Today the Ugandan government, the National Resistance Movement finally read the Shs. 29 Trillion budget for the 10th Parliament. However, it is not necessary the size of funds and all, which is allocated, but the way it is funded. Like “Government hopes to raise sh14.6 trillion in revenues to fund the 2017/2018 budget” (Uganda Debt Network, 08.06.2017). Of the 29 Trillion, they expect to get close to half of that, but the monies has get from somewhere and also be of use. What is left are relieved like this: “The balance sh14.3 trillion (49.5%) of the National Budget will be raised through internal and external borrowing” (Uganda Debt Network, 08.06.2017). With this in mind, half of the budget is adding more debt. So if a nation already having lots of debt and debt repayment, it still adds another half budget. This is a bad cycle of events.
There lets us put things in perspective: “Our concern is sh9.9trillion, which is 35% of the total budget, will be spent on debt repayment” (…) “Amount of money spent on debt repayment has escalated in the recent past now at 9.9 trillion for fy2017/18” (Uganda Debt Network, 08.06.2017).
Therefore, the state and the NRM are clearly getting funds through loans to pay-off their interests. AS the 35% of spending is on interest in the coming fiscal year. This should worry, even if the corruption, misspending of obnoxious amount of funds through the paradise of Okello house. Still, that 1/3 of the coming budget is paid interest on old loans, which are been made by this government and by this President. What it show is the lack of concern of the future and how sound fiscal policies. At this state, the government of Uganda are clearly footing the bill. They are filling in the blanks for where they in the past had happy donors filling the envelopes.
The NRM and President Museveni is overspending and misusing state reserves, as the revenue and the state coffers do not sustain this massive overspending. Certainly, it is visible, also the worry of the running interest rates and growing debt as close to half of this year alone are by loans. Neither if it is local, by foreign or multi-national financial institution does save the fact, that the state has a problem.
That of the coming fiscal year, the state is borrowing half, and repaying that with 35% says a lot. IT says the fiscal policies needs change and it is dire. The state are clearly walking the wrong path. And remember this, there will be supplementary budgets during the fiscal year, that will expose the overuse of funds and needs for more loans. Therefore, they are surely going to exploit the faith in future, without having the funds for it today. Peace.
There are many budget posts in a National Budget, but as there are talk of lacking international support of the budget in the Republic of Uganda. The certainty is that even as the donors are fleeing the National Resistance Movement (NRM) and the President Museveni own way of saying he doesn’t need them. Still, I want to show the world collectively what the NRM government have donor sponsored projects through the National Budget, these are projects and development of infrastructure that the NRM needs to show something after over 30 years reign.
Like take Japan the donor funding to the Northern Uganda Farmer Livelihood Improvement Project in the next Financial Year gives to the project Ush. 31.33bn. also donate funds to is the Nakawa TVET Lead Project got Ush. 4.69bn. Japan also donates to Kampala Flyover Construction and Road Upgrading Project with Ush. 155.44bn.
World Bank itself is donating funds in different ways to two other projects, which is African Centeres of Excellence that got Ush. 13.36bn. and Albertine Region Sustainable Development got Ush. 9.35bn. On the other hand the Kingdom of Saudi Arabia donated to the Construction of 5 Regional Technical Institutes with funds of Ush. 6.98bn.
Belgium has also offered their donor funds into the Ugandan state through various projects, like the Program/Project Support to Improve the Quality of Teaching and Learning with Ush. 11.97bn. also the Rehabilitation of the National Teacher Training Centre Kaliro allocated Ush. 15.16bn, they also gave to Rehabilitation of the National Teacher Training Centre Muni funds of Ush. 15.16bn. another project that Belgium was behind is the Support to the Implementation of Skilling Uganda with Ush. 15.96bn.
The Democratic People’s Republic of China has donated to new development projects in Uganda, like they are donating to Industrial Substations Ush. 91.74bn. they also donated to Isimba Hydro Power Plant Ush. 407bn. and also Karuma Hydro Power Plant where they have pledged Ush. 1,305.07bn. or Ush. 1.3 trillion to that alone! The Chinese is also involved in Entebbe Airport Rehabilitation where they have funded Ush. 148.13bn. the pledged funds for Standard Gauge Railway will first come next Financial Year 2018/2019 and not this financial year.
African Union (AU) funds to the UPDF Peace Keeping Mission in Somalia with total Ush. 256.66bn. United Kingdom pledged funds to the Road Infrastructure for Delivery of First Oil with Ush. 252.63bn.
The pledged funds for Kampala-Jinja Highway are first for FY 2018/2019, but no official donor or loaner of funds. Therefore the estimated funds come from thin air. What is also relevant is to see that the Funds from Austria and Denmark has been suspended for different development projects. Still, which I haven’t mentioned is the funds from African Development Bank, also GAVI and Global Funds still gives to health care development, even with the knowledge of the rampant corrupt behaviour in the Ministry of Health.
