8 February 2018

Uganda: Kadaga Orders Audit On Kasaija Over Shs700b

Photo: The Monitor
Secretary to the Treasury Keith Muhakanizi, left, and Finance Minister Matia Kasaija appear before Parliament’s Public Accounts Committee last year.

Parliament — The Speaker of Parliament, Ms Rebecca Kadaga, yesterday ordered an investigation against Finance minister Matia Kasaija and Secretary to the Treasury Keith Muhakanizi for allegedly bungling Shs700b government money, and suspended any debate on the parliamentary recommendations to censure the duo over the same matter.

Ms Kadaga asked the Auditor General (AG) to conduct a forensic audit into how the Shs700b loan to government went missing. She asked the AG to submit the audit report by February 20 to be debated together with Parliament's Public Accounts Committee (Pac) report, which recommended stern action against Mr Kasaija and Mr Muhakanizi.

Debate on the two reports will then resume on March 28.

The Pac report recommends that Mr Kasaija be censured on account that he misled and lied to Parliament that the loan's most critical funding objective was medical supplies.

Mr Kasaija was also implicated by Pac for lying to Parliament that National Medical Stores (NMS) had never provided the needed supply contracts to enable release of the funds. The Pac report further says the minister further duped Parliament by re-packaging the same loan and thus obtaining money by false pretense.

Muhakanizi's case

On his part, Mr Muhakanizi was condemned for lying to Parliament and abusing his authority by insisting on acquiring the loan against strong advice from the Bank of Uganda Governor, the Accountant General and the Director of Economic Affairs.

However, during the debate on the report yesterday, Parliament failed to reach consensus on the report's recommendation for punitive action against Mr Kasaija and Muhakanizi, the two top technocrats at the ministry of Finance.

The MPs insisted that Mr Kasaija and Mr Muhakanizi be punished, while the latter called for an investigation by the AG.

"In order to ascertain the performance and utilisation of the loan, there is need for the AG to carry out a special audit of this loan in order to guide the [Pac] report. I direct the AG to carry out a special audit on the utilisation and performance of the $200m," Ms Kadaga ruled to resolve the impasse.

Background

The loan. The Shs700b loan the government took in 2016 from the Eastern and Southern African Trade and Development Bank (PTA Bank), was meant for procurement of medical supplies for NMS.

Part of the money was also meant to cater for procurement of earth-moving equipment from China and funding of Rural Electrification projects.

Approval for the loan was controversial as it was initially rejected by Parliament on grounds that there was no compelling reason to borrow.

Technocrats at the ministry of Finance, however, turned around and re-tabled another loan request but for the same, which the Bank of Uganda Governor Emmanuel Tumusiime-Mutebile, opposed on account that the Central Bank had "more than sufficient foreign exchange reserves to support these interventions".

Mr Kasaija ignored Mr Mutebile's advice and proceeded with the loan request, which Parliament later approved.

Trouble started when NMS wrote several petitions to Mr Kasaija and Mr Muhakanizi asking for the money that was meant for buying essential medical supplies.

However, Mr Kasaija advised NMS to procure medicines worth Shs41b on credit, but it failed as it had overshot its credit ceiling. With a crisis of medical supplies looming in the country, Parliament stepped in and started investigations into how the money for the supplies had disappeared. That culminated into yesterday's directive by Ms Kadaga for an audit of the funds.

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