Political Party Financing in Uganda

By

John Ssenkumba
Senior Researcher
Center for Basic Research, Kampala

This paper should not be understood and reported as representing the views
of the FES.
The views expressed in this working paper are those of the author, and do not
necessarily represent those of the FES. This paper describes a research
conducted by the author and has been prepared to is elicit comments and to
further the debate on Political Party Financing in Uganda
Rationale, Scope and Essence and Methodology of the Research

In the recent past, the vibrant Ugandan press and media have been awash with reports
about the diverse difficulties political parties, both the incumbent and the opposition,
have been facing in respect of financing. Much as these reports cannot be taken as the
spark that lit the public debate over political party financing, they have done much to fuel
and catalyse the public discussion of this issue, and its central and strategic significance
in the young and still fragile multi party dispensation, established just before the 2006
Presidential and Parliamentary elections. To facilitate a meaningful dialogue among the
diverse stakeholders on this issue, would, at the very minimum require two things: one, a
neutral forum with a less politically charged atmosphere, and two, a basic working
document outlining the main issues that need to be discussed and resolved.

The original working paper was therefore not a very academic document in the
conventional sense of methodological rigour and conceptual analysis. It was outside its
scope to explore what political parties are, and whether they are essential and
indispensable. Neither was it targeting a thorough review the history of political parties in
Uganda. There was no implicit or explicit assumption that finances are the only, or, for
that matter, the main problem, parties in Uganda are facing currently. Given the time and
resource constraints, the coverage of the survey was initially limited to residents of
Kampala city, whose views and opinions may not fully represent the entire public opinion
of Ugandans on various matters.

Also, the paper was specifically focused on financing, as opposed to funding and support
that are broader and may include non-monetary aspects. Rather, the modest goal of the
paper was to flesh out the key issues, as well as the views of the various stakeholders on
these issues. Also, there is no attempt in the paper to undertake a comparative with
experiences of other countries, both in Africa and beyond. But in the light of the lively
deliberations that took place, the realization that an effort needs to be made to address the
above concerns has been acknowledged, and if and when resources permit, they will be
addressed in due course. Other comments raised in the consultative workshop have been
taken into account in this revised version, and more consultations and dialogue will be
done, to expand on the scope of stakeholders that make an input into it.

Three methods were used to collect the information used in this report. A questionnaire
was used to conduct a survey of public views from 200 randomly selected individuals in
Kampala. From each of the five administrative Divisions of Kampala City Council, 40
respondents were selected to represent each of the socio-economic clusters, and the main
political affiliations. Secondly, Key Informant Interviews were used to collect
information from leaders and spokespersons of political parties. Thirdly, two Focus
Group Discussions were conducted to get perceptions of various interest groups. These
targeted the elite, and were held with students and lecturers in Makerere and Kyambogo
Universities.

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Introduction

The year 1990 marked the onset of the democratisation process in Africa, a shift from a
political past of one-party systems and military regimes, and that promised to bring free
and pluralistic elections in the continent. Whatever the flaws, the development of
democracy that has taken place throughout has contributed significantly to the
consolidation of civil and political liberties in Africa. As a result of this evolution, the
role of political parties has gained critical relevance for the functioning of democracy.
Within this context, consolidation of electoral contest has been recognised as one of the
greatest challenges to the functioning and stability of democracy. Thus, the strengthening
of political parties and the institutionalisation of party systems that adequately embody
and represent the aspirations and interests of citizens has emerged as an unavoidable
priority.

At the same time, the organisation and day to day functioning of a political party and its
participation in elections have been recognised as activities that demand having sufficient
financial resources, thereby creating an unavoidable link between money, political
parties, and election campaigns. This relationship, in itself essential for the quality of
democracy, has created concern over the past few years, as it became evident that money
flows from private sources has often compromised the autonomy of political parties and
authorities in the performance of their duties. Similarly, the issue of public funding has
brought about a broad discussion as to its advantages and limitations.

The combination of these elements has encouraged various actors to devise and
implement mechanisms intended to ensure greater equity and transparency in the funding
of political parties and election campaigns. In this regard, and based on a shared premise
that political funding is today a major challenge to the health and quality of democracy,
Friedrich Ebert Stiftung, Uganda office considered it important to undertake a survey on
the core issues surrounding this question. This discussion paper seeks to outline the key
issues in political party financing in Uganda, giving both the public and corporate
perspectives of those parties that participated in the 2006 elections on these issues.

Today, the funding of political process in Uganda is a burning issue both for the national
Actors, and for their partners in the democratic development of the country, for the
consolidation of democracy requires, as a precondition, the enhancement of the capacities
of the political actors for action which can only be achieved by an equitable allocation of
public resources among the actors. This is largely because the electoral playing field is
more often than not, skewed in favour of the party in power due to the fact that it controls
the human, material resources of the state, including the media and the press (which are
so necessary during election time). Also the incumbent party in power may interfere with
the private media which exists. As a consequence, the funding structure of parties is
definitely biased in favour of the incumbent party, because of the absence of separation
between the State and the party in power.

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In such a context, it is very hard for the opposition to portray itself, and to function as, a
countervailing power or a viable alternative to the incumbent power. As a consequence,
an increase in the resources of opposition would help to create a balance of political
forces likely to improve the structure of competition between political actors.

Presently, the change from the Movement system to multipartism still faces several
challenges, which include: inability of new parties to survive over time; difficulty in
establishing a network of durable structures across the national territory; lack of adequate
resources; and incapacity to develop a comprehensive vision of the political situation.

It is therefore no surprise that, the issue of political funding has increasingly caught the
attention of politicians, electoral authorities, scholars, and civil society representatives,
under the premise that the conditions for the establishment, stability, and functioning of
democracy depend, to a great extent, on a fair access to and allocation of resources for
political parties, and on the transparency with which such funds are managed. The
obligation to keep political parties permanently operating and dealing with expensive
election campaigns created the need to raise large sums of money, thereby making the
political system more vulnerable to practices such as illegal funding, influence-peddling,
and in some cases penetration of money from illegal sources.

This makes it essential to have an effective legal framework for the funding of political
parties and election campaigns. Below are five reasons why this is so:

First, an effective legal framework helps avoid abuse and influence peddling in political
parties by interest groups or wealthy individuals, and thus contributes towards rebuilding
public confidence in politics. It is not a coincidence that public demand for fair play in
politics has motivated regulatory initiatives.

The second reason is to help create a leveled playing field for inter-party competition.
Fair competition, it has been noted, is fundamental to multiparty democracy. Legislation
on the funding of political parties and election campaigns may help bring balance to the
conditions for competition, and make it easier for new parties to enter the political arena,
while at the same time reducing the pressure exerted on existing parties by corporate or
other wealthy groups active in the political sphere. Facilitating equal access to the media,
particularly television, is another appropriate mechanism to promote equity.

Third reason for an effective legal framework is to empower voters, through rules on
disclosure, providing them with the facts they need in order to make informed decisions
on election day. By giving voters the possibility of effective sanctions, the system will
promote good conduct on the part of political parties and candidates.

Fourth, political parties need to be strengthened and their development encouraged so

that they can become responsible actors in supporting sustainable and effective
democracy.

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This places the regulation of political funding in the broader context of constitutional and
statutory provisions concerning political parties, and certainly in the context of general
thinking about the role of parties in democracy, including the relationship among party
leaders, candidates, party members and citizens.

