25 November 2012

Uganda: MPs Link State House to UIA's Dubious Deals

Members of Parliament say they have evidence that Uganda Investment Authority bought chunks of land for creation of industrial parks and allocated them to perceived investors basing on chits and directives from State House and senior political leaders.

An inquiry by the committee on Commissions, Statutory Authorities and State Enterprises has faulted UIA for acting like a "conduit for purchasing of land for specific individuals or persons who are connected to government officials..."

This report will be particularly embarrassing for President Museveni. He once criticized former President Godfrey Binaisa, saying he had made State House a clearing house for chits. According to the committee report, "Whereas the Government through UIA has acquired chunks of land for the creation of Industrial Parks, there's no policy or laws guiding the process. This scenario has left the UIA in a situation of using chits and directives from senior political leaders as a basis for purchase as well as allocating the land."

The committee's findings, which follow the Auditor General's report into UIA's activities for the years 2002 to 2008, cite the dubious acquisition of 150 hectares of land in Kashaari, Mbarara for industrial purposes. MPs observe that the land which cost 488 million shillings was not acquired properly from a one Taremwa. The committee says there was no need to buy that land since the government had already acquired land from Mbarara local government.

MPs say that although the UIA board had also rejected the deal, the then acting Executive Director Tom Buringuriza went on to seek money to buy the land.

"A review of documentation revealed that the requested funds were transferred from the ministry of Finance, Planning and Economic Development to UIA on the same day as the request was made and procurement proceedings were initiated," the report adds.

The report observes that when the query was put to the accounting officer, he said the transaction originated from State House.

"The accounting officer responded that UIA management received a letter from Grace Akello then Ag PPS [acting Principal Private Secretary] to H.E the president informing the authority that there was land in Kashaari to be bought by UIA for industrial purposes," reads the report.

The committee report also singles out a case in which the Uganda Land Commission titled 63 acres of land at Luzira in favour of UIA for investment purposes. The committee observes that after the authority acquired that land, it decided to sell the land below the value set by the government chief valuer.

"UIA confessed to have depended on presidential directives while allocating those plots," says Masaka Municipality MP Mathias Mpuuga, a member of the committee.

Mpuuga urged Government to come up with a clear policy and law to regulate future allocations. "We are losing lots of money in this particular arrangement and the more we delay to set up regulations, the more we shall continue to lose property," Mpuuga said. The committee also points out that the irregularly allocated land has not been put to proper use because some beneficiaries were acting as speculators. "When land was allocated to them it was subcontracted to other parties," the report says.

Political interference:

UIA was created by the Investment Code Act, largely to make Uganda the leading investment destination and promote and facilitate investment projects - provide serviced land and advocate a competitive business environment. However, the committee observes that due to continuous political interference as well as lack of clear political supervision and leadership at the authority, UIA is yet to live up to its mandate.

"Due to the fact that some investors are forwarded to the authority by government, the authority doesn't or fears even to assess their performance," the committee chairperson, Amuriat Oboi, says.

According to statistics, UIA is reported to have licensed 337 projects worth $1.7bn with a planned job creation of 130,732 jobs. The highest planned investments were in the electricity and gas sector amounting to $445 million with 75,547 jobs created from four projects.

However, the committee observes that the authority did not have clear mechanisms for following and evaluating the planned investments. "Indeed, our investigations reveal that these jobs are not even created because some of these projects have not taken off as expected by UIA," says Aswa County MP Reagan Okumu.

Okumu, also a member of the committee, says UIA needs to be restructured if it is to achieve its mandate.

"There is need to disband the entire body if it is to be saved from politics that has penetrated its operations," he said.

UIA Board Chairman Patrick Bitature couldn't be reached for comment. However, UIA's former Director of Investment Promotion, Amos Lugolobi, said that due to mismanagement, some UIA projects had failed to kick off.

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