Finance, MPs delay Shs882b projects
Posted Sunday, October 13 2013 at 01:00
Kampala- The Ministry of Finance and Parliament are bickering over multi-billion development projects that have delayed to start yet taxpayers pay penalties to the external lenders.
The projects include the seven worth $346million (about Shs882 billion) in loans that were approved by Parliament on Tuesday; six months after Ministry of Finance submitted them for approval.
The government, through Ministry of Finance initiates borrowing to fund various activities in ministries and forwards the project to Cabinet for approval.
When Cabinet approves the borrowing, it’s forwarded to the Legislature for consideration and approval before the Attorney General signs off the loans to make them effective.
However, our findings show that many projects face delays in Parliament; some taking six months while others take more than a year before endorsement. Yet for every loan, there is a penalty for non-use which is knocked off the budget through first-call–on–the budget arrangement [paid off the budget before anything else].
Our findings show that there seems to be general lack of commitment by both the civil servants and politicians to expeditiously handle programmes that would benefit the ordinary people. Part of the problem arises from poor coordination between the bureaucrats and the political leaders.
Documents from Finance show that from the time the projects are initiated, they take longer in Parliament than Cabinet. In Cabinet, if the documents are to go by, loan approvals take maximum of 30 days while in Parliament, the earliest is 120 days.
“Clearly….the problem seems to lie with Parliament, which takes on average 3-4 months to have the loan operation authorised, thus impacting on the 120-180 days prescribed by the lending institutions,” reads a letter to the chairman of Public Accounts Committee of Parliament by Secretary to the Treasury, Mr Keith Muhakanizi.
Mr Tim Lwanga, the chairperson of Committee on Finance, faults both Ministry of Finance and Parliament. “Yes, some of the loans take long in the committee and I don’t know why but the government does not have proper planning,” he said.
Some MPs disagree. “The first delay is in Cabinet,” said Mr Stephen Mukitale, the chairman of the parliamentary committee on National Economy. “Finance delays to give us draft loan agreements, implementation plans and performance of old loans. They are the ones responsible for the delays,” he said.
The MPs blame Finance ministry for alleged signing of loan agreements before parliamentary approval as highlighted in a recent audit report by the Auditor General. However, the Solicitor General has written saying the accusations against Finance were unfounded adding that the signing was an administrative measure which does not bind government.
“The opinion of the Attorney General is a pre-requisite to the effectiveness of the loan. It is required evidence that the loan is duly authorised and is in compliance with the Constitution and the Public Finance and Accountability Act, 2003 and that all procedures necessary for implementation of the loan agreement have been duly effected and completed,” reads the August 25 letter.
The Solicitor General argued that Parliament be included in the project design to avoid unnecessary delays.
Mr Mukitale said they were also upset by projects which take between 5 to 7 years to start after Parliament approves the financing. The counter-accusations show that while funds are available to finance programmes, internal contradictions in government continue to hold the country back.
• Improving health [Mulago and Kampala] - 224 days
• Water Supply and Sanitation Programme - 226 days
• Community Agriculture Infrastructure Improvement - 467 days
• East African Agriculture Productivity Project - 475 days
• National Education Project [Nakaseke District] - 428 days
• Enhancing the National Food Security thru Rice Production in Bukedi - 1 year
• Road Sector support—Kigumba-Masindi-Hoima-Kabwoya Road 6 months
• Hoima-Nkenda Transmission Line Project - 6 months, among others.