Museveni red-flags URA, Central Bank over graft

President Museveni arrives for the Emmanuel Tumusiime-Mutebile Memorial Lecture at the Kampala Serena Hotel on January 27, 2023. PHOTO/STEPHEN OTAGE

What you need to know:

  • The President promised to wage a war against the corrupt officials, but declined to disclose them.

President Museveni has named Uganda Revenue Authority, Bank of Uganda, and the Finance Ministry among other public institutions, where corruption remains one of the familiar challenges the country faces today.   
The President, who was speaking at the Emmanuel Tumusiime Mutebile Memorial lecture on Friday, cited corruption as “number one” weakness which according to him hinders socio-economic transformation of the country. 

“Corruption is not an economic issue, it is corruption…The low tax GDP ratio of 13 percent or 14 per cent, is really due to the corruption in Ministry of Finance and in the URA.  Although we have changed, but there [is] still a problem there. I have told them many times, and I have quite enough evidence to show them that there is a lot under collection of tax and [an] International Monetary Fund (IMF) person [who raised this issue was correct],” the President said.  
‘‘All these new buildings, the real estate you see [ and in the telecommunications],  there is a lot of under-collection of revenue, and all this is because of the corruption in the Ministry of Finance. Some of those people who were under Mutebile were not as clean as he was, they were doing all sorts of bad things but we are struggling with them.   
“In these telephone companies, there is a lot of corruption there. They are under-declaring revenue, they make very many calls and few are declared. There is a big war going on there,”  he said.

When contacted last evening to explain why the telecommunications companies are under-declaring the calls and whether any sanctions have been placed against them,  Ms Irene Kaggwa, the executive director Uganda Communications Commission, said there are efforts to look into the matter but required sometime to sit down with the this newspaper to give it the background so as to appreciate it and get the full understanding.
“I need to help you understand the issues of concern that you get the proper context. Giving you a one-minute comment may not help you,” she  said.
President Museveni red-flagged corruption as “a real war” his government is dealing with, and promised to deal with the corrupt officials he didn’t disclose.  
 He addressed corruption issues as he responded to key issues affecting the economy, raised by Dr Donald Kaberuka, the 7th president of the African Development Bank and the chair of the Global Fund, who was among the discussants at the first Mutebile memorial lecture. The BoU governor died on January 23, 2022.

 Ms Charity Mugumya, the director of communications at Bank of Uganda, declined to comment on the President’s remarks on corruption at BoU and asked this newspaper to seek clarification from the presidency docket.
 Mr Ibrahim Bbosa, the assistant commissioner of corporate and public affairs at Uganda Revenue Authority, admitted that two years ago before he joined the tax body, a lot of corruption was going on undetected at the tax body. He explained that President Museveni deployed the current Commissioner General Musinguzi Rujooki to clean up the mess and a lot is going on in that direction.

 “You heard about the corruption at Entebbe Airport, this is part of it, the staff at Elegu border have been shuffled three times, senior management are being evaluated every month, when I joined in 2021/2022, 30 staff left through a disciplinary process, in December last year, three staff were sacked and two suspended,” Mr Bbosa said.
 According to Mr Bbosa, URA management introduced “lifestyle audits” on any staff upon whom integrity issues are raised and that the taxman is trying as much as possible to automate all their systems to minimise human contact. 
 On legacy, the President described the late Governor as a “useful ally and a member of NRM, a friendly force on the side of the economy” who helped his government to transform the economy, put emphasis on the private sector, stabilised the shilling and controlled inflation. Mutebile was against introduction of minimum wage, health insurance and advocated free market economy.  
 The President who described himself as “an umpire” in a sizzling disagreement between Mutebile and former Finance Minister Dr Ezra Suruma over the controversial  sale of Uganda Commercial Bank. The President explained that he had disagreed with the late Mutebile, but later swayed him to his side, a decision he now regrets and called it a wrong decision.  

 “UCB was doing very well because it was making profits but the Mutebile group put out forward an argument that the interest rate was high because UCB is a government company and the managers are carelessly giving loans and many of the loans are not paid back and we who are stupid to pay back end up to pay for ourselves and those who didn’t pay….But Dr Suruma put up a big fight but I got persuaded by Mutebile. I said let’s try [the private sector people] and see,” Mr Museveni said. 
 “We called the South Africans, these people called Stanbic, they came but they have done nothing. Then there were other government banks UDB, Housing Finance and Post Bank, they wanted to privatise but I said, please forget no more privatisation of these banks because I made a mistake of UCB, I will never repeat it again.”
What other said about Mutebile
According to Dr Kaberuka, if Mutebile was still the Governor Bank of Uganda, he would have asked the government to act on the current foreign debt which stands at 50 percent which is slightly shy of the 64 percent maximum. 
He also indicated that “the country is performing poorly in debt servicing” and asked the governments to look into the booming real estate business in order to widen the tax base and domestic revenue mobilisation.  

     Mr Ibrahim Bbosa, the assistant commissioner of corporate and public affairs at URA, reiterated that the tax body is changing the staffing to bring in a breed of people who can be shaped to think in the direction they want the authority to take.    
    He also talked about shaking up of top management, which according to him had never been the case in the recent history of the tax body.