Therefore if the NRM are contemplating that they are themselves giving these sorts of projects to the people, I hope the donors are putting up boards or signs in the entrance or hallways, even start of the roads where it says what sort of amount of funds they spent on it. So that President Museveni or any other crony can take all the credit, because the credit and the footing the bill to somebody else! Peace.
As of yesterday there we’re the reported 111 cars that vanished and weren’t procured by a Ministry in Uganda. Because of that I had to look more through the report of the Auditor General John Muwanga. There are many stories; some of the ones in this Report have already been discussed on my page.
There so many stories to pick, but here is some of my favourites that shows all from a goats, expressways to other where money have disappeared, over-compensated or not allocated needed funds for the planned procurement and projects that the Government we’re supposed to do. Take a look!
Indebted to International Organizations:
“I noted that a number of Government entities are indebted to International Organizations such as PTA Bank, ADB, EADB, WTO, UNIDO, COMESA and Shelter Afrique. A sample of five entities revealed indebtedness of UGX.77,724,089,603 and US$.4,968,950” (OAG, P: 36, 2015).
Overpay on construction of Kampala-Entebbe Expressway:
“An analysis was done and adjustments for the different features of the two expressways were made. It was observed that the unit cost for the Kampala-Entebbe expressway was US$ 2.315 million per lane kilometre while the similar expressway was US$ 1.204 million per lane kilometer” (OAG, P: 38, 2015).
NAO Project going nowhere:
“The protocol agreement between Government of Uganda (GoU) and Democratic People’s Republic of China (DPRC) was signed on the 27th June 2008. It involved establishment of a demonstration centre under the National Agricultural Organisation. However, it was observed that after hand-over of the site by Ministry of Agriculture, Animal Industry and Fisheries to the DPRC, there was no proper follow up by Government on the project as such it was difficult to establish whether the anticipated funding of RMB YUAN 50,000,000 equivalent to UGX.26 bn was received and how it was applied to the project” (OAG, P: 42, 2015).
NCIP disbursed funds:
“Government signed fourteen (14) protocols under the Northern Corridor Integration Projects where substantial amounts of funds have been invested and implementation is on-going. For example amounts totalling to UGX4.2bn was disbursed to fund the power interconnection and the Hoima-Lokichar-Lamu oil pipeline. However, the protocols do not provide for regional coordination and monitoring as well as the audit framework to provide an independent assurance on the utilization of joint funds. This renders it difficult to track the progress of the projects and follow up the accountability for the funds disbursed” (OAG, P: 43, 2015).
Advances Unaccounted for:
“Uganda National Roads Authority: 47,738,040,619 UGX” (…) “Ministry of Local Government: 3,827,011,454 UGX” (OAG, P:87, 2015).
Bidco has avoided VAT:
“It was noted that as of November, 2014, the outstanding VAT obligations for BIDCO stood at UGX.744,420,170, included in this figure was late payment interest charge of UGX.168,747,557. Accordingly, a sum of UGX.700,000,000 was paid to URA towards settlement of the tax arrears” (OAG, P: 93, 2015). “After the eleven (11) years, BIDCO would start paying VAT directly on its own and from the 12th year start refunding to Government the VAT plus 5% interest for the first eleven (11) years in (8) equal installments over a period of (8) years. This condition was subject to fulfillment of article 4(3) of the agreement which requires Government to have handed fully to BIDCO all the agreed 26,500 hectares of land” (OAG, P: 94, 2015).
“In August, 2010, the Governing Council of the African Development Bank (AfDB) under the sixth general capital increase of the bank allocated Uganda shares worth USD.19,759,798 payable over a 12 years period in annual instalments of USD.1,646,649. It was noted that the payment of Uganda’s 4th instalment of UDS.1,293,299 which became due on 16th March, 2015 had not been made. As a result, the callable shares related to the missed instalment had been suspended in line with the Board of Governors resolution on the sixth general capital increase of the bank meeting” (OAG, P:95, 2016).
“The banana project owns land in Bushenyi together with other movable properties. However, it was noted that the land title is still in the names of the project without the legal mandate to continue owning this land of behalf on government unless the expired legal status is resolved following the legal opinion of the Attorney General to transfer the project under Agriculture sector” (…) “During the financial year 2014/2015, the PIBID project had a budget provision of UGX.9bn out of which only UGX.2.7bn was released as vote on account and as a result, activities worth UGX.6,682,145,000 were not under taken. The affected activities include: purchase and installation of machinery and equipment (UGX.2.5bn), Construction materials (UGX.1.457bn.), marketing of the tooke products (UGX.777,665,000) and procurement of transport equipment (UGX.780,000000)” (OAG, P: 102-103, 2015).
