Uganda can withstand donor funding cuts, says minister Musasizi

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The minister of finance in charge of general duties, Henry Ariganyira Musasizi, has assured Ugandans that the government remains steadfast and capable of sustaining the country’s economic operations despite recent cuts in foreign aid, most notably from the United States Agency for International Development (USAID).

This reassurance follows growing public concern after the abrupt global shutdown of USAID operations — a decision taken under the administration of US President Donald Trump. For decades, USAID has been a cornerstone of humanitarian assistance in Uganda, supporting various sectors, particularly health.

Musasizi made the remarks while officiating as guest of honour during the climax of the 15th Caritas Week celebrations, held at Our Lady of Good Shepherd Rushoroza Cathedral in Kabale Municipality on Sunday, April 13, 2025. The event attracted hundreds of faithful, development stakeholders and political leaders, all grappling with the implications of the shifting aid landscape.

Shuttering USAID and its implications

The Trump administration’s decision to halt USAID operations sent shockwaves across many developing countries, including Uganda. With a $50b budget, the agency has been America’s primary vehicle for delivering foreign aid across Asia, Africa, South America and the Middle East. In Uganda, the health sector has been the most reliant on USAID support.

On February 7, 2025, all USAID direct hire personnel were placed on administrative leave, except those involved in mission-critical functions. Thousands of staff in Uganda had already been furloughed in January following a “stop work” order, pending a 90-day review of U.S. foreign aid.

The shutdown, now viewed as permanent, has not only frozen project implementation but has also triggered layoffs among implementing partners, including Medical Access Uganda Ltd, the Joint Clinical Research Centre, Makerere University, the World Food Programme, and the World Health Organisation, among others.

A USAID-issued notice stated that only costs related to “stop-work orders, suspensions, or pause-related amendments” would be allowable — effectively halting ongoing development and humanitarian projects.

Impact on health services

The suspension of USAID support threatens to derail critical health interventions in Uganda. Millions of citizens depend on US aid for HIV/AIDS treatment, malaria prevention, maternal and child health care, and vaccine distribution.

USAID’s contribution was especially crucial during Uganda’s COVID-19 response. In 2021, at the height of the pandemic, the agency provided $3.5m to procure oxygen and other emergency supplies. During the 2022 Ebola outbreak, it supplied viral haemorrhagic fever kits, including gloves, boots, masks and medical scrubs.

According to US foreign assistance data, Uganda has been receiving approximately $710m (about sh2.5 trillion) annually from the US, with the largest portion allocated to HIV/AIDS treatment under the President’s Emergency Plan for AIDS Relief (PEPFAR). More than 700,000 Ugandans are currently on lifelong antiretroviral therapy (ARVs) funded through this programme.

This annual support nearly doubles Uganda’s national health sector allocation for the 2024/2025 financial year, which stands at sh1.3 trillion — underlining the depth of the country’s dependency.

Govt: We shall not die

In his address, Musasizi expressed confidence in Uganda’s capacity to weather the situation. He said that while the road ahead may be challenging, Uganda will emerge stronger by embracing self-reliance.

“We shall sustain ourselves. We shall suffer, but we shall not die. That is what the president has always guided us to do. For instance, when the Americans pulled out due to the anti-homosexuality law, they thought we were going to die — but we did not. We have so far run through two financial years where we have sustained ourselves without their support,” said Musasizi.

He also confirmed that the government has already reallocated funds in the 2024/2025 budget to replace the aid previously provided by USAID, particularly for HIV/AIDS programmes.

“Those of you who have been worried that the funding which has been coming in for health, especially for HIV/AIDS programmes, is no longer available — you should know that we have already provided funding in the next financial year to replace it. I encourage you to work hard, and we sustain ourselves as Ugandans,” he said.

Call to the church and partnerships

Minister Musasizi used the platform to highlight the vital role of the Church in offering hope and supporting development, particularly among vulnerable populations.

He reaffirmed the government’s commitment to working closely with the Church to create a conducive environment for service delivery and achieving national development goals.

“Your Lordship, you are aware that the Government of Uganda, through its ministries, regularly provides funding to NGOs on a Public-Private Partnership basis. Ministries such as Agriculture, Gender, and Social Development have issued calls for proposals many times,” he said.

Musasizi commended the Catholic Church for its longstanding contributions to Uganda’s socio-economic development, especially in education, health and financial inclusion.

“The Catholic Church, since the pre-independence era, has established and continues to manage numerous educational institutions across the country — from nursery schools to tertiary institutions,” he said.

He also acknowledged the Church’s efforts in reaching underserved communities through health facilities and skills training programmes, particularly in agriculture and value addition. Financial institutions rooted in Catholic missions, such as Centenary Bank, Promic Kabale, and HOFOKAM, were recognised for promoting financial access among the unbanked.

“These initiatives, many of which started under Caritas, align with the government’s priorities as outlined in the National Development Plan IV, especially in key sectors like agriculture and minerals,” Musasizi noted.

Tackling poverty through community-based efforts

While acknowledging Uganda’s macroeconomic progress over the past four decades, Musasizi admitted that poverty continues to affect many households.

He cited government-led initiatives such as Emyooga, the Youth Livelihood Programme (YLP), the Uganda Women Empowerment Programme (UWEP), Operation Wealth Creation (OWC) and the Parish Development Model (PDM) as strategic efforts to help communities escape poverty.

“These programmes are designed to help poor households access funding and inputs to invest in profitable enterprises that can improve their livelihoods. Through its community-based efforts, the Church is directly contributing to the goals of these programmes. We urge Caritas and the Church to continue raising awareness and mobilising community participation,” he said.

He further encouraged Caritas to position itself competitively in order to tap into government funding opportunities.

Voices from the church

The Bishop of Kabale Diocese, Rt. Rev. Callist Rubaramira, called on Caritas leaders to promote a culture of mindset change, particularly in family development planning.

“Part of the mindset change I would like us to encourage is walking together and holding more family meetings. Africans do not have the culture of family meetings. Caritas should champion this to help our families appreciate the value of planning together in development initiatives,” said Bishop Rubaramira.

Rev. Fr Vincent Byaruhanga, director of the Caritas Commission for Kabale Diocese, expressed concern over Caritas Uganda’s increasing vulnerability due to declining foreign support. He said many diocesan projects had been severely affected by the withdrawal of American aid.

However, Rev. Fr Hillary Muheezangango, the national director of Caritas Uganda, struck an optimistic tone, revealing that during their week-long retreat, Caritas leadership had explored sustainable alternatives to foreign funding.

“We have discussed that it is very important if we still want Caritas to thrive — to support our people and get them out of poverty. We have seen that each diocese needs to develop a social enterprise to address the challenges of its people. We also appeal to the government to involve us more in planning and implementation of its development initiatives,” said Fr Muheezangango.

Local problems, local solutions

Kabale Municipality MP, Nicholas Kamara, echoed the call for sustainability, urging Ugandans to embrace a culture of giving and to support organisations like Caritas through local donations.

“We cannot rely on foreign aid forever. We must support our systems so that they can stand on their own feet,” Kamara said.

Ndorwa East MP, Wilfred Niwagaba, raised concern about the drastic decline in passion fruit production in his constituency, which was once a leading supplier in Uganda’s fruit industry.

“In the 1990s, areas like Karweru, Kafunjo and Birambo produced at least two lorries of passion fruits weekly, which were sent to fruit factories in Kampala. Today, we see none of that activity,” he said.

Niwagaba called on Caritas Uganda and the National Agricultural Research Organisation (NARO) to investigate the causes of this decline and devise interventions to revive the once-thriving industry.