United Bank for Africa (UBA) has entered a deal with government to manage fuel consumption and expenditure of state ministries, departments and agencies.
UBA was awarded the contract by the Ministry of Finance, Planning and Economic Development after Standard Chartered, also known as Stanchart withdrew from the deal.
It is believed that the deal which will compel all government ministries, departments and agencies to use fuel cards issued and managed by UBA, will see the bank collect a cheque from the government every quarter ranging between Shs25billion to Shs45 billion, depending on consumption.
Managing govt spending
“This initiative is part of the wider financial management reforms to manage government costs prudently. And since it was introduced in early 2000s it has been working well compared to years before the reforms,” the Principal Assistant Secretary, Ministry of Finance, Mr Emmanuel Freddie Mugunga, said in an interview.
As a result of the contract, all the government vehicles will be fueling using UBA pre-loaded fuel card.
The technology deployed, according to UBA, allows those responsible for managing cost at the various government departments to instantly monitor fuel consumption and expenditure.
At any one time the accounting officers or the bank can have the card deactivate instantly or blocked to effect control or manage a situation that could be bordering on fraud or misuse.
The system also tracks fuel consumption of each vehicle with precision, making accountability for fuel usage much easier than before.
Minister of State for Investment Gabriel Ajedra said UBA will be judged on how well they safeguard the system from fraud and related risk, and ultimately how efficient and reliable their technology is.
He said: “This is a step in the right direction because government is trying to manage its expenditure by making sure that the money is used for what is budgeted for.”
Back ground to the deal
UBA and the government entered the contract on December 21, 2013 with the Ministry of Finance representing the government. This was after Stanchart had withdrawn.
According to the agreement, the deal is subject to renewal every financial year. However, at the moment, not all government ministries, departments and agencies will be using the fuel card as some of them were still seeing through contracts they signed with several other fuel dealers.
But as soon as they see the contract through, they will automatically be switched on the new system—UBA fuel card.
Nearly 100 government ministries, departments and agencies are expected to be using the UBA fuel card under the new arrangement.