance, has caused consternation in the developing world.
USAID has a budget of $50 billion and channels foreign aid to countries in Asia, Africa, South America, and the Middle East. For poor countries like Uganda, USAID is the lifeblood of their health sectors.
On February 7, all USAID direct hire personnel were placed on administrative leave globally, with the exception of designated personnel responsible for mission-critical functions, core leadership and specially designated programs.
Thousands of staff in Uganda were furloughed earlier in January following the stop work order issued by USAID pending a review of U.S. foreign aid for ninety days. But with the shutdown of the USAID office in Washington, it is essentially a closed chapter for the organisation.
The Trump administration accuses USAID of wastefulness, being involved in money laundering, and sponsoring covert operations in other countries resulting in anti-American bias.
A host of USAID implemeting partners have laid off their staff since the funding was frozen. The partners were prohibited from making any expenses under exisitng awards. A USAID notice gave instructions that the only allowable costs were those “associated with stop-work orders, suspensions, or pause-related amendments.”
Some of the implementing partners in Uganda include Medical Access Uganda limited, Joint Clinical Research Centre, Joint Medical Store, Infectious Disease Institute, Makerere University, World Food Programme, World Health Organisation among others.
Debate is underway on what the closure of the American aid agency means for the local economy in terms of conferences, projects, programmes and gigs that have been brought to an abrupt halt. By extension, hotels, restaurants, cafes, internet service providers, car bonds, office rentals are counting their losses.
“We are over 5000 contractors,” said someone who was among those given a stop-work order while working on USAID-funded activities in the health sector. Some of the activities were big service delivery projects with over 300 staff but some are smaller in scope with about 10-15 employees.
“We are now jobless at the moment,” said someone formerly working on HIV prevention among key populations under a USAID project.
Herbert Luswata, the president of Uganda Medical Association, told journalists that over 2000 medical workers were affected by the order. These included lab technicians and other staff in the medical supply chain.
The gutting of USAID has cast a cloud over Uganda’s health sector which is heavily reliant on American tax payer’s money. USAID was supporting parts of the AIDS Control Program, National Tuberculosis and Leprosy Program, and Health Systems Strengthening per sources in healthcare work.
Millions of Ugandans depend on U.S. aid to receive treatment for HIV, malaria, and other epidemics. This aid has also supported maternal and child health, vaccine delivery and other forms of basic health assistance.
USAID was key during the Covid19 response in Uganda. In 2021, at the height of a deadly variant, USAID contributed US$3.5 million for oxygen and other supplies. During the Ebola outbreak in 2022, Ministry of health received viral hemorrhagic fever kits from the agency including gloves, boots, masks and scrubs.
According to U.S. foreign assistance data, U.S. aid to Uganda amounts to $710 million (Shs2.5 trillion) per year—the bulk of it going to HIV/AIDS treatment— with over 700,000 Ugandans receiving lifelong ARV therapy through the President’s Emergency Plan for AIDS Relief (PEPFAR).
The USAID funding of health activities in Uganda is almost double what the health sector was allocated in the 2024/2025 budget at Shs1.3trn. Ugandans working on several projects affected are still processing the development because of how abrupt it was.
The U.S. government issued a waiver for medical assistance and life saving programs after the outcry but it was ill-defined and a lot of the medical assistance and a lot of the programs are already in jeopardy.
The spending freeze is already affecting emergency relief for hunger and other crises especially in remote parts of the country. USAID work in Uganda also extends to agricultural activities under Feed the Future programme. The suspension of aid has spelt doom for a population dealing with famine, disease outbreaks, poor access to clean water and ill-equipped health facilities.
The Ministry of Health declared an Ebola outbreak days after the freeze. Uganda is battling Mpox with close to 1000 cases detected.
Diana Atwine, the Permanent Secretary, Ministry of Health, said the decision on USAID funding was an opportunity for the country to also evaluate its priorities. “We will sit down and analyse what are the critical activities which we cannot postpone. We are going to engage Finance and the broader government to see the critical areas affected,” she told journalists.
Implications for economy
Someone working in the NGO sector offered an assessment of the closure of the American agency on Uganda’s economy.
“OK. Let me try to put it as plainly as possible. From both a personal perspective and from my friends who are also affected…
Most USAID funded NGOs and IPs (implementing partners in the health sector) usually give one year contracts. Most run from January to December, while others run on the USA tax year (October to September)…” he said.
“For someone in the first category, you’ve probably just eaten your December salary in enjoyments, kept something little for fees with the hope that you will use January salary to clear the balance, then boom! The 90 day forced leave hits you. Can you imagine the financial and mental strain such a person is undergoing right now?,” he asked.
He said the situation is not made any better by the inability of government to create jobs.
“Let’s look at it from the bigger perspective. These people have been earning a higher than average salary (mpozi how many Ugandans earn more than 1m a month?) and have been a lucrative market for bank loans and mortgages, these NGOs have been paying quite a handsome figure in NSSF contributions, which NSSF reinvests in the bigger economy to pay out good dividends every year to it’s savers…”
He added that the other economic implications extend to the insurance sector since many NGOs offer health insurance to their staff. “Imagine the implication of losing all those premiums to the insurance companies. The same staff also took out personal policies which many may either put on hold or be forced to abandon which will further hit the insurance players.”
Like many, he fears for what the MICE (Meetings,Incentives, Conferences and Exhibitions) industry is going to look like a few months down the road given that it is largely kept alive by NGOs. “With the loss of USAID billions all those players are going to be forced to look for the money elsewhere and where will it come from?
He also stressed that USAID has been paying for the development of Information, Education and Communication materials (posters, banners, booklets) which are used to convey public health messaging. But it has been doing the same in agriculture and education.
One of the most well known ICE programs was ‘Obulamu’ which is a social and behavioural change activity (SCBA) brand running integrated messages influenced by behavioural science and diverse communication approaches. It has run campaigns for years on traditional and social media.
“Did you know all that printing has been taking place along Nasser Road? With USAID money gone I’m certain MDAs are going to resort to sharing soft copies of such materials and our people down town will also fee a direct pinch!” He said, “If USAID indeed shuts down, no individual or industry in Uganda won’t feel it’s direct or indirect effects because capitalism survives on purchasing power and I’m sorry to say that thousands have just lost that purchasing power.”