The fifth reason an effective legal framework is essential is to ensure a ‘minimum of

reasonability’ in the use of public resources for political finance purposes. This is
particularly relevant in light of the severe fiscal crises affecting the Uganda.

There are three basic problems that regulation of political finance needs to address:
• the autonomy of political parties,
• transparency in the use of all of the parties’ financial resources,
• enforcement of the relevant regulations.

Several options are possible:

1. The Autonomy Option emphasizes the freedom and private nature of political parties
and minimizes the need for regulation, relying largely on self-regulation and the self-
correcting mechanisms of inter-party competition.

2. The Transparency Option stresses the importance of public access to information

related to party finances, so that voters will embrace their responsibilities and their
freedom, and make an informed choice on Election Day.

3. The Advocacy Option provides for a set of detailed regulations on party finances, and
entrusts their verification and implementation to an independent state agency.

4. The Diversified Regulation Option, is an amalgam, and combines ‘benign neglect,

precise regulation, public incentives, and occasional sanctions’

2. The concept of political finance

While funding of political parties is intrinsically understood to be crucial, it nevertheless
is an ambiguous concept. With political funding we mean: the way that political parties
and individual candidates running for political office raise funds for election campaigns
and, in the case of political parties, for maintaining themselves as organisations.

Political finance is a complex political phenomenon to understand. The topic itself is not
very transparent. Even in countries that in general have great openness with regard to
information from official and private sources, information about political finance is
incomplete, across parties and across time, and it is hard to specify the impact of finance
on political outcomes, for instance for election results.

In spite of the problems in estimating the precise impact of political finance there is little
doubt that the actors themselves, parties and candidates, believe it is important.

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The very fact that such information is not easily available proves that it is considered
important. Moreover, in most countries there is an acknowledged need to have some kind
of regulation of political finance.

Total absence of regulation, it is feared, will lead parties and candidates to be controlled
by important donors. We can distinguish between four sources of political finance that in
general are considered legitimate, although all of these forms may not be permitted in all
countries:
a) resources mobilised by the political parties themselves, such as membership
b) fees, taxes on representatives, income from property, publications and
c) subsidiaries controlled by the party,
d) contributions from individuals,
e) contributions from collective actors; such as by unions and other
f) organizations and corporations etc, and
g) subsidies from the state or other tiers of government.

Political Barometer: Key Aspects that Affect Parties and resource mobilization

A mini survey was conducted to get an overview of those factors that may have a bearing
on party membership and their capacity to mobilize resources.

Active Political Participation

Politics is still largely an elite activity, with less grassroot engagement. True, most of the
people we met identified with some political party, but a far lower percentage of
respondents (26 percent) than those that identified with political parties describe
themselves as card-holding members of political parties. It also suggests that
identification with a political party scarcely translates into actual membership of that
party, suggesting a weaker degree of commitment to that party. This also confirms severe
limitations on the ability of political parties in terms of collecting membership dues,
which in turn increases reliance on alternative sources of funding.

The survey also found that apart from attending political rallies most Ugandans interact
with political parties of their choice only minimally. For instance, only 16 percent of
respondents reported ever attending party meetings apart from party rallies.

Knowledge and Relevance of Political Parties

It is postulated that there will be greater popular support for financing of political parties
if citizens are knowledgeable about the role of political parties and their relevance to the
democratic process. For this reason respondents were asked their opinions about the
functions of political parties and their assessment of the overall performance of political
parties. Survey respondents were asked what they thought was the most important
function of political parties.

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On an ascending ranking scale of 1 to 7, where 1 is the least important and 7 the most
important, respondents were asked to rank seven core functions of political parties. Public
education was ranked by 22 percent of respondents as the most important function of
political parties. Mobilizing membership support followed this as the next most important
function of political parties, ranked by 20 percent of respondents. It can reliably be
concluded from the data that many Ugandans are not aware of the other actual core
functions of political parties and the important role they play in the democratic process,
which includes providing alternative government, providing leadership, providing policy
alternatives, and participate in shaping the political will of the people. It seems that
Ugandans believe that political parties do in principle play an important role in the
country’s democracy, but have a limited idea, or at least a different interpretation, of what
that role might involve in practice.

Problems Facing Political Parties

Respondents were asked to rank six identified problems faced by political parties in
Uganda from the most pressing to the least pressing problems. On a scale of 1 to 6, where
6 is the most pressing and 1 the least pressing, lack of adequate funding was rated as the
most important problem by 51 percent of respondents. Corruption was ranked next on the
scale by 47 percent of respondents, internal party conflict followed at 32 percent and lack
of adequate personnel was selected by 28 percent.

Party Financing
The survey included an extended set of questions to gauge perceptions on the current
system of funding political parties, and to monitor opinion on the issue of financial
support from the state. Broadly, this revealed a small majority in favor of the principle of
state financing of political parties. However, this support appears fragile upon further
questioning: state financing is perceived neither as the best answer to parties’ funding
problems, nor as an adequate means of leveling the financial playing field for parties.
There is significant opposition both to raising extra taxes to support such policy, and to
diverting resources away from public services to meet this extra financial requirement.

While the principle of state financing of parties finds some support, this is far from
unambiguous when it comes to the details of the proposal.

Are sources of funding for political parties adequate?

Once again, there is a widespread perception that financing difficulties represent a
significant barrier to the effective operation of political parties in Uganda. Almost two-
thirds of respondents (61 percent) either agree or agree strongly that political parties in
Uganda are weak because they lack financial resources. An even higher proportion (70
percent) said that political parties would perform their roles more effectively if they had
sufficient resources. There is a widespread feeling that political parties are suffering from
a lack of financial resources which hampers their ability to perform their democratic
role. However, almost half the survey respondents (46 percent) describe funding sources
to political parties as “very adequate”, “adequate” or “just adequate”.

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Over a third of respondents (35 percent) said existing funding arrangements were “not
adequate”. This indicates that party financing difficulties may be attributable to bad
financial management and/or the general economic hardships as well as to problems
within the funding system itself.

What are the current sources of funding for political parties?

Questioning about sources of party funding revealed varying levels of knowledge.
Interviewees were asked to rank 11 sources of party funding according to their perceived
importance. Around a third of respondents claimed no knowledge of sources of party
finance, suggesting a lack of transparency and accountability on the part of the parties
and their executives. Among the rest, overwhelmingly, the most widely cited source of
funding was from the “personal funds of party leaders”, which 49 percent listed among
the three most important income streams. Political parties are still widely perceived, it
seems, as extensions of their leaders’ own personalities, and responsibilities. In this light,
it is unsurprising that the persistence of corrupt practices is blamed more on the pressure
for political leaders to personally finance their parties than on problems in the broader
political system (although this in itself denotes a problem in the political system).

Some 38 percent of respondents believed that “membership dues” were one of the three
most important sources of party income, despite the earlier finding that party membership
is proportionately low and that this income stream may prove unreliable and
unsustainable in the long-term. The third most popular response, given by 26 percent,
was income from “private individuals”: this provides important context to the later
questions on the need to regulate the size of such private contributions.

Conversely, the survey showed that few respondents believe that political parties receive
significant income from “anonymous donations” (listed among the bottom three
categories by 31 percent of interviewees), showing what may be overconfidence in the
transparency of party accounting. 26 percent listed “public funds” among the bottom
three current sources of funding.

