Is Uganda ready to pay DRC reparation costs?
Tomorrow, the 1st of September, Uganda will have to make its first installment payment of $65 million in reparations to the Democratic Republic of Congo (DRC) following a ruling by the International Court of Justice (ICJ) in February this year.
The Hague-based Court put to rest more than two decades of legal battles between the two countries. The Ugandan government was ordered to pay its neighbor to the west a global sum of $365 million in reparations for her unlawful military intervention and destructive role in the mineral-rich Ituri region between 1998 to 2003.
The UN top court decided that the total amount due should be paid in five annual installments of $65 million beginning 1st September 2022 until 2026, and that should payment be delayed, a post‑judgment interest of 6 percent would accrue on any overdue amount on and after the day on which the installment was due.
Even though DRC had requested $11 billion, Uganda appealed in its defense that DRC’s request would ruin its economy, and therefore the ICJ ruling considerably awarded the Kinshasa government about only 3% of what they had claimed.
In the week ensuing the ICJ ruling, Ugandan State Minister of Foreign Affairs, Okello Oryem rejected the judgment in a statement that the ruling was “unfair and wrong” while defending the Uganda People’s Defense Forces (UPDF) as a very disciplined force. The above-named Ministry also claimed that the ICJ ruling was punitive to Uganda since the country was singled out despite the presence of other countries’ armed forces in Ituri during the same period.
The Foreign Affairs ministry also claimed that paying the money was not really an issue but Uganda would pursue resolving the matter diplomatically by constructively engaging with the DRC. This was the last we heard from government who have been tight-lipped about the reparations ever since.
With Uganda’s first installment payment right at the door, government’s silence and unbothered demeanor are worrisome because if this payment is not made, a 6 percent interest will amass on any unpaid amount beginning on the day on which the installment is due. And of course, all this burden eventually falls back on the already overburdened taxpayer.
Let alone the subject of interest accruement, the real question is, does government even have this reparation money anyway? The National budget presented in June this year had no mention of any funds that had been put aside for the reparation costs. With Uganda’s struggling economy, Uganda might have dug up a hole for itself.
In an interview with SecretsKnown, Mulondo Moses, an Economics journalist said government is incapable of paying these reparation costs. “Government is doing very badly and the country is in a financial crisis”, he added. According to Mr. Mulondo, for the first few months of the new 2022/23 financial year, only money for operational costs, wages, fuel, and allowances has been released and all development projects have stalled because of lack of funds.
This is a clear indication that government of Uganda cannot afford to pay the $65 million yearly installment. Attempts by SecretsKnown to reach the Ministry of Finance, Planning, and Economic Development on this matter were all futile.
Development Economist, Walakira David told SecretsKnown that Uganda should just prepare to incur the 6% interest fine on late payment because right now, the country is obviously unable to pay the reparations to DRC given the nature of the economy.
According to Walakira, “…even if government cut down on expenditure in order to pay the reparations, we still would not afford to pay the first $65 million installment.” He revealed that Uganda Revenue Authority’s (URA) tax collections for July and August cannot subsequently pay the reparations.
Mr. Walakira explained that even if government wanted to borrow money from any financial institution to pay the reparation, they would be denied because Uganda is a record defaulter in paying registration fees to these international monetary bodies.
He, however, believes that even though government has been hush-hush about the payment, they have been intentional in mending and leveraging their relationship with DRC and have made steps in resolving the matter diplomatically.
In his opinion, inviting DRC to join the East African Community as a trade block partner was intentional and maybe part of the negotiation tactics government of Uganda has implored to subdue the pressure. Another in-kind gesture and negotiation tactic Uganda has taken on is construction of the 223km road worth $333 million in the eastern DRC cities of Beni, Goma and Butembo meant to boost trade between the two countries. Also notably is the signing of the joint defense and security communiqué between DRC and Uganda to conduct joint operations against armed groups including the ADF, in Ituri, North Kivu and the bordering regions.
Dismus Nkunda, Chief Executive Officer of Atrocities Watch-Africa however disagrees that any of these interventions will pardon Uganda. He told SecretsKnown that the ICJ ruling is a final adjudication that cannot be negotiated nor appealed.
Mr. Nkunda argues that Uganda’s decision to construct roads in DRC was an economic strategy, not a negotiation ploy by government and besides construction work began in December 2021, months before the ICJ judgment was made. According to him, DRC joining EAC may be a bargaining chip but government of Uganda should not take the reparations matter lightly.
He stated that Uganda is lucky that they were given installment payments and not a one-off payment because that would have been disastrous to the country’s economy. Mr. Nkunda warned that if government chooses to ignore the payment, DRC will let the money accumulate and interest accrue until it becomes fructuous for them to demand.
Government of Uganda owes its citizens an explanation on how it plans to pay the money now that the due date is here. SecretsKnown has been running a countdown leading to the date of payment for Uganda’s first installment of $365 million to DRC in reparations and shall continue to bring you any new developments on this matter.