The government took $740 million (about Shs1.7 trillion) worth of taxpayers’ money from Bank of Uganda to buy fighter jets and other military hardware from an unknown country.
The money, according to the ruling party MPs who attended the Thursday night NRM Caucus meeting at State House Entebbe, where President Museveni revealed the transaction, was reportedly withdrawn during elections and without the mandatory parliamentary approval.
But the meeting that ended at about 2am sought among others to persuade the NRM MPs to grant a retrospective authority for government to spend the money. “The President told us that the money was used to buy fighter jets and other military hardware he didn’t name,” a member, who requested not to be named because the President strongly cautioned the lawmakers against leaking the information to the press, said. “He said he wanted us to approve a retrospective supplementary of $740m obtained from the central bank.”
According to NRM MPs, who attended the meeting, the President was unwilling to offer substantial details to the deal but asked the NRM MPs to approve the unprecedented supplementary when it comes to parliament in the due course. “We were ambushed,” another member said. “We didn’t know the subject to discuss. The President had documents and kept referring to them, saying the transaction was under classified expenditure. But some members like Felix Okot-Ogongo (Dokolo) told the President that the shilling was depreciating against the dollar because Bank of Uganda doesn’t have money.”
BoU communication director Eriot Mweya was not aware of the transaction but said if government agencies want to buy anything in foreign currency, they use foreign reserves in Bank of Uganda to buy dollars. “They bring local currency to get dollars and this doesn’t mean government got money from Bank of Uganda,” Mr Mweya said. “I suspect that’s what might have happed in that case. In fact, our foreign reserves stand at $2.5 billion worth of five months of imports yet the required foreign reserves should take us for three months.”
MPs also asked the President to explain whether there was any precedent where Parliament has ever approved a supplementary budget of such magnitude. Others demanded for accountability of the recently Shs600b approved in the middle of the general elections. The opposition has since accused the ruling part of using the supplementary to bribe voters in the recently concluded elections.
In April last year, Daily Monitor reported that the government had denied reports in a leading Russian business daily, Vedomotsi, that it had signed a contract with Moscow to buy the Su-30-MK2s fighter jets at Shs654b. However, the following day, the army spokesman, Lt. Col. Felix Kulayigye, said the army would buy six fighter jets from a Russian arms exporter if the government gets the money. Earlier reports indicated that Rosoboronexport, the Russian state arms exporter, would also supply 16 similar jets to Algeria. But Lt. Col. Kulayigye, who had denied the reports, made a U-turn, saying purchases would go ahead because they need the sophisticated Russian-made jet fighters to strengthen the country’s national air defence capability.
“The President told us that the country faces terrorism threats and therefore the government needed to acquire the jets and other equipment to beef up the capacity of the UPDF,” another member said, adding: “Some of us were not convinced because we had just approved Shs600b and now another Shs1.7 trillion. This is a lot of money but we told them to discuss the matter in cabinet and inform us later on the way forward.” Lt. Col. Kulayigye last evening said: “I didn’t attend that meeting at State House and therefore cannot comment on that matter.”
While the ruling party has the numbers in Parliament to push through the supplementary budget, questions emerged last evening on what might have prompted such colossal sums of expenditure at a time when the country is facing economic stress as a result of inflationary pressures. It’s also not clear why this money was never included in the 2010/11 budget.
However, other MPs who attended the meeting said the money could have been spent on the general elections even though the President insists that it was for boosting national security. If this supplementary comes to Parliament, it’s likely to pass through the Budget Committee without huddles since it has been treated as a classified expenditure.
Finance Minister Syda Bbumba and Secretary to the Treasury Chris Kassami were not available comment.
Reaction to the move
Shadow Finance Minister Okello Oduman:
“Ugandans must tighten their belts. The Shs1.7 trillion meant for productive areas, stabilising the depreciation of the shilling and rising inflation in the country is going to buy military hardware in exchange for a service that doesn’t add any direct value to the economy. This is what we call non-quid pro quo movement of money. It’s like injecting money in the population in exchange for nothing.”
Opposition Chief Whip Kassiano Wadri:
“Which country is President Museveni going to attack? We want roads, drugs in hospitals, quality education, better service delivery and not fighter jets. They are yet to account for the Shs602 billion they took from the treasury recently and now they want another Shs1.7 trillion, this is going too far. We cannot match the NRM numbers in the House but as opposition we are going to express our displeasure when this supplementary comes to Parliament.”
Public Accounts Committee Chairman Nandala Mafabi:
“We are talking about Shs1.7 trillion, which is equivalent to the infrastructure and health budget combined. This is money going to non-productive areas and without accountability. It means that the government has lost focus. They don’t have any idea of the country’s priorities. We expect to see budget performance reports and not people asking for more money to buy fighter jets. The government has become a bottomless pit yet our people are getting poorer. There is no value for money and the economy is feeling the pinch because of this reckless spending”
John Odit (Erute South):
“If NRM MPs agree to pass this money, this is going to be one of the greatest plunders of the 8th Parliament. I am a member of the budget committee and I know the fact that Parliament has gone beyond the limit to offer money to government. This is money they used to finance elections and fighting the opposition. The last supplementary budget we approved was 7 per cent yet the accepted percentage is only 3 per cent. We have to block this money in public interest otherwise; we are in serious trouble as a country.”
Franka Judith Akello (Agago Woman MP):
“What’s the urgency to spend $740 million (Shs1.7 trillion)? How come this money was not put in the budget? Let them wait and put the money in the next budget if they want to buy these fighter jets. We don’t have the money yet we continue to incur expenditures as if there is no tomorrow. I request my colleagues in the NRM to think about the taxpayers and block this request. We are still a poor country and cannot afford such a magnitude.”