What should the sources for funding of political parties be?

Opinion on where party funding should come from is equally revealing. Asked to select
one option from the same list of 11 possible income sources, the most popular response
(given by 21 percent of respondents) is that parties should draw finance from the personal
funds of their leaders. Here again, parties are seen primarily as the instruments of their
key figures. Whilst some focus group participants were of the opinion that funds should
come from the leadership of the political parties, given that they stand to benefit or gain
when the parties come to power, they also raised concerns that this could lead to
corruption and that a few individuals could hijack the party.

The unsuitability of this source of funding was raised when the question was posed as to
what happens to the party when such few individuals decide to leave the party or when
their funding is not forthcoming?

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“Membership dues” were the second most popular option for party funding, selected by
15 percent of respondents. Focus group participants also identified membership dues as
another important source of funding for political parties. However they noted that it has
been difficult utilising this source since most of the population identifying with political
parties are not registered members, and do not pay membership dues.
It was agreed that there is a need for parties to conduct membership drives, and to
encourage the general populace to belong to and contribute to the running of their parties.
(It is also noted that parties need to structure their organization so that members at all
levels can have a say and contribute). The example was mentioned of some countries
where party youth go round throughout the year educating people on party beliefs and
trying to convince people to join their party upon making a token payment.

Parties “own sources” (11 percent), “loans” (9 percent) and “foreign sources” (9 percent)
were also rated as sources of funding.

In the same question, “public funds” was only the sixth most popular response, given by
just 8 percent of respondents. This is despite the support found elsewhere in the survey
for the principle of state financing of parties. While interviewees are prepared to voice
support for state financing in principle, it is by no means seen as the best or only answer
to party financing problems, and people do not support a reduction in spending on social
sectors to support funding of political parties. Respondents seem more inclined to believe
that parties themselves should address the lack of funds through personal intervention by
leaders, or by more aggressive fundraising, before turning to public resources.

Another possible source of funding arising from the focus group discussions was that
there should be a Political Party Development Trust Fund, for people and institutions to
donate into. According to this view there is a lot of popular support by Ugandans for
politics and political parties so people will voluntarily donate into it.

Some participants from the focus group discussions also agreed that the political parties
could be encouraged to enter into income generating activities, for instance agricultural
ventures. The state could provide logistical support for the political parties to undertake
such fund raising activities. Others disagreed with this suggestion and noted that the
priority should be for parties to be assisted to develop strong democratic structures.

Why Individuals Donate to Political Parties

When respondents were asked to mention three reasons from a list of 9 reasons provided
in the questionnaire as to why people donate to political parties, personal favors came out
as the highest rated reason (54 percent). The second most rated reason, to win
government contracts, was mentioned by 31 percent of respondents. Political office (17
percent) came out as the third reason why people donate to political parties. This seems to
suggest that there is a perception by the public that people give funds to political parties
more generally for reasons of direct personal gain than of ideological conviction, which
may have been reinforced by allegations of political corruption over the years.

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Party Financing Legislation
The survey included a number of questions about existing party financing legislation.
Respondents were asked whether the current law should be maintained so that ceiling is
maintained on contributions, in cash or in kind, to the funds of a political party from
outside Uganda. Just over half (56 percent) say that the law should be maintained as it is,
but almost 40 percent disagree. This may confirm the knowledge that political parties in
Uganda receive some support from foreign sources including Ugandans resident abroad
despite the law.

This view corresponds to a number of earlier responses: for example, the finding that
foreign sources are the fourth most commonly cited potential source of party income. A
degree of conservatism may affect direct questions about whether the law should be
altered. There seems, though, to be a general recognition that donations from overseas
could provide a substantial and valuable contribution to party financing, despite the
awareness that such sources bring additional problems. Focus group discussants also
agreed that funding should be sought from external sources. They noted however that
since the existing political parties’ law puts a ceiling on direct foreign funding, any funds
sought from foreign sources could be channeled to an independent body for distribution
to all the political parties.

Some focus group participants were of the opinion that developed democracies are
willing to provide funding to ‘developing’ democracies to help in the promotion of
democratic processes, and that this is a possible source of funding. Funding of this type is
aimed at democratic institutions, such as Parliament and political parties.

The response was clearer on the issue of a ceiling on individual contributions. Asked
whether they agreed with the none existence of a ceiling as to how much citizens can
contribute, a clear majority of 72 percent said they agreed with it, with only 20 percent
expressing disagreement.

As suggested before, this needs to be seen in the context of the finding that private
contributions are not seen as a particularly suitable source of party financing: only 5
percent of respondents said that private individuals should be a major source of funding,
compared to the 21 percent who said that leaders’ personal funds should be used. If
respondents do not believe that private contributions should be a major factor in party
financing, then they may not perceive any need for new legislation to regulate this
income stream, and to set ceilings on donations.

Opinion on State Funding of Political Parties

There is a slight majority in favor of state funding for political parties, according to the
survey. However, support is neither universal nor unconditional. Any such policy would
be likely to face significant opposition from those who are unwilling to see existing
public funds diverted to political parties, or tax levels raised; and from those who believe
that state financing is not a solution to the under funding problems of parties nor to the
corrupt practices which plague the system.

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In response to a simple “yes/no” question about support for state funding of political
parties, the sample divided into a 53 percent “yes” and a 43 percent “no” group.
Respondents were asked to give reasons for their answer to this question.
Among those who said yes the following reasons were given: improve efficiency of
political parties, 17 percent, and reduce party corruption, 9 percent.

Most of those who said no alluded to some of the following reasons: 21 percent that the
national economy is not ready to support political parties, probably in the face of
increasing demand for social services; 18 percent were of the opinion that it is only right
that parties fund themselves; 9 percent responded that state funds be spent on more
important issues.

3.8.1 What type of funding should be provided to political parties?

Further questions probed opinion about the details of any state financing policy. Cash-
only support was endorsed by just 19 percent of respondents; over a third (34 percent)
preferred support in kind, with a similar proportion (35 percent) endorsing both types of
support provided in parallel. The focus group discussion was divided as to what to
finance. Some favored financing the recurrent expenditure of the parties such as rent,
utility bills, transport costs, salaries and training for party office staff, noting that all
parties need support to conduct their activities throughout the course of the year in all
parts of the country. Capacity building was cited as an important area that requires
funding.

It was stated that parties must be helped by way of capacity building at their regional,
constituency and even zonal level to enable them to harness human and other resources to
develop the parties. Others favored funding only for public education, and for creating
equal platforms and opportunities for the parties to get their message across to the
electorate. Other focus group participants were of the view that political party funding
must be looked at in the context of the existing political party law. The mandatory
demands in the political parties laws must be supported with funds from the state, since it
is the latter that makes the demands. To this end, support should be given for political
parties to maintain offices in the constituencies for example.

Contrary to this some focus group participants felt that all political parties have certain
responsibilities which should not be pushed on to the state, and the requirement to have
party offices in over half of the country was one such case mentioned. It was then felt that
once the parties had met their obligations then the State should assist with all that is left.

Adding to this, the focus group demanded greater accountability and transparency from
political parties before any considerations on funding could be completed. It was
suggested at the focus group discussion that an independent body should establish the
areas of need of the political parties that require funding, to be done in conjunction with
the political parties.

