Questions about Museveni money

A disparate account by officials is raising suspicion over the source of the Shs900 billion that President Museveni directed technocrats to find for road works, which should have commenced by a December 15, 2010 deadline.

Whereas deputy Treasury secretary Keith Muhakanizi, in interviews with Uganda Decides, said the money was available on demand, Uganda National Roads Authority (UNRA) indicated that only about Shs200 billion could be found for the prescribed purpose in the first year, under the current budget. It has emerged that no instructions were issued to Ministry of Finance technocrats to process the cash.

Budget foreshadows
Late last year, Mr Ofwono Opondo, the spokesman for the Museveni campaign task force, suggested a supplementary budget may become necessary to expedite the construction works.

Indeed Shs4.5 billion was approved for the Ministry of Works as part of Shs602 billion supplementary budget Parliament controversially endorsed last week.

In his directive issued on September 29, the President who is seeking a fourth elective term, made clear he will not entertain any delays because he has to “account to voters” while on the campaign trail.

As it turns out, the priority roads marked out for immediate surfacing are those Mr Museveni promised voters that his government would tarmac during either the 2001 or 2006 election campaigns.

He won both elections before throwing his hat into the ring for the current contest, only to face voters unhappy about unfulfilled promises.

His order will have forced policy implementers to waive some crucial vetting requirements and rush the procurement process, including handpicking contractors who should have been on the site by the December 15 deadline. The procurement rules allow for such waivers in emergency tendering. Mr Muhakanizi said that they already budgeted for the road works

Tall order?
The nine national priority roads the President wants upgraded to bitumen measure some 576 kilometres and are estimated to cost Shs800 billion to fix.
Four of the said roads to be surfaced are in western Uganda, three in the central region and one each in eastern and Karamoja area.

None connects to or through northern Uganda, the gateway to the lucrative southern Sudan markets.
Additionally, there is some 10, 000 kilometres of district roads that have been converted to national roads following their recent takeover by UNRA for maintenance purposes.

A scrutiny of the 2010/11 budget as approved by Parliament shows that nothing near Shs900 billion was provided for the road works required to be done immediately, suggesting then that whatever money will be expended on this development was politically driven.
For instance, of the Shs1 trillion vote to Works and Transport, Shs117 billion goes to the parent ministry while UNRA, which is in charge of national roads, will receive Shs424 billion for both recurrent and development expenditure.

There is some Shs283.8 billion under the Road Fund docket, which if added to allocations to UNRA totals roughly up to Shs700 billion, suggesting a shortfall of Shs200 billion that officials cannot properly explain where it will come from.

And since funds given to the Roads authority will be used for other purposes or infrastructure development other than just the nine roads, it means the funds shortfall for the “priority” works was much more serious.

‘Not like bread’
UNRA Spokesman Dan Alinange would say when interviewed for this article that they expect releases to work on the priority roads to be spread over three years since such construction on average take 30 months to complete.

“Road works is not like going to a supermarket and picking bread. We shall only pay the contractors the equivalent of the works they will have done,” he said.
Mr Museveni separately directed that Shs200 million should be availed by Treasury to compensate survivors and relatives of victims of the 1989 Mukura killings in which National Resistance Army (NRA) guerillas, the precursor to UPDF, alleged huddled villagers in train wagons and set them alight.

However, Mr Muhakanizi says the more than Shs1 trillion required will be found. The assurances come amid warnings by experts that spending outside the thresholds endorsed by Parliament will be illegal and could stir “micro-economic instability”.

Already, Shs113 billion to clear arrears of more than 29,200 pensioners, among them ex-servicemen has been ordered by the President.

Makerere University Economics Professor, Augustus Nuwagaba, said; “If you spend on pressure, emotionally, politically or on ad hoc basis, it would mean other silent and yet more important sectors may never receive required funds.”

According to him, all government expenditure should conform to financial allocations and schedules approved by Parliament, including supplementary vote.

The central bank has, however, moved to calm fears that the pumping of huge sums of money into the economy during the campaign season could spark inflation.

Cash has been flowing from contenders to their agents, transporters and makers of posters as well as promotional T-shirt and media advertisers, among a bunch making a kill this election period.

Bank of Uganda’s communications director, Mr Juma Walusimbi, told this newspaper that they are tracking the inflation, exchange and interest rates and will suck up excess liquidity from the public through sale of treasury bills and bonds.

The volume of Ugandan currency in circulation by end of August topped Shs1.5 trillion. “We believe the inflation rate will not go beyond the target threshold of 5 per cent,” he said, adding: “This (government spending) won’t be flooding the economy with cash because it was also projected and catered for in the budget. What we are doing now is front-loading.”

Front-loading refers to the practice of spending on a budget item ahead of schedule, which Prof. Nuwagaba criticised as “unnecessary and likely to cause micro-economic instability”.

Latest official figures show the November inflation rate climbed to 1.4 per cent, a percentage point higher than in the previous month. There is yet no evidence the rising election-related expenditure triggered the heating inflationary tendency.

Oppositions says
Shadow Finance Minister Oduman Okello said President Museveni should not seek to gain personal advantage over opponents by vending government programmes as if they were his personal or exclusive NRM party initiatives.

“The President should simply demonstrate to voters that he can be trusted on his word. Where is the prosperity he promised for all Ugandans in 2005?” he asked.