Finance officials quizzed over Shs500b Covid cash
What you need to know:
- But MPs on the Finance Committee asked Finance minister Matia Kasaija why UDB was lending the money to city businessmen instead of lending it to manufacturers in agro-business sector, private schools and hospitals that were hit badly by Covid-19.
Officials from the Ministry of Finance yesterday came under fire from lawmakers who are investigating alleged misallocation of Shs500b Covid-19 stimulus package.
The money in question was channelled through the Uganda Development Bank (UDB) for access in form of loans to the private sector.
But MPs on the Finance Committee asked Finance minister Matia Kasaija why UDB was lending the money to city businessmen instead of lending it to manufacturers in agro-business sector, private schools and hospitals that were hit badly by Covid-19.
Mr Kasaija was appearing before the committee alongside other top officials from the ministry to defend their Financial Year 2021/2022 Budget.
“We have information that some local manufacturers who want to expand their agro-businesses have been denied the loan. We want to know why the people who are not slated to receive this money such as city tycoons are the ones receiving it,” Mr Charles Ilukor (NRM, Kumi County) said.
Mr James Kakooza (Indep. Kabula County) said the major aim of the stimulus package is to help manufacturers create jobs through setting up more industries in agro-business and other sectors.
“The money was supposed to be given to manufacturers with projects that fit in the third National Development Plan, especially those in agro-business, to benefit all Ugandans, not to be given to selfish people to build arcades that benefit only one individual,” Mr Kakooza said.
Source of anger
Trouble started when the Deputy Secretary to the Treasury, Mr Patrick Ocailap, informed MPs that they have allocated Shs168.3 billion to Post Bank and Uganda Development Bank, among others, as a stimulus package to private sector investors’ in agriculture, agro-industry and other sectors that were hit hard by Covid-19.
He also informed MPs that the ministry has allocated Shs131.2b for the Emyooga programme.
But the MPs questioned the criteria used in the allocation of the money.
The committee chairperson, Mr Henry Musasizi (NRM, Rubanda East), accused Mr Kasaija of failing to effectively monitor the money given to UDB.
In response, the minister told the MPs that his office was not aware that UDB was issuing loans to non-priority sectors and promised to investigate this matter.
“UDB should be investing in agriculture, either primary agriculture or value addition, building factories, or they should be going for tourism. They would lend to people who want to build hotels but not building arcades. Who is the arcade going to help?” Mr Kasaija said.
Minister explains
He said the problem might have come from the side of the UDB Board, which he said is entrusted with clearing beneficiaries. The minister, however, said the board’s tenure is expiring and they will appoint a new one.
Mr Musasizi asked Mr Kasaija and his team to report back before the committee next Tuesday with officials from UDB to explain the matter.
Looking back
In June 2020, government announced that small and medium-size enterprises in agro-processing, manufacturing and tourism sectors would receive about Shs1 trillion to support them during the lockdown. The money was to be channelled through the Uganda Development Bank (UDB).
On March 1 this year, this newspaper published a story, indicating that UDB had disbursed up to Shs242b to vital sectors of the economy in 2020. In the same story, however, many SMEs were crying foul, claiming that “big boys” with political connections had hijacked the money, leaving out genuine beneficiaries.