Delayed Construction of Katuna OSBP and swamp reclamation works:
“The construction of Katuna OSBP is undertaken at a contract sum of UGX.8,951,277,750 and Swamp reclamation for access road works estimated at UGX.12,000,000,000. The commencement date for the construction was 13th June 2014 and the estimated completion date was set for 13th June 2015. This was later revised to 30th December 2015. Inspection of construction works showed the following” (…) “The EU Confirmed funding on the 12th May 2014 and all the conditions set by World Bank were met including NEMA’s clearance that was received on the 30th April 2014. I noted that GOU was required to finance the building works for Katuna OSBP since IDA credit funding had been exhausted. The contract for construction of OSBP was finally awarded at a sum of UGX.8,951,277,750 on the 5th June 2014. The EU delayed to operationalize her support and the contractor could not commence on the major building works due to delayed reclamation of the wetland where the buildings were to be constructed” (…) “Management explained that heavy rains, poor terrain and lack of material sources in Katuna such as sand are the biggest challenges. The would be material sources such as hard core are not readily accessible due to the hilly terrain of the area and the contractor can only make a few trips only on a sunny day. For materials like sand, the source is Mbarara (about 150km) and the contractor can only make a few trips given that the road (Mbarara-Ntungamo and Kabale-Katuna) is under construction” (OAG, P: 137-139, 2015).
Uganda Police Force:
“A review of the statement of financial position revealed outstanding payables of UGX.16,454,307,782. Payables worth UGX.10,500,682,162 were incurred during the year which implies that management continued to incur arrears without establishing sufficient mechanisms to monitor and control them” (OAG, P: 183, 2015).
Ministry of Local Government:
“A review of the Ministry of Local Government’s expenditure revealed that the entity charged wrong expenditure codes to a tune of UGX.12,086,792,676. This constituted 40% of total actual expenditure for the Ministry of Local Government. Whereas the funds were spent on items for which they were not originally budgeted for, the accounts have been presented in a way that reflects that the amounts were spent on the earlier budgeted items” (OAG, 2015).
M/S Faw Limited:
“A local company was contracted by the Ministry to provide storage space for the various roads, sanitary and fire-fighting equipment procured under a Chinese loan in 2011/2012 financial year from their parent company. The providers were paid UGX.1,416,000,000 during the year 2014/15 for 20 months storage of the equipment delivered. A review of the procurement file revealed the following” (…) “It was noted that only the Contracts Committee decision on a submission (PP Form 209) approving the evaluation report and contract award at a monthly fee of UGX.70,800,000 were available on file. However, the Solicitor General’s approval and contract agreement were on the procurement file. No initiation of procurement, invitation of potential bidders, record of receipt of bidders, evaluation report and PDU submission of Evaluation Committee report to Contracts Committee were on file to support the award” (…) “A review of the availed documentation revealed that two conflicting pro-forma invoices were submitted by the firm with one quoting a monthly fee of US$.14,160 VAT inclusive for ten months, that is; from 1st June 2012 to 31st March 2013 totaling US$.141,600 and dated 17/5/2012 and another one dated 2/1/2012 quoting a monthly fee of UGX.70,800,000 VAT inclusive for twenty months without clarifying the particular months” (…) “The final batch which arrived in August 2013, was commissioned by the president in October 2013 and handed over to police on 19th December 2013 implying storage of at most five (5) months. This makes fourteen (14) total months of storage as opposed to the 20 months billed resulting into a loss of UGX.424,800,000” (OAG, P: 237-239).
Ministry of Defence:
“During the year the Ministry’s total expenditure on land acquired amounted to UGX.1,119,388,145. However, it was noted that the government policy of capitalising the acquired land from the financial year 2011/2012 did not give guidance on what to include as cost of land acquired. As such, this amount could not be verified due to lack of guidelines on treatment of land costs in the financial statements” (…) “It was observed that a sum of UGX.1,000,000,000 was paid to an individual as part payment on a claim of UGX.2,958,668,733 for the compensation of 683 cattle and 119 goats which were handed over to 4th Division for safe custody during the insurgency period in 1986” (…) “It was not possible to confirm whether this claim had not been paid before since it is now 28 years since the purported supply of the animals” (…) “It also appears that these animals were for various people but instead the compensation was made to one individual” (OAG, P: 285-288, 2015).
State House Entebbe – Okello House:
“State House has been occupying Okello House for many years with a tenancy agreement that expired in 2013. However, it was observed that State House has not renewed the tenancy agreement and no rent payments have been made to the landlord despite continued occupancy. At the close of the financial year, a sum of UGX.1.272,363,507 was outstanding in rental arrears” (…) “National Housing and Construction Corporation owns properties on Plot 1 Kyagwe Road–Nakasero which is currently occupied by State House. Documents indicate that National Housing has been demanding arrears of UGX.201,100,000 from State House. These arrears have not been reflected in the financial statements” (OAG, P: 294-295, 2015).
If you don’t find this interesting that the Government of Uganda is misspending funds in this way and that this is just a figment of imagination as this is pieces of a giant report. The most interesting is that one man got the whole piece of the pie of what happen in 1986 and secondly that the State House doesn’t even have an agreement with the tenant who owns Okello House where the President has gallant dignitaries. That shows the state of affairs, brothers, time for a change and also better procedures and practices! Peace.
OAG – ANNUAL REPORT OF THE AUDITOR GENERAL FOR THE YEAR ENDED 30TH JUNE 2015