From Aid to Trade: MUSEVENOMICS, Trumps 2.0, Global Donor Restructuring, Aid Dependency Economics and The Potential Looming Crisis in the Karamoja NGO Sector

Introduction

On Friday the 7th February 2025 President Trump publicly stated his intentions about the USAID agency. His 3-word statement published on his Truth Social Media Account put it bluntly “CLOSE IT DOWN!” This statement has no doubt shaken many beneficiaries, staff and USAID funded organizations around the world.

For the NGO community in Africa but specifically in Uganda and Karamoja it is just another straw on the back of a camel that is already dangerously laden. For the past 5 years the donor space has been shrinking. The COVID-19 epidemic, the Russia-Ukraine and Israel-Gaza Conflicts, resultant slowed global economic growth coupled with Economic Sanctions on Uganda has led many donors to cut down on overseas development assistance/aid.

In Karamoja, a region that is moving from conflict to reconstruction donor funding is reflecting this shift aid, charity and pity to wealth creation and trade opportunities. The government of Uganda has also completely shifted its policy on Karamoja from a reaction and crises response to more proactive short-, medium- and long-term developmental policies. Donors spending around $60 Million USD annually in Karamoja (KARAMOJA DONORS MAPPING REPORT 2021)

USAID funding alone represents 65% of all donor funding in Karamoja. Valued at over $37 Million Dollars

We have written about this in our article

https://karamojatrumpet.wixsite.com/my-site/post/karamoja-are-we-planning-to-fail-or-failing-to-plan-looking-at-govt-and-ngos-from-2019-to-date

Karamoja is also facing interest from large multi-national corporations who seek to tap the regions vast agricultural, tourism and mineral wealth with billions of dollars in investments expected in coming months and years.

This article is not a critique of the donor aid cuts, nor is it a critique of the NGOs in Karamoja. We simply aim to take a deep dive look at the state of the NGO sector, its strengths and weaknesses, How the Government of Uganda has been slowly weaning itself off of aid, as well as propose solutions on how NGOs, CSOs in the region and Uganda can adapt in a shrinking donor/civic space

The state of Non-Governmental Sector in Karamoja

Karamoja has a multitude of NGOs, CSOs, Faith Based Organizations, Aid Agencies and UN bodies. While many do vitally needed work such as scholarships for students, water supply, support to healthcare systems, livelihoods wealth creation support and food relief, there is a portion of NGOs that are operating more as businesses that are more concerned with fundraising than solving problems or transforming the region for the better.

The NGO economy crisis

The proliferation of NGOs and CSOs in Karamoja and the influx of tens of millions of dollars, Euros and Pounds annually has created a new problem. Like in many regions that are transitioning from conflict to peace, donors and NGOs have become a major source of employment. Over the past 20 years or so the vast majority of Karimojong that have had the opportunity to go to university end up studying social sciences or development related courses in the hopes of securing an NGO or UN job in the region.

The Donor Community and NGOs have unknowingly created an entirely new economy running parallel to the formal economy. This has created an economy that is dangerously co-dependent on international donors and foreign aid not just for the poor but even for the elites in the region. The various hotels, radio stations, restaurants etc. all receive in one way or another support from these organizations based on simple trickle-down economic theory through workshops, sensitization programs etc.

While the bulk of aid goes to providing much needed support in sectors such as education, health, infrastructure and livelihoods there is a lot of funds that end up in the economy mainly through salaries, but also from the various workshops and programs in the urban centers.

The end of the age of easy money for NGOs and Government

Covid-19 Marked the end of the age of easy money in most sectors. Even big financial institutions globally begun to crack under the pressure with many key banks collapsing but one of the greatest places where these cuts are felt more deeply than the boardrooms of financial capitals is in the developing world. Where Donor support often makes the difference between life and death. Starvation and survival, between poverty and prosperity.

We must note that Donor Funds are taxpayers’ money from the donor country and the citizens and leaders of those countries have a right to decide how their funds can be spent and we must also be cognizant that donor support is meant to be complementary to State or Government programs or only temporary to enable the governments focus on other priorities to raise funds to take over these services in the medium terms.