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The issue of funding for party agents for elections was also raised at the focus group
discussions. Asked whether the parties would trust their party agents to do their jobs
properly if they are to be paid by the government, the response was yes. According to a
participant, funding assistance should include training and per diem for the agents.
Parties may add something to what the state gives but at least there must be some basic
per diem for them. It was felt that this would go a long way to help avoid conflicts as has
happened in some countries. The agents must be trained for instance by the EC so that
there is uniformity.

Where could state funds be sourced from?

The generation of public funds to support political parties is a key issue. One option
would be to raise extra funds through taxation. In total, 45 percent of respondents
believed that this would be the best way to fund the policy, either through indirect taxes
(23 percent), direct taxes (13 percent) or various special levies (9 percent). However,
asked whether they would in practice be willing to pay extra taxes to finance political
parties, 64 percent of the survey respondents said that they would find this unacceptable,
compared to just 29 percent who would welcome the proposal.

Taxes were increasingly mentioned by focus group participants as the most dependable
means of raising funds to support political parties. It was felt that state funding for
political parties should be raised from taxes because the people would be the ultimate
beneficiaries, and thus they should contribute. Some opposition to this proposal was
raised and it was noted that Uganda is a country where only a few people pay tax i.e.
those in the formal sector, and thus it was argued that increasing taxes would put an
undue burden on tax payers. Some participants contended that Government should find a
way of increasing indirect taxes, without necessarily making it known to the general
public that it is meant to fund political parties. Members in the group expressed the view
that a good public education campaign on the need for such taxes would increase public
support.

Asked whether members of the focus group would be prepared to pay such taxes, the
answer was “certainly”, which differs from the finding of the survey where the majority
of respondents said they would not be prepared to pay extra taxes to fund political parties.
An alternative option would be to redirect existing public resources into political party
financing. 29 percent of interviewees endorsed this as the best means to fund political
party activity in Uganda. However, this too proves a fragile body of support: given a list
of potential public spending areas, political party financing is given priority by only 5
percent of the survey. Education (32 percent), health services (30 percent), agricultural
subsidies (17 percent) and water supply (14 percent) are, perhaps predictably, given
greater weight by respondents. Some focus group participants concluded that if the state
were to fund political parties funding would come from the consolidated fund, leading to
a reduction of funds for social sectors, e.g., education, health, etc. They felt that this was
not appropriate, and would send the wrong message to the general populace. They did,
however, support the provision of logistical support from the state, for instance free
advertisement and airtime on state owned radio and television.

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Other options for state funding attract even more limited support: just 5 percent would
endorse further government borrowing to underpin the policy, for example. Notably, 19
percent of interviewees simply did not know where such funds could come from.
The financing problem would be a serious issue in any policy decision: it is far from clear
where extra funds could be raised without incurring significant opposition. From the
public’s point of view, support in principle for state financing of political parties does not
seem to include a willingness to prioritize such a policy above preferences either for
lower taxation or for better-funded public services.

State Funds Disbursement Formulas

Questions followed about the disbursement of funds to parties. Several options were
perceived as possible means to determine the level of state support for parties. Almost
half of respondents (47 percent) said that the most appropriate factor should be the
number of total votes won by each party in the last election. Other options for
disbursement also found significant support, with little differentiation – the number of
regional party offices (32 percent), the number of Parliamentary seats won (27 percent),
and state matching of a percentage of the party’s own contributions (27 percent).

Support for extending state support to independent candidates is limited at just 30 percent
of respondents, compared to 59 percent who would oppose such a move. Respondents
clearly believe that levels of state funding should be tied to the existing size and
popularity of parties, whichever technique of measurement is used to decide this. This
needs to be set against the oft-repeated argument that state financing would not be a tool
for “leveling the playing field” for political parties in Uganda since larger parties could
actually have their advantage reinforced by a financing system that operates in this way.

When the question, How should the fund be distributed?, was posed at the focus group
discussions, participants agreed that a formula for disbursement should be put in place. It
was agreed that there should also be clearly defined criteria applicable to all parties to
determine which political parties qualify to have access to the fund.

Some factors that were suggested to be taken into consideration in developing the
formula were: the number of seats a particular political party has in parliament, the total
vote a party obtained in the last general election, the number of functioning regional party
offices, and the number of years a particular political party has been in existence. As to
who determines the formula it was generally agreed that whatever the formula it should
be devised through parliamentary agreement and approval. However, some were of the
opinion that the party with the majority in parliament could twist the development of the
formula and weigh it to their favour. Others argued that since a majority in parliament is
not a preserve of any one political party, it would not be much of a problem.

Should independent candidates receive funding?

Some focus group participants were of the view that independent parliamentary
candidates should be funded, but not independent presidential candidates. Their reasons
being that the independent presidential candidate does not have any party offices to
maintain and should he win power he would have no parliamentarians to form his

12
cabinet, and would end up choosing his cabinet from the existing political parties. Also, if
such candidates are allowed to access the fund, it could lead to a proliferation of
independent candidates.

Other participants were of the view that independent presidential candidates should be
allowed to access the fund since they would need to go around the country campaigning
to sell their views. In addition, if an independent presidential candidate qualifies by the
criteria set up for accessing the fund, then just like the independent parliamentary
candidates, he or she must be allowed to access the fund.

When to Disburse State Funds?

The survey also addressed the issue of when to disburse funds to political parties. The
responses indicate an emphasis on funding for election campaigning above the day-to-
day logistics of party operations. Over half of all interviewees (51 percent) think that all
funding should be provided in election years, with only a quarter (25 percent) opting for
an annual disbursement, which could provide a smoother flow of funds for ongoing
activities. A smaller percentage (19 percent) was however of the view that funds should
be provided immediately after general elections, presumably so that funding can better
reflect the results of the ballot.

At the focus group discussions, some argued that political parties are expected to perform
throughout the year, and thus funding should be disbursed yearly. Others thought that
political parties would be able to build their structures and develop properly if the
funding was geared towards capacity building and released quarterly. Yet others thought
that distributing the funds every two years would be sufficient.

Who should be in charge of the funds?

Should the state decide to finance political parties, the survey suggests that the Electoral
Commission would be the favored body to oversee disbursement of the funds. 32 percent
of respondents nominate the EC; this compares to 18 percent who would endorse
oversight by Parliament.

The focus group forum generally agreed that the EC should be in charge of any funds for
political parties. It was however noted that there is the need to find out whether the EC
would be able to add this additional responsibility to its existing responsibilities. The
forum concluded that the EC would have to be given the additional capacity to manage
the funds if necessary.

Only a few members mentioned the setting up of an independent organization to manage

funds for political parties. The advocates of such a new body elaborated on this
preference, stating that legislation would establish this body and give it
independence/neutrality. They argued that the EC is already burdened and care must be
taken so that its credibility is not marred.

13
Concluding this section, there is a slight majority in favor of the principle of state
financing of parties. However, this is only a narrow majority, and support is fragile. State
financing is not broadly seen as the best remedy to the under funding of parties, nor
unambiguously as a way to level the playing field. Support is qualified by reluctance to
countenance increased taxation, or to divert funding away from public services.
3.12 Perception of Corruption in Political Parties
It is necessary, then, to turn to the argument that state financing of parties would be a
valuable anticorruption instrument. In this context, the survey found a widespread belief
that the provision of state funds to political parties would bring with it strict requirements
for fiscal transparency. An overwhelming 87 percent of respondents agreed that there
should be “regular and thorough auditing of parties” once they receive public funds, with
only 8 percent maintaining that parties should be able to keep their accounts secret
despite the injection of public money. Whether this requirement for transparency would
add significantly to the fight against corruption, though, was less clear: this is examined
in the following section of the survey.

