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Suspension on Non-Governmental Organizations has dire implications to the economy 

Uganda’s NGO Bureau Executive Director Okello Stephen addressing the Press on the suspension of operations of 54 NGO’s last Friday. (Source Uganda Media Centre.)

When the state through the regulator of Non-Governmental Organizations (NGOs), the NGO Bureau suspended operations of 54 NGOs, on the surface it looked like yet another statistic. Between the lines, however, it has far-reaching implications to the national economy. 

The reasons for the suspension of NGOs ranged from failure to register with the NGO Bureau to failing to post periodic returns. From a managerial perspective, the manner in which the Bureau handled the situation shows the ineptness within government.

For starters, none of the affected organizations was officially communicated to raising the issues against which the bureau acted in the manner it acted. All affected organizations were informed of the suspension through media in a news story. The actions of the bureau reek a hidden motive of government trying to discredit the sector as relations between the government and civil society continue to hit shipwreck following the just concluded 2021 elections.

Putting aside debating and adjudicating who is wrong and who is right, the suspension of NGO operations has far-reaching consequences if further analyzed. This brings in the question of understanding the contribution of the NGO sector to the national economy. SecretsKnown implores to paint a picture of the significant contribution of the NGO sector to the national economy.

PAYE and NSSF Contribution: As of August 2021, 2,239 NGOs were approved to operate by the NGO Bureau. Across the labor sector, the NGOs comparatively pay higher salaries and welfare packages, medical insurance inclusive than the public sector. It implies that the contribution to PAYE and NSSF are in higher margins than the public sector.

For instance, an Officer at the middle management level in an NGO earns an average of UGX 2.5 million ($707) as monthly pay while a senior-level manager will earn an average UGX 5 million ($1,414), compared to an average salary of a government employee or a salary of someone working in the SME sector which is comparatively lower. In terms of contributions from PAYEE and NSSF, the remittances from the NGO sector are much higher compared to the public and SME sector. The annual contribution of taxes collected from the NGO sector on PAYE and NSSF, can’t be ignored in the broader economic sense.

Contribution to Aggregate Demand and Social Welfare: The purchasing power parity of NGO employees is relatively higher and they form a significant contribution to the middle class in Uganda. The dependence ratio in Uganda is approximately 1:8 according to a report by UBOS, 2020. When the NGO Bureau stops an NGO staff from earning, it implies that they have suffocated the welfare needs of 8 Ugandans. The NGO staff are among the ones that flood departmental chain stores like Shoprite which improves circulation and velocity of money. There could be a farfetched relationship between reduction in chain businesses and the purge of NGOs at the worst times of COVID 19. Remember the biggest donor funding basket for NGOs, Democratic Governance Facility (DGF) remains closed amidst unending negotiations with government.

Direct Service Provision: NGOs engage in direct service delivery in almost all sectors of the economy. Closing NGOs means denying services to the vulnerable and marginalized majority that are as a result of the NGO interventions. It’s no longer a debate that the current government does not have sufficient resources to address all service delivery needs of its population. Government benefits from NGOs complementing service provision. 

Foreign Currency Inflow (DFIs): Uganda’s export sector has been hit by COVID 19 containment measures. The much-needed foreign currency on the forex markets is low. NGOs are the assured path of direct foreign Inflows (DFIs) with capacity of expanding business. 

The state ought to perceive and treat NGOs as partners than foes. A meaningful and well-intentioned path of dialogue should be considered. Government has to work towards building trust in NGOs and deconstruct the thinking and narrative of civil society being anti-government and engaged in subversive activities just because NGOs are critical to the governance deficits manifested by the regime. 

Government should focus and invest in strengthening the sector by putting in place an enabling legal and policy environment instead of the current choking environment. Both government and NGOs need each other!

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