Civil society organisations have called on government to halt the withdrawal of Shs450 billion from the Petroleum Fund to finance the 2019/2020 budget activities until the investment advisory committee is operationalised.
Addressing journalists in Kampala yesterday, the executive director of Transparency International, Mr Peter Wandera, said the planned withdrawal of the money is contrary to the Public Finance Management Act (PFMA), 2015.
Section 66 of PFMA states that there shall be an investment advisory committee to advise the minister on the investments made under the petroleum revenue investment reserve.
“This committee has not been operationalised since 2015 when the Act was passed. Therefore, all withdrawals from the Petroleum Fund are done illegally,” Mr Wandera said.
He said the law requires oil revenues to be used only for development purposes and not consumption. On Wednesday last week, the Bank of Uganda annual report indicated that the Fund had a combined balance of Shs301b ($74.8m) on the dollar account and Shs28.2b on the shillings account, at the start of the current financial year in July.
However, the planned withdrawal “for transfer to the Consolidated Fund” to finance the budget is Shs445b, which is Shs143b less of the money left on the Fund.
The Anti-Corruption Coalition Uganda (ACCU) has asked the ministry of Finance to urgently formulate policy guidelines in accordance with Section 65 of PMFA on oil revenues.
“These guidelines will ensure that the money withdrawn from the Petroleum Fund now or in future will be used for infrastructure development as provided for in the law,” the executive director of ACCU, Ms Cissy Kagaba, said.
She urged Parliament to use its oversight powers over the minister of Finance to ensure there is transparency in the management and utilisation of oil revenues.
Not the first time
“We have also noted that this is not the first time that government is withdrawing money from the Petroleum Fund to finance other budget activities without putting in place necessary structures to oversee the investments,” Ms Kagaba said.
She cited a case in 2018 where Shs200 billion was withdrawn from the Fund to finance the 2018/2019 budget, which she said did not conform to the PFMA.
The Finance ministry spokesperson, Mr Jim Mugunga, said the Petroleum Fund has protocols that govern its operation, which they will adhere to. “The ministry of Finance and indeed the Treasury will ensure that all protocols and all governing laws are followed. We can’t just release the money,” Mr Mugunga said.