The study asked questions of respondents to determine perceptions of the level of

corruption in politics, opinions about its relationship to the structures of party funding,
and the extent to which state funding of parties could be seen as an instrument in
addressing this problem. Broadly, it found that while corruption is indeed seen as a
serious problem, its perceived causes are such that state financing of parties may not in
fact be the most appropriate way to achieve its reduction. Consequently, the
anticorruption argument is also unlikely to be a universally successful way to solicit
support for the use of public money to finance political parties.

The survey found that a large majority of respondents believe corruption to be a problem
within political parties. Asked a simple question about whether corruption exists in
political party organization, 80 percent of respondents agree that it does, against only 9
percent who believe that it does not. We might expect that this would significantly affect
feelings about politics in general; indeed, the survey finds that an even larger proportion,
85 percent of respondents, believe that citizens’ attitudes to politics are affected by the
level of corruption within parties. It appears that even some respondents who do not see
corruption as a problem in itself recognize the damaging effects that perceptions of
corruption have had on the political process.

When respondents were asked to mention types of political corruption, unfair business
(42 percent) and kickbacks (40 percent) were cited as the greatest manifestation of
political corruption in the country. Political appointments and extortion followed next on
the scale, mentioned by 39 percent and 27 percent of respondents respectively.

Respondents increasingly mentioned unscrupulous politicians, 42 percent of respondents

said that they are the main cause of political corruption in Uganda. This actually raises a
question as to the caliber of people who enter into active politics in Uganda and whether
corruption is synonymous with the practice of politics in the country. It also suggests a
public perception that corruption is more a product of individual misbehavior than of
systemic problems: as later findings confirm, this suggests that changes to the funding

14
system would have a limited impact on levels of corruption. Non-transparency of
political party finance activity was cited by 29 percent of respondents as the possible
cause of political corruption in Uganda. Lack of effective censorship by the appropriate
agencies was also mentioned by 27 percent of respondents and inadequate legal
provisions by 10 percent of respondents.

Do donations influence political decisions?

A majority of respondents (68 percent) believe that donations by individuals to political
parties have some effect or influence on political decisions and on public policy. This
may appear unsurprising: it is not uncommon in a democracy (though it may not be
particularly desirable) for major party benefactors to expect that their voices should be
heard in party decision-making.

Of more interest may be the 27 percent who believe that individual donors have no
impact upon party policy; as suggested above, this may be because they believe that
donations are more often intended to bring personal favors and contracts than political
voice, or that individual donations are simply not a significant source of party funding.

Experience of corruption in politics

Typically for a survey of this kind, far fewer respondents admitted to any direct
experience of having encountered corruption in politics than professed an awareness of
the existence of the problem. Just 9 percent said that they had been offered money, or
anything in kind, to vote for a political party (just over 5 percent were unwilling to
answer the question, while 84 percent denied having encountered such an offer). Again,
the extent to which this low figure is attributable to a reluctance to admit personal
involvement in any form of corruption must be left to judgment; however, the high
proportion of respondents who lacked any informed opinion on the types of corruption
prevalent in parties does support a view that the perception of corruption is based as
much on hear-say and media reports as on personal experience.

Of those who did claim to having been offered money or other incentives to vote, a
significant proportion (over a third of those who answered the question) admitted to
letting the offer influence their behavior. A similar proportion, 31 percent of all
respondents in the survey, said that they would take a hypothetical cash or kind offer to
vote for a particular candidate or party. The fact that such a high proportion admit that
their vote is open to material influence may seem surprising; it does suggest that the
extent to which respondents minimize their own experience of corruption should not be
exaggerated.

Party Funding and its Effects on Corruption

The survey sought to gauge opinion about the extent to which reforming party financing
structures would have an effect on corruption in political parties. While there is strong
support for increasing measures of transparency in principle, the view is widespread that
corruption is so entrenched in politicians themselves that the problem will not be
significantly affected by such reforms.

15
On issues of transparency in party finance, the survey finds a fairly consistent split
between a majority of 80 percent who feel that fiscal transparency is an important
obligation for political parties, and a minority of 20 percent who see it as a less necessary
goal. 79 percent of respondents agree that it is important to know the major source of
funding for political parties; 17 percent disagree. Similarly, 81 percent believe that
political parties and politicians should fully disclose to the public sources of funding,
compared to 17 percent who say such disclosure is unnecessary.

Demand for parties’ financial transparency remains remarkably consistent whether it

refers to income or expenditure. 78 percent agree that parties and politicians should fully
disclose amounts of funds received, while 79 percent say that records of expenditure
should be fully transparent. Responses here may, it seems, be based on general support
for the principle of transparency in the public sphere, rather than on any differentiated
opinion about the relative importance of accounting for income or expenditure.

Support for full fiscal disclosure falls slightly when respondents are asked about specific
budgetary items. 74 percent agree that parties and politicians should fully disclose
allowances to party officials, while 76 percent would support disclosure of campaign
expenditure. Although support for accountability is strong, the principle of full
transparency is evidently not universally accepted; this may be a reflection of a powerful
culture of official opacity.

The survey therefore finds both a widespread perception that corruption is a real problem
in politics, and generally strong support for the principle of accountability for political
parties. As noted above, it also finds that 87 percent of respondents believe that parties
would need to be regularly and thoroughly audited if they were to be granted public funds
through any state financing program. It might therefore be expected that the survey would
find a strong presumption that providing state financing, and thus increasing
transparency, would be an important instrument in addressing the corruption problem.
However, this is not fully borne out by further questioning.

When asked simply whether respondents think that state funding will reduce political
corruption, 53 percent of interviewees believe that it will not help address the problem.
41 percent think that state funding is a useful anti-corruption tool, while 4 percent remain
undecided. This at first glance seems counterintuitive, given earlier findings: however,
further probing into respondents’ opinions reveals that perceptions of corruption rest
more on a lack of trust in individual politicians than in systemic weaknesses. Findings
here correspond roughly to the earlier question on what accounts for corruption in
politics; clearly, an individual’s belief about what causes corruption is key to their
proposed solution to the problem.

When asked to give a reason for their answer, 49 percent of survey respondents, (almost
all those who see little anti-corruption benefit in state funding of parties), said the
practices of corruption have simply become habitual among politicians. Altering the
sources of income will do little to affect these patterns of behavior.

16
Those who believe that state funding will reduce corruption are divided between the
opinion that shedding light on party accounts will itself reduce the opportunity for
corruption (14 percent of the total sample), and those who think that the extra supply of
funds will simply remove the motivation to increase income through dubious means (18
percent). It appears, then, that around half of all respondents do not believe that state
financing of political parties will address the deep-seated problems of corruption, which
they see as primarily attributable to personal habits and practices among the politicians
who determine the course taken by their parties.

Given this finding, the anti-corruption argument is unlikely to be a particularly effective

tool either in building support for a policy of using public funds for party funding, or for
persuading those who would be unwilling to pay extra taxes or divert existing budgetary
resources for this purpose.

