The efficacy of the legal and institutional framework on the utilization of loans and grants from the World Bank and IMF: a comparative analysis of Uganda and Ghana

Abstract

Bretton Wood Institutions and their member states need information on the efficacy of the legal and institutional lending frameworks put in place to ensure proper utilization of development funds in form of loans and grants released and received by developing countries. This study therefore aims at contributing to this object based on a comparative review of the legal and institutional lending frameworks of Uganda and Ghana.

Guided by the theories of regulatory enforcement, responsive regulation and public choice, this study established and concluded that both countries have a regime of laws and conventional institutions that have mechanisms in place that have ensured that externally borrowed funds (inclusive of that of BWIs) are effectively put to good use. However, attaining this milestone has not been without financial and technical assistance from BWIs. Directed by the research questions, this study also concluded that whereas to a larger extent these funds have been put to proper use, this has not been without challenges and inherent weaknesses in both countries’ legal and institutional frameworks, in areas enforcement, supervision, accountability, compliance and adherence, but majorly on part of Uganda. The study therefore recommends that the Parliaments of both countries should formulate a comprehensive Anti-corruption Policy, Public Interest Disclosure Policy, and Procurement Policy necessary to coordinate, monitor and evaluate the level performance and effectiveness of the Anti-corruption laws and institutions in a more general and sustainable manner. The mandate of both countries’ Ombudsman should widen to cover the private sector where both internally and externally borrowed funds are spent. Providing more protection to whistle blowers, who volunteer information on mismanagement of public funds either to the media or law enforcement agencies and this requires strengthening the Whistle Blowers Act(s) of both countries.

The study also recommends reviewing the existing Procurement regulatory legal and framework of Uganda in order to close the non-compliance and enforcement gaps including facilitating Parliamentary Public Accounts committees to hasten their work both at parliament and in field monitoring of loans and grant funds obtained from the World Bank and IMF, among others.