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The Uganda government was last evening left searching for alternative sources of funding following the withdrawal of support to the education sector by one of its key donors. The Dutch government announced it was withdrawing funding to a tune of nearly Shs50b (14 million Euro), citing concerns over persistent corruption, poor public financial management and poor standards.

The global financial crisis has catalyzed increasing transparency and accountability regarding public finances, say aid experts, which has helped open up disclosures on aid-giving.

Nepal's Education Minister has been removed from his post amid allegations of corruption. The bribery allegations against the Minister led to international donors suspending millions of dollars in funding for schools. He denies accepting bribes from more than 1,000 teachers to secure them jobs in the schools of their choice.

A new approach in development aid could be fuelling corruption. Western countries are testing the "budget support model", whereby funds are given directly to the government in order to reduce poverty. A report claims that up to June 2002, government expenditure was not supported by the correct documentation.