Corporate Perspectives of parties

To complement the above broad public overview of issues surrounding financing of

political party activities, an attempt was made to secure the perspectives of the main
political parties, particularly those that participated in the 2006 presidential and
parliamentary elections. No attempt is made here to claim that there is an agreed position
within each political party on each of these issues. Rather, key political party leaders
authorised to represent the views and positions of these parties were contacted, and their
opinions can serve as a sound basis for debate of the key issues amongst the main
stakeholders in the political process. For Uganda Peoples Congress (UPC), the Assistant
Secretary General, Mr. Chris Opoka-Okumu was interviewed. Mr. Wafula Oguttu, the
Spokesperson of Forum for Democratic Change (FDC) was interviewed, while for the
Democratic Party (DP), the Secretary General, Dr. Mike Lulume Bayigga was
interviewed. The ruling National Resistance Movement Organisation (NRMO), declined
to participate as its key officials were occupied with national duties at the time the
interviews were being done.

The issues addressed in this section included the following:

• The legal framework and how it impacts on the resource mobilisation strategies of
each party
• Strategic plans, budgeting, and accountability
• Existing sources and modalities of financing parties in Uganda
• Alternative strategies and proposals for resource mobilisation

The legal framework and how it affects financing of political parties in Uganda

As of today, Uganda has 33 registered political parties. The registration of parties was
just transferred from the Registrar General to the Uganda Electoral commission barely a
year ago. Article 71 of the 1995 Constitution specifies the principles to guide and qualify
political Parties in Uganda.

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The Political Parties and Organisations Bill also regulates the functions of political
parties. There is no specific control of how much parties can spend.
It only requires parties to submit assets, liabilities and audited accounts annually, and
declare sources of income.

According to the Electoral Commission, Less than a half of the 33 parties have met their
statutory requirement to submit audited accounts. This would call for penalizing these
parties, but this has not happened as yet. This has been partly because, a distinction needs
to be made between what is legal and what is just in the way parties are handled.

By their very nature, parties are public entities, and it is in the interest of the public for
parties to be transparent and accountable. This can help in attracting support. It makes
their supervision easy, and stakeholders can monitor all developments in the parties.

Some enabling laws for parties are yet to be put in place, such as a Code of Conduct, and
the law on the Inter-Party Forum.

In the assessment of the Electoral Commission, compliance with the Political Parties and
Organisations Act is still low. Constantly chasing parties to comply is difficult, and some
parties melt away and disappear when one tries to trace them.

For this study, all the three parties emphatically asserted that the legal regime,
specifically the Political Parties Act, constrains and limits the opportunities open to
parties in terms of mobilising resources. UPC pointed out that the Act restricts the
amount of foreign funding that a party can get. It also mentioned that there are
restrictions on individuals since there is a requirement that a declaration of who has given
must be made. Also, the currency points mentioned in the Act are not clear. However,
they were quick to observe that as yet, the provisions of this Act have not been enforced
on any party so far. Even then, the restrictions linger in the minds of the party leaders and
act as a restraining factor.

UPC however agreed with the restrictions on the amount of money a party can get from
outside sources. To them, this is a universal principle meant to protect countries from the
pervasive influence peddling from big financiers who would be able to wield a lot of
power over parties, and the national destinies of entire countries. But they qualified this
restriction further, specifying that it should only apply to a single source, and not all
sources.

DP also stated that the Act constrains them. Foremost, they decried the mandatory
disclosure of the sources of funding. This is prohibitive in the sense that some funders
may prefer not to be named for fear of being witch-hunted by the incumbent regime. DP
implied that there could be a sound rationale for restricting the amount of funding a party
gets from outside, but this would be in the future and not at the moment.

FDC also pointed out that the disclosure requirement violated the anonymity that
businessmen, soldiers and other big funders would need to be safe when they give funds.

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Similarly, they stated that the ceiling of one hundred million shillings on funds from
outside the country was not realistic given the needs that parties have. For instance, this
amount is what can meet only the recurrent expenditures of FDC for one year at the
headquarters only. Interestingly FDC supported the restriction on the amount of funding
coming to a political party from outside the country. But they emphasized that this must
be agreed mutually by all parties and not be set arbitrarily by the state. One criterion that
could be used to set this would be as a percentage of the overall budget of each party
annually, and gave an example of 50%. And added that after all the donors finance more
than 50 % of the entire national budget!

Resource requirements for the effective operation of political parties in Uganda

Each of the four parties has a party headquarters. And they specified that they need rent
for the premises occupied by the headquarters, they need full-time paid staff to run their
offices. They also need to pay for utilities of telephones, water and electricity. They also
need stationery, transport, and all ordinary office requirements. A similar infrastructure is
needed at the districts at a lesser level, and also at the sub county.

Other expenses parties have to incur include transport to constituencies, sensitisation of

the people in the district, youth mobilisation seminars, and facilitating party members
who travel from districts to come to the party headquarters with transport, food and
accommodation.

One party reported legal fees in courts of law as a very significant expense they have had
to incur. Public announcements of meetings and various party events were also
mentioned as a major expenditure category.

In respect of staff, UPC has 15 people, DP has 10 staff while FDC has 5 staff. But these
were variously described as volunteers or would-be-employees.

Strategic Plans, Budgeting and Accountability

Strategic plans, budgeting and accountability are considered the main pillars of both
mobilisation and proper utilisation of resources for party activity, and this is the reason
they were given consideration in this study. Each of the parties reported having a
strategic plan. That of UPC was made in June 2006, while that of FDC was made in
August 2006. Each of the parties also reportedly made annual budgets. The process
followed varied slightly. UPC reported that the Treasurer and Secretary General are the
ones who prepare the budget. Their process involves asking each department to submit
their requirements. It is these that are synthesised into a budget. DP reported that their
annual budget is derived from the strategic plan. The party leaders are jointly involved in
making this budget, but after it is prepared, a stakeholder’s workshop is convened to
discuss and agree on its contents. For FDC it is the Treasurer and his deputy who prepare
these annual budgets, and they also ask all secretaries on the executive committee to
submit their annual department needs for the year. Fortunately for this party, the two key
officials who spearhead the budget process are trained accountants. FDC specified that its
annual budget for the headquarters currently stands at ten million Uganda shillings.

19
In terms of trends, each of the three parties reported deficits for the last two years. DP
attributed these deficits to three main factors. First are the weak or no financial structures
to mobilise resources. Secondly, the incomes of members of the party have reduced so
much that they can no longer continue to pay subscription fees. Thirdly, there has also
been some absconding from the responsibility to pay by other party members. FDC
reported that the deficits in their budgets arise from the fact that the expected incomes
most times are not realised.

Concerning accountability, FDC was unequivocal that financial records of political

parties should be open to the public, and government should have access to these
financial records. This is the only way that transparency can be invoked across the board.
It must also be noted that only FDC of all parties, reported to have submitted financial
reports to the electoral commission in the last two years.

DP, while in favour of transparency in the utilisation of party resources, did not subscribe
to the view that financial records of parties should be open to the public. Their
apprehension was that if this were to happen, the public may become more focused on the
expenditure figures, disregarding the political outcomes directly associated with those
figures. And this may derail the political process. As to the opening up of financial
records of parties to government, DP tagged this to that part of funding that a state has
advanced to parties for the running of their secretariats, and not to all other finances a
party may have used.

For UPC, financial records of a political party should be open to the public in two ways.
First of all to all the members of that particular party, and secondly to public institutions.
For example it is right to file some records with the Electoral Commission. But opening
financial records to everyone indiscriminately was deemed counter-productive, and
unnecessary. Government access to the financial records of parties was also seen as
inevitable if they are to enforce the restrictions on foreign funding to parties. But this also
was proposed to be through the electoral commission.

Existing sources of financing political parties in Uganda.

Here, an attempt was made to first get an estimate of the numerical strength of each party
as a pointer to its basic resource, the membership. Definitive answers were not given.
The reason was that this strength would be imputed from party membership cards bought
and possessed by them. Because the time parties have been allowed freedom to operate
openly, parties have not yet finalised arrangements to have detailed and up-to-date
databases of the membership of these parties. Another reason was that whereas parties
have been allowed to operate openly, the atmosphere of no-party still pervades. People
fear to openly declare their party affiliation for fear of victimisation and persecution, both
subtle and covert.

DP reported to have sold 500,000 party cards. FDC estimated its party strength at
between four to five million people. UPC said its supporters were so cowed that they
have not yet come out openly to show their affiliation.

20
For each of these three parties, they ruled out any support for the idea that party members
who contribute more to the party should by virtue of this exercise more control in the
party. UPC said: “the party will then be owned by the rich!” DP stated that: “rights under
the constitution should be the same for all members”. FDC simply said: “No!”

The next resource category considered was assets. DP stated their assets as largely office
equipment. FDC mentioned a car and office furniture, but added that they were in the
process of completing the payment for the premises that house the party headquarters.
UPC did not specify the party assets, but mentioned Militon Obote Foundation, which
owns several assets including Uganda House, a thirteen floor estate property in the city
centre.

All parties stated that their members are their main source of resources to keep the parties
running. Not only do they contribute in kind, but they also give generously of their time
and effort. For UPC the 3 main sources of resources included a contribution of the
members of parliament that belong to UPC. Each contributes 200,000 shillings from what
they earn in parliament each month. The Milton Obote Foundation funds particular
events organised by UPC. Thirdly, supporters and sympathisers in the Diaspora also
mobilise resources and contribute to the party’s cause. DP mentioned project funds from
foreign friends, sporadic fundraising events, and contributions from party leaders and
members of parliament.

It was also of interest to look at whether the party’s ideology and philosophy can stop a
party from accepting resources from particular sources. DP specified that as a centre-right
party, the resources they get from social democrats cause a lot of unease in their centre-
right friends. FDC cited specific sources that they cannot accept resources from. Al
Qaeda, racist institutions, anti-feminist foundations and anti-human rights agencies were
among these. But all those sources whose ownership is against core party principles are
not admissible. UPC took a pragmatic position, and did not specify that money from
specific sources was not welcome.

Alternative strategies for Resource Mobilisation

Before exploring other alternatives, it was critical to learn if it is possible for parties to be
entirely financed by the members from their subscriptions. DP reported that this is
possible, but difficult, judging from what the experience of fifty five years had taught this
party. FDC took a similar view, saying it is possible but difficult. UPC considered it
impossible for a party to sustain itself only from the contributions of its members.

The first option that was exclusively discussed was that of the state financing political
party activities. UPC was of the view that it is right for the state to fund political parties.
But this should not be done equally. Their reason was that equal funding would increase
inequality among the parties, largely because some of the existing 34 political parties that
are registered are pseudo-parties, created by the ruling NRM. They proposed that it is
important to agree on a definite criterion, such as the number of members of parliament
that a party has.

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FDC agreed to the government funding of political parties. First of all, they pointed out
that the ruling party has unlimited access to government funding outside the law. They
proposed that this funding should be proportional to the numerical strength of a party.
They also pointed to a need to apply strictly the qualifications of an organisation to
qualify as a political party, as a way of excluding pseudo-parties created by the ruling
party.

DP considered state funding of political parties as the right thing, which to them was long
overdue. Their proposal was that such funding should be limited to the operational costs
of each party, and that the amount should be fixed for all parties on a clear standard such
as the presence of representation in parliament.

The second option considered was that of parties engaging in business to get profits to
finance their activities. UPC was of the view that it is wrong for parties to engage in
business, because this would detract from their original mission that is primarily political,
rather than economic. Instead they proposed that what a party can do is to invest in stocks
and shares of companies. Another option was for parties to have an endowment fund
which would free parties to concentrate on their political mandate. At worst, parties may
create subsidiaries that are charged with their business interests, so that they are left free
to discharge their political mission. They observed that their fundamental objection to
parties engaging in business was mainly because if they were to do so, the temptation of a
party in government to divert state resources to invest in their businesses would be high.

DP was of the opinion that income-generating activities would cause disharmony in

parties, and would divert leaders from their political goals to making money. Most
importantly, if a ruling party engaged in business, there would be ample opportunity for it
to evade taxes with impunity. The example cited was the company called DANZE which
conducted business on behalf of NRM and was discovered not to have been paying taxes
for a long time.

FDC saw nothing wrong with parties engaging in business, other than the worry that
government would frustrate the profitability of such businesses. Areas good for parties to
invest in were mentioned as import and export trade, diary farming and printing and
publishing which would enhance the parties in disseminating their messages.

Thirdly, deduction of money from members of parliament as a source of party financing

was discussed, because all the parties reported that they were benefiting from this source.
UPC pointed out that this must remain restricted to political offices, and must steer clear
of civil servants who are supposed to be apolitical.
DP looked at this matter as one specific to the policies of each party, and not as an
enforceable universal standard. FDC also supported such deductions as a legitimate
source of funding.

In the light of the common challenges faced by parties, it was important to ascertain
whether they were aware of what other parties were doing to mobilise resources, and
whether they meet and share experiences and information on this matter.

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FDC said there were no such interactions, ever since the loose grouping known as the G6
tried in vain to pressurise government to enact a law to assist national parties on this
account. UPC stated that they were aware that other parties outside government were
facing similar difficulties in resource mobilisation, and were also relying on charity and
donations. Their ideal situation was the Canadian experience where the tax-payer foots
the bill of political parties. DP pointed out that they were aware that the ruling party,
NRMO, is exclusively funded by the state, in contrast to other parties that are funded by
the contributions of their members.

In the circumstances, it was of interest to also make a glimpse at what parties had in plan
with respect to diversifying their sources of financing in the future. DP mentioned five
strategies: sale of party cards, fundraising drives, sale of party merchandise like
magazines, T-shirts and emblems, contributions from elected leaders, and, pressing for
government funding. For better financing of political parties, DP made four suggestions:
civic education should be a function discharged by the parties, and state funding for this
be channelled through political parties that are national in character, and are represented
in parliament. Secondly, there should be a waiver of taxes on materials and merchandise
destined for party activities. Thirdly, DP called for freeing the media, so that parties do
not need to spend a lot on publicity and buying out of reporters. Finally, they called upon
government not to interfere and frustrate parties once they are involved in business.

FDC had in plan the raising of money from cards of different grades, mobilising
contributions from the Diaspora, and was also targeting corporate funding from within
the country from business concerns. They strongly suggested that there must be
established a clear separation between the party and the state in the case of a ruling party,
as a way of checking the unrestricted access of a ruling party to state resources,
particularly though combining state and party functions.

