Donors: Fulfill 7 conditions or forget Shs700b

Junior Finance Minister Fred Omach yesterday said donor nations have set seven conditions before they can re-open the foreign aid taps slammed shut following the Shs50 billion scandal in the Office of the Prime Minister.

The government has up to November to fulfill all the conditions which are the latest consequence of the abuse of billions of shillings intended for post-conflict recovery in northern Uganda and Karamoja sub-region.

The minister told Parliament’s Budget Committee that without aid, in form of budget support, the government is struggling to raise money to finance the 2013/14 Budget. “We had difficulties in OPM but it’s not true that we have to fulfill 43 conditions from the donors. As a matter of fact, the development partners gave us seven conditions which we are already implementing,” Mr Omach said. “We have so far refunded Shs38 billion to the donors and the minister of Finance has just returned from Washington [US] where she had a meeting with the donors.”

Some of the conditions revealed by Mr Omach are payment and recovery of all the misappropriated funds in OPM; interdiction of all public officials involved in the fraud and rotate accounts staff; seek legal remedy and freeze assets for individuals named in the scam; facilitate CID, DPP and Auditor General’s Office to stop another scam.

Others are: fully constitute the Office of the IGG by appointing all the required deputies under the IGG Act, clean up the Integrated Financial Management System, strengthen systems in Bank of Uganda and audit the payroll to weed out ghosts.

The donors, he said, have demanded that the government strengthens anti-corruption agencies by introducing assets recovery laws and protection of witnesses. To-date, the Inspectorate of Government lacks one deputy.

The minister had claimed that the proposed Finance Bill 2013, was part of the conditions, but Mr Alex Ruhunda (NRM, Fort Portal Municipality), who had in his possession a copy of the matrix donors have set, told the committee that the minister was lying. He reminded the minister that in the other conditions, the donors ordered the government to put in place the Anti-Money Laundering Law, enact the law for the Leadership Code Tribunal and establish an intelligence unit to monitor government expenditures in all ministries.

Separately, a senior technocrat in Treasury told the Daily Monitor that the donors also demanded written confirmation from the government that if found guilty, the private companies named in the scam should be barred for competing for government contracts.

They also demanded that the government establishes a single Treasury Account and provide written evidence of the recruitment of an IT security audit expert to provide assurance of the fidelity of government financial management systems.

Mr Omach also said following the OPM scandal, budget support to Uganda has reduced from Shs740 billion to only Shs50 billion in the next financial year.

The lawmakers criticised the decision to refund the stolen cash to the donors using taxpayers’ money.
“The government must account, we lost billions in the OPM scam and there is no serious action to recover the stolen PRDP funds,” Mr Ruhunda said. “I had a meeting with donors recently and they are concerned that the government has failed to fulfill the conditions.”

More than Shs12 trillion is needed to finance the 2013/14 budget but without the fulfillment of the donor conditions, lawmakers are concerned that the budget deficit, resulting from aid cuts, could affect service delivery next financial year.

ymugerwa@ug.nationmedia.com