We in the developing world have in many cases missed or failed to fully capitalize this great opportunity to both build internal capacity as well as build robust and sustainable socio-economic-political systems. For example, for over 2 decades in healthcare where USAID was supporting a large portion of our healthcare budget, we have still remained dependent on aid and this has left us vulnerable in light of President Trump’s Decree. If we go to infrastructure Economic Sanctions resulting from the controversial AHA Act many left many Worlds Bank funded programs vulnerable or in limbo

Musevenomics: From Aid to trade

While the Ugandan economy, virtually all human development indicators, life expectancy and quality of life has grown exponentially since 2001, extravagance, corruption and in many cases lack of adequate spending on social services have meant that we are still to an extent dependent on donor support or worse loans to sustain our way of life. Our Debt to GDP ratio has been rising steadily and while the President has tried to remedy this by personally investigating all loan requests there are still significant issues in Public Over Expenditure.

One analyst who sat in a meeting on Karamoja was shocked by how casually some government officials were budgeting for trillions of shillings “they are budgeting for 500 billion the way some people budget when they are buying ground nuts from the street hawkers”  

President Museveni and the Government of Uganda in recognizing this problem have attempted some short, medium and long term remedies such as large scale, nationwide infrastructure projects aimed at driving down the cost of production, investor charm offensives abroad to secure much needed capital and lastly nationwide socio-economic Agricultural protection programs for Youth, Women and Elders aimed at expanding the production base, improving both quality and quantity of exports to spur economic growth.

Way Forward/Conclusion

As the donor space globally and in Uganda shrinks due to the above-mentioned factors and as Karamoja moves from conflict to reconstruction there is potential that there will be significant economic shocks in the short term however given government pledges to regional development, there is hope for a less dependent and more self-sustaining future.

For the Government

We at the Africa Leadership institute (Peace and Conflict Transformation Department) commend the improved fiscal policy and new economic regime

1.        We believe fiscal tightening and deeper scrutinization of budgets by the Presidential Committee on Budgets (PACOB) and other relevant measures should at the very least be considered as necessary prerequisites in order to fully achieve the vision 2040 Targets or greater.

2.       The current state of extravagance by many elites in service is unsustainable and perhaps the greatest danger to the country. People who are already earning large sums of money as salaries and per diems should be more frugal.

3.       The government should consider improving and expanding its approach of consultation and mobilization of grassroots development actors in order to include them in the design, implementation and evaluation of Government programs.

For the Donors

We commend al the support that the donor community has given since independence which has helped millions if not tens of millions of lives through the various programs in Uganda.

1.       All aid should be considered transitional and donors should have clear targets and expectations from NGOs and Government MDAs so as not to create a dependency,

2.       Donors should continue shifting from Aid model to a trade model where both nations benefit economically and socially. This shift has already been taking place and can be reflecting in many Embassies 5-year strategies which is commendable. It has also been felt on the ground. This approach is a form of Social Capitalism or Capitalism with a human face where both countries can tap into their respective strengths.

3.       In Karamoja specifically donor nations should follow the footsteps of China and consider investing in the vast potential of the region through value addition of minerals.

For NGOs

1.       COVID-19, impacts of Ukraine and Israel-Gaza Conflict, a West that is focused on domestic affairs and economic issues, Uganda's commendable stance on the Anti-Homosexuality Act and Anti-GMO policy have all led to significant reductions in humanitarian assistance to countries like Uganda. That being said Donor Nations still spend at least 100m USD in Uganda each year. It appears that the NGO bubble in Uganda has burst and organizations must adapt.

2.       No longer will mealcardism, perdiemism and workshopism be the order of the day. It is about achieving more with less resources. Innovation, value for money and adaptability are very important.

3.       There is also some interesting new phenomenon of some NGOs engaging in productive activities as social enterprises to supplement their humanitarian work. By working as social enterprises they don't pay taxes and get to use funds earned to essentially be their own donors. It is currently being implemented in small and medium scale in some districts.

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