Govt to spend Shs 100bn on LC-I and II salaries

By Obed K. Katureebe

Amount is half the budget of Local Govt Ministry

In early May 2009, President Yoweri Museveni summoned all the district chairpersons and their chief administrative officers (CAO) to a retreat at the Kyankwanzi Institute of Leadership. While the attendance was broadly national, the setting was clearly partisan given that Kyankwanzi is an NRM ideological school.

The retreat was ostensibly called to brainstorm on ‘the way forward for Uganda in terms of economic transformation’. But in the end, the resolutions that emerged signalled a transformation of the country’s political leadership at the local level from voluntary service to paid employment.

Apparently, during deliberations at the retreat, district chairpersons demanded that the government pay them gratuity after leaving offices just like the members of Parliament.

Since 2002, the government has been paying monthly salaries to LC-V chairpersons, their vice chairpersons, district speakers and three district executives (secretaries). The LC-V chairpersons get Shs 2 million per month, the speaker Shs 600,000, while the vice chairpersons and the three secretaries earn Shs 500,000.

The new demand meant that the LC-V chairperson, their vice, the speaker, three executives, and the LC-III chairperson would be entitled to gratuity after leaving offices calculated at the same rate as MPs. The MPs are entitled to a gratuity of 30% of their gross annual salary but paid at the end of their five-year-term.

Museveni not only agreed to the demands but threw in a bonus.

‘You are being selfish,’ he reportedly told the district bosses, ‘You are not minding about your colleagues back in the districts who are offering similar services albeit at the lower level.’

Museveni was talking of the local leaders from both the LC-I and the LC-II who do the biggest task of grassroots mobilisation especially for his NRM party across most parts of the country.

He proposed that government pays an annual honorarium to the LC-I and LC-II chairpersons to address the imbalance. He further argued that district councillors, who apparently only get sitting allowances when council sits, should earn an annual honorarium like the LC-I and LC-II chairpersons. The president justified his radical proposal based on the fact that district councillors and the executive were required to resign their previous jobs so their ‘sacrifice’ should be rewarded by gratuity and salary.

Currently, councillors determine the amount to spend on themselves in form of allowances on condition that it does not exceed 20% of their previous year’s locally generated revenue as a district.

Proposed salary scale

According to information obtained by The Independent, the technical committee of the Ministry of Local Government that is working on formalising the president’s proposals has already come up with tentative figures.

It is proposed that LC-I chairpersons be paid Shs 85,000 per month or a Shs 1,020,000 annual ex-gratia paid once in a year. LC-II chairpersons on the other hand are to earn Shs 100,000 per month or a Shs 1,200,000 ex-gratia, also paid once a year.

It was not yet clear what would be paid to district councillors but it is likely they will be paid either the same amount (Shs 300,000) as is currently paid to LC-III chairpersons per month, or slightly more or less.

‘In my view this will not be salary per se but ‘thank-you-cash’ for volunteering. Apart from the top district leadership who are entitled to salaries and now gratuities, these local leaders will just be getting some money at the end of the year to thank them for sacrificing,’ State Minister for Local Government, Pereza Ahabwe told The Independent last week. He could not discuss the money involved, saying it would be premature since the figures had not yet been agreed on by both cabinet and Parliament.

According to the commissioner for local councils development, Patrick Mutabwire, the technical work will be completed in a month time. He said his technical committee is in the final stages to complete their part for onward cabinet discussion before the matter is finally tabled before Parliament.

Asked if this will not be too expensive on the part of taxpayer, Mutabwire was quick to defend the government saying that the overall goals are ‘wonderful’.

‘The problem with you people is that you interpret things like accountants. Accountants look at the costs but shut their eyes to the overall results. These institutions [local councils] serve 80% in terms of dispensing justice and mobilising people for national development and yet earn nothing out of that work,’ he said.

On top of earning a salary and gratuity, The Independent has learnt that there is a further proposal to give the LC-III chairpersons motorcycles to be used for ‘effective mobilisation’.

Costs on taxpayer

For a country that has been crying over the rising cost of public administration, the immediate implication of this move will be on the budget, especially in the area of infrastructure development.

According to a high ranking official in the Ministry of Finance who preferred to remain anonymous, some districts, if not all, will lose the initial development budget allocations if the president pushes through the proposal to take immediate effect because the proposed LC salaries/ex-gratia were not catered for in the 2009/2010 national budget.

‘The Ministry of Finance cannot review the budget ceiling for the Ministry of Local Government for the year 2009/2010 but can only offer the letter of authorisation such that the ministry moves on to make budget alterations,’ he said.

But the amount is staggering, which means it will be difficult for Local Government to juggle its budget. Besides, this proposal will definitely add a colossal sum to the already staggering cost of public administration now above Shs 980 billion.

For instance, the cost of paying LC-I chairpersons would amount to Shs 85,000 per month multiplied by 52,000 villages which would total to Shs 4.42 billion per month or Shs 53 billion ex-gratia per year!

The cost of paying LC-II would amount to Shs 100,000 per month multiplied by 6,000 parishes which would come to Shs 600m every month, or Shs 7.2 billion ex-gratia per year.

As for the LC-III councils, every parish has two representatives on the LC-III council. Given that there are about 6,000 parishes, it means therefore that there are 12,000 councillors at LC-III level country-wide which would mean if every councillor is paid Shs 100,000 per month as proposed, government would spend Shs 1.2 billion per month and Shs 14.4 billion per year. There are 1,100 LC-III councils in the country and their size depends on the number of parishes in the sub-county.

When it comes to district councils, each council consists of two representatives from the sub-county (LC-III). Given that there are 1,100 sub-county councils, the total composition of district councillors is 1,100 x 2 = 2,200. It is not clear how much will be paid to each councillor but going by the pecking order, it is apparent that they will be paid slightly more or the same as LC-III chairpersons whose monthly salary is Shs 300,000. Assuming they are paid the same, then Shs 300,000 multiplied by 2,200 councillors will amount to Shs 660m per month, and Shs 7.9 billion per year!

Currently, only the district executive is paid ‘“ i.e. the chairman (Shs 2m), vice chairman (Shs 500,000), secretary for finance (Shs 500,000) and secretary for works (Shs 500,000), and the speaker (Shs 600,000).  With districts now standing at 94, the government was projected to spend Shs 385m per month, and Shs 4.6 billion per year on district executives and Shs 330m per month and Shs 3.96 billion per year on LC-III chairpersons.  Should the proposals to expand paid LCs be adopted, the government would spend Shs 7.6 billion per month and Shs 91 billion per year! If you add the gratuity of 30% for LC-V executives and councillors, then the figure stands at approximately Shs 100 billion per year.

The Local Government ministry has many components with specific budgets. These include Local Government Development (excluding Roads); District Functional Adult Literacy Grant; District Equalisation Grant; Local Government Development Programme (LGDP); Non-Sectoral Conditional Grant; Sub-county Development Grant/Strategic Interventions; District Women, Youth and Disability Councils Grants; and District Natural Resource Conditional Grant. The total budget for all these ministry functions is about Shs 200 billion. The LC pay, therefore, will consume 50% of the total Local Government ministry budget.

But it will be higher than the Justice, Law and Order Sector (JLOS) wage bill of Shs 84 billion that government spent in 2008/2009 financial year. JLOS covers staff salaries of Uganda Registration Bureau, Uