Muhakanizi on spot over Shs90b farmers’ cash
Mr Keith Muhakanizi, the secretary to the Treasury appears before PAC on Monday. Photo by Geoffrey Sseruyange
What you need to know:
Misappropriated. PAC cites collusion and conflict of interest saying the funds meant for poor farmers were being given to rich ones.
Parliament.
The secretary to the Treasury, Mr Keith Muhakanizi, was on Monday forced to apologise for the “inefficiencies” in the running of Shs90 billion facility meant for helping poor farmers access cheap credit.
The Parliament’s Public Accounts Committee (PAC) noted “gross inefficiencies, conflict of interest and lack of supervision of the facility” on the part of Bank of Uganda and ministry of Finance.
Because of lack of supervision, PAC chairperson Alice Alaso said the money has gone to rich farmers at the expense of poor ones and more than Shs499 million has been written off in bad debts. “Ministry of Finance officials are hiding the money meant for the poor farmers and giving it to few selected well-off people,” Ms Alaso said.
“For two years they have not publicised the funds and we suspect collusion. We have also found evidence of conflict of interest. For instance a one Charles Byaruhanga, who is one of the people involved in the scheme, is also one of the beneficiaries,” Ms Alaso added.
While Mr Byaruhanga was reportedly out of the country, Mr Muhakanizi promised to remove him from management of the scheme.
Mr Muhakanizi said government has three or four schemes. The first one, he said, is Micro-Finance Support Centre, which is a financing vehicle for the small scale farmers.
He added that the government gives grants to the poor and free seeds through the Naads project.
“We found that in the middle level and above there was a funding gap. The money under this scheme is intended to benefit the medium and the big guys,” Mr Muhakanizi said.
On December 3, 2009, the Governor Bank of Uganda, Mr Emmanuel Mutebile, wrote to ministry of Finance, saying Bank of Uganda could not monitor the implementation and evaluation of the funds, citing conflict of interest, however, to date, Mr Muhakanizi has not taken action.
Mr Muhakanizi apologised for “inefficiency” saying “he is also human”. The committee expressed concerns about the possible risk to the funds and ordered Mr Muhakanizi to streamline the monitoring of the scheme within a month.
Officials from BoU told the committee they signed a Memorandum of Understanding with ministry of Finance and stated that monitoring of the agriculture credit facility will not be their mandate.
While MP Eddie Kwizera (Bufumbira County East) told Mr Muhakanizi the farmers’ facility was given to the big people, Mr Muhakanizi said: “We have identified the problems together, let’s go back and work on them. We are all charged to ensure accountability of the public funds. These projects exist and they have been done on transparency basis and they are contributing to value addition.”
Mr Muhakanizi returns to PAC next week.
Clarification
Mr Muhakanizi said people like Mr Garuga Musinguzi, the proprietor of Kigezi Highland Tea, who benefited from the facility were helping small farmers around saying this is the criteria they are using. He also said the others like Mukwano in northern Ugandan were giving cheap credit to small farmers.