For UPC, their future strategy was establishing a micro-finance outlet, investing in
stocks, and investing in publishing and printing. They proposed that government funds
those parties with a representation in parliament, modification of the restrictions to
foreign funding so that it applies to a ceiling from a single source, and the buying of
shares and stocks in companies like banks

Logically, it becomes inevitable to consider the broad context within which political
parties operate in Uganda. The social, political and economic conditions need to be
examined. Besides the challenges of resource mobilisation, parties pointed out other
limiting factors to their full and free operation. FDC stated that the biggest obstacle is the
government viewing other political parties as enemies of the state, and therefore not
listening to their ideas and taking them into account in policy formulation and
implementation. The other big challenge is the state bribing members of the parties
outside the ruling party, intimidating them, and imprisoning them on trumped-up charges.

23
DP pointed out four challenges. Repressive orders by the incumbent government, the
despondency of an intimidated population, a non-independent lop-sided media and
partisan press, and internal factionalism and parallel centres of power within parties,
partly fuelled by external sources of financing.

UPC pointed to the challenges of restrictions on parties to access the population and
explain and clarify their point of view. This belied their second challenge of the
disinformation and misconception that has arisen out of two decades of concerted NRM
propaganda against UPC, as the root cause of the national crises facing Uganda.

IMPLICATIONS AND WAY FORWARD

Conclusions
A number of conclusions can be drawn from the research, some of which raise serious
concern about the sustainability of multiparty democracy in Uganda. The following
concerns are particularly noted.

1. There are currently a number of misconceptions amongst the public about the role
andfunctions of political parties, and how parties should operate and survive
financially. There needs to be intensive public education about the roles and
functions of political parties, including the need for competitive and viable
political parties to ensure a democratic political system, and that political parties
are expected to play an important role in the democratic and good governance
process. Parties must be regarded like other democratic institutions that are
funded by the state.

2. Although there is high recognition that parties would perform more effectively if
they were well resourced, and that lack of funding is a primary problem facing
parties, state financing of parties is not widely supported by the public. In the
study the public cites personal funding by party leaderships as their preferred
source of funding the parties. This expectation is disturbing because it encourages
political corruption and control of parties by the rich.

3. There are significantly high perceptions of corruption in politics, and lack of

transparency and accountability among political parties. Also, the findings
establish that the main reason for donating to parties is for individuals to gain
personal favors, kickbacks, win government contracts, and gain political
appointment. Vote buying was also demonstrated, and almost one-third of
respondents agreed that they would take cash or goods offered to influence their
vote. Public confidence for funding needs to be built, and the perception that
politics is a moneymaking exercise needs to be eroded. Political parties need to
adhere to codes of conduct, and ensure financial transparency and accountability.

24
 4. There is consensus that the PPOA needs to be amended. The Act needs to focus
more on the external conduct pf parties, and leave the internal conduct to the party
frameworks themselves. Auditing and transparency are important and essential,
but we need to guard against them degenerating into empty rituals.

5. The two main funding needs of political parties are the recurrent expenditures at
national and district level, as well as civic and voter education.

6. The state should fund parties. But this should not be taken to mean that it should
fund them wholly, and without a clearly streamlined procedure. There are
unmistakable advantages as well as limitations involved in state funding.

7. Other funding options need to be explored by political parties. Creative

approaches to galvanising local resources through all legal means need more
consideration.

8. Ensuring accountability and transparency is not easy to guarantee by legal

restrictions and requirements alone, however many and elaborate. Civic education
to party members to demand accountability of their leaders is a possible point of
pressure.

9. Political party financing may not be the biggest, or the only challenge parties are
facing. But, without resolving it, the sustainability of multiparty democracy in
Uganda hangs in delicate and fragile balance.

10. The primary role of financing parties must lie squarely on each party’s
membership and leadership. Other sources can only came in as complementary to
fill identified gaps.

11. Internally, each party needs to institutionalize a code of conduct to set and enforce
value standards. Restrictions on external financing and conduct of parties is also
very necessary. But it requires to be agreed through consensus by all the parties,
rather than being imposed on them from without.

These areas of concern need to be seriously considered. A number of recommendations

have been made in the following section, seeking to address some of these issues.

Recommendations for Parties and other Stakeholders

Ugandan political parties enjoy a reasonable amount of popular goodwill and support
amongst the public. However, it appears that the public goodwill and support does not
run very deep. This has obvious implications for tax-payer funding for political parties.
Presumably, greater popular support and confidence would increase the willingness of the
public to support state funding of political parties.

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The prevailing situation of high levels of popular party identification, but low card-
holding membership of parties suggests weak actual commitment of Ugandans political
parties. The lack of such commitment may partially explain the weak popular support for
state funding. Parties must therefore work hard to translate the vast latent support into
actual and active support. Since the public also holds poor perceptions about the parties’
organization and conduct, internal party reforms may be one method to increase support
for parties.

In order to create the necessary environment for public support and confidence for state
funding it is recommended that the political parties team up with appropriate public and
civic bodies to educate the public on the actual functions and roles of political parties (as
opposed to the currently perceived functions). It is important that the public recognize
that competitive and viable political parties are key players in the democratic governance
of the country, and that politics should not be seen as a moneymaking exercise. Parties
must also demonstrate high levels of transparency and accountability, and anti-corruption
measures, to enhance public confidence. There needs to be a positive shift in behaviour
and attitudes, amongst both the public and political parties.

Taking the weak public enthusiasm for direct state funding, together with the expectation
that party leaders should take responsibility for funding their respective parties, parties
must do a lot more to correct any erroneous impression that they want to get cheap and
easy money from public coffers. Parties must also endeavour, through their actions and
public education, to convince the public about efforts they are making to be self-
supporting through legitimate fund-raising. This also suggests the need for pro-active
efforts at widening their membership base.

Given the reluctance of the public to endorse the redistribution of funds from social
services towards party financing, it is also unlikely that the public would favour state
funding of parties where it entails direct trade-offs. Elites’ suggestions for raising revenue
to fund parties through additional taxation might meet significant resistance. Other
legitimate means for sourcing state financing should be explored, for example, a
controlled fund for parties that is generated through donations and contributions by the
private sector, organizations and individuals.

Since the public is sympathetic to the idea of foreign funding, it may be self-defeating to
insist on the retention of the limit of five thousand currency points in the. Modalities on
enforcing the conditions of full disclosure of source and amount, and the possible
institution of ceilings and other conditions need to be arrived at by all the parties, and not
unilaterally by the state as is the situation now. This can also clear the way for
international donors (private and multi-lateral) to contribute funds into a multi-donor
basket to support parties.

Stakeholders of Uganda’s democracy can reduce the funding handicap of opposition

parties by working actively with public and non-public anti-corruption institutions
currently monitoring and checking over-exploitation of incumbency (abuse of state
resources) and the abuse of resources in general by political parties and their officials.

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If successful, such efforts will help to equalise opportunity and access to resources vis-à-
vis the ruling party.

Rightly or wrongly, the public holds strong perceptions of high levels of corruption, and
low levels of transparency and accountability amongst political parties. The parties must
recognize these perceptions and take steps to correct them through reforming their
structures. Parties should adhere to codes of conduct and ethics, particularly during
election campaigns, and they should be held accountable for any breaches of conduct.
Parties must increase transparency in their financial affairs, and cooperate with the
Electoral Commission to enable it to undertake its audit duties. Monitoring of the parties
by the EC and civil society should be strengthened to ensure compliance with existing
laws. Strengthening financial regulations, and particularly the implementation and
enforcement of the regulations is essential.

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