As Uganda grapples with the fallout from a US foreign aid freeze, experts are warning of significant disruptions to critical NGO programs. The freeze, announced by President Donald Trump and implemented by Secretary of State Marco Rubio, has raised concerns across the country’s development sector.
The suspension affects billions of dollars in funding from the US State Department and USAID, disrupting programs in healthcare, education, and socio-economic development. Although Uganda’s placement on the Financial Action Task Force (FATF) gray list has drawn attention, the freeze is primarily linked to political shifts within the US government rather than Uganda’s stance on anti-money laundering laws.
“It’s not just about anti-money laundering; political dynamics and foreign government decisions also play a significant role,” explained Robert Kirenga, Executive Director of the National Coalition of Human Rights Defenders Uganda (NCHRD-U), during a briefing in Kampala.
He noted that USAID has suspended operations in Uganda for 90 days due to changes in US policy.
Disruptions to Vital Programs
While the full impact of the freeze is yet to be felt, experts predict significant delays or halts to development projects crucial to Uganda’s socio-economic progress. Many NGOs, heavily reliant on US funding, are now focusing on strengthening local partnerships and exploring alternative sources of support to mitigate potential setbacks.
“This suspension will test the resilience of the sector,” Kirenga remarked. “We will continue collaborating with government agencies and local stakeholders to maintain progress.”
Regulatory Relief for NGOs
In response to the challenges, Uganda’s Parliament passed an amendment to the Anti-Money Laundering Act on January 23, 2025. This amendment removes NGOs and other non-profit organizations from the list of “accountable persons” under the law, significantly easing the regulatory burden.
Peter Magelah, Executive Director of the Development Network of Indigenous Voluntary Associations (DENIVA), welcomed the move. “For years, NGOs faced financially and administratively burdensome regulatory requirements. This amendment gives NGOs greater flexibility to focus on their core missions,” he said.
Yona Wanjala, Executive Director of Civil Advisory HUB, also praised the amendment, noting that it fosters a more enabling environment for civil society organizations. “The previous framework hindered NGOs’ ability to contribute meaningfully to Uganda’s development. This change reduces unnecessary scrutiny while maintaining necessary safeguards,” Wanjala said.
The revised law adopts a risk-based approach to combating terrorism financing, targeting organizations identified as vulnerable through comprehensive risk assessments.
Despite the challenges posed by the US aid freeze, the regulatory changes offer a glimmer of hope for Uganda’s NGO sector. These adjustments aim to create a balanced framework that mitigates risks while allowing NGOs to continue their vital work.
Stakeholders remain optimistic that strengthened collaboration between the government and NGOs, along with innovative funding solutions, will help the sector weather this turbulent period and sustain its contributions to Uganda’s development.
