Ghost moneylender debt in supplementary budget

When Parliament ultimately approved the government’s request for borrowing over Shs3.4 trillion in supplementary expenditure, a peculiar element marked the proposal.

The Executive had sought the House’s approval for Shs12b “as arrears” to the moneylenders association. However, the bill provided no further case for this allocation. The House committee scrutinising the bill also found no reason to back the request and consequently rejected it.

This publication has sought explanations for the justification of the request with several sources, including top money lenders, opining that it could have been an attempt to steal taxpayer money by some unscrupulous individuals.

The framers, our sources who requested not to be named to speak freely,  said such underhandedness is not new, and items can be smuggled into budgets with the hope that they will miss scrutiny.

In their report to the House, the Budget Committee, which scrutinised the Shs3.5 trillion supplementary request, noted, in respect to “arrears for money lenders’ association” that: “There was no confirmation of the need for these funds as no verification had taken place. The committee stays off approval for arrears for money lenders’ association.”

Mr Ramathan Ggoobi, the Finance Ministry Permanent Secretary, who in a November 28 letter to the Clerk to Parliament introduced the supplementary, told the Monitor that it was in fact his ministry that raised the red flag.

“It had been included on the schedule under three percent following a claim by financial institutions that some years back, before decentralisation of the payroll, some money was deducted at source from some public servants with salary loans but was not remitted to the financial institutions,” he said.

“I stopped the payment of this when I learnt from the Ministry of Public Service, which manages the deductions on behalf of the financial institutions, that further verification was needed to established what exactly happened,” he added.

Several top money lenders told the Monitor that they had no idea about the alleged arrears and the legal status of the association to be compensated.

In November 2017, the State Minister for Finance in charge of microfinance, Haruna Kasolo, launched an association dubbed the “Uganda Money Lenders Association.”

We could not establish if the Uganda Money Lenders Association has any relationship with the “money lenders association” in the Finance ministry and House documents. This newspaper has also seen references to a Money Lenders Union Limited but there is no indication that this entity is also connected to the request by the government.

 Shs100b tonic

Meanwhile, the loss-making Uganda Airlines will, in the supplementary, receive Shs100b for the annual maintenance of the aircraft, procurement of a spare engine, insurance costs, settling outstanding obligations on the maintenance contract with Rolls Royce, and leasing of aircraft during the period the current aircraft fleet is undergoing maintenance.

Initially, the Shs100b for Uganda Airlines had been reflected as funding to Uganda Air Cargo, but this was amended.

According to the Auditor General, Uganda Airlines has accrued more than Shs500b in losses across the last three financial years (FY). The entity posted Shs104b in losses in FY 2020/2021, a Shs164b loss in FY 2021/2022, and another Shs234b loss in FY 2022/2023.

Officials of the airline, including the chief executive officer, Ms Jenifer Bamuturaki, see light at the end of the dark tunnel with projections pointing to 2027 as the year the company is likely to break even.

In January, Speaker Anita Among blocked the tabling and debate of a report authored by the Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) on the operations of Uganda Airlines.

The Speaker justified the move by arguing that the report was leaked to the media late in 2022 before it could be allocated space on the Order Paper.

The leaked Cosase report made damning findings about the airlines and recommended a forensic audit. The Auditor General has previously raised serious issues about Uganda Airlines such as unsupported payables, direct procurements, and the absence of adequate records for equipment acquired for the aircraft’s operation.

Some supplementary approvals                               

Shs253.3b (classified) for State House

Shs188b classified expenditure to Defence

Shs800m to Public Service

Shs500m to Foreign Affairs

Shs14.5b to Ministry of Justice

Shs31b to UTELI

Shs13b to MSC

Shs3b- compensation of Buganda properties

Shs4b-compensation of Bunyoro properties

Shs3b -compensation of Tooro properties

Shs13.9b to support HESFB

Shs17.7b for Mandela stadium works

Shs9.8b to Health

Shs25b as additional capitalisation of UDC

Shs33b for compensation to SGS

Shs70b for Kabalega airport in Hoima

Shs100b for Uganda Airlines

Shs23b for Karuma & Isimba costs

Shs19.6b for Namanve thermal power plant

Shs30b for Karuma start-up costs

Shs128b for electricity access scale up

Shs2.7b for facelift of Gaddafi mosque

Shs1b as facilitation to attend Joint Permanent Commission in Kinshasa

Shs15.7b as additional Non-Tax Revenue collections by UWA

Shs23.8b to Uganda Industrial Research Institute

Shs175.8 to Uganda National Roads Authority (UNRA)

Shs30bn to Uganda Cancer Institute

Shs7.9bn to Uganda Heart Institute

Shs266bn to National Identification and Registration Authority (NIRA)

Shs147bn to Uganda Bureau of Statistics

Shs13.5bn to Uganda Land Commission

Shs19.9bn to Internal Security Organisation (ISO) for upgrading the system for tracking wealth creation programs

Shs10bn to Uganda Business and Technical Examination Board (UBTEB)

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