Uganda's suspension of cash transfer organization's operations prompts questions of legality, forces USAID to terminate direct assistance

As a result of a Ugandan government investigation of GiveDirectly, the largest global nonprofit that provides cash transfers, the US Agency for International Development (USAID) was forced to end a US$10 million direct cash transfer program to the Ugandan people.

USAID's program, which provided cash to those who had lost income as a result of the COVID-19 crisis, was part of the national COVID-19 response. Although GiveDirectly had received cabinet-level approval, Uganda's National Bureau for NGOs opened an investigation in September 2020. It raised questions about the organization's registration, approvals, and sources of funding and expressed concerns about whether cash transfers could lead to "laziness among recipients".

However, GiveDirectly's randomized controlled trial studies with independent researchers indicated that the cash transfer programs are effective in increasing productive hours, in part due to the food security they provide.

Despite this and the US embassy's recently-issued press release stating that no irregularities had been identified, the Ugandan government's suspension of GiveDirectly required the US to permanently terminate the program.

Lawyers questioned the legality of GiveDirectly's suspension. Magelah Peter Gwayaka, a lawyer from the Chapter Four Uganda human-rights nonprofit, said that according to Ugandan law, an organization should receive a fair hearing before the high court prior to operations being canceled.

The US is Uganda's largest development and humanitarian assistance donor.

News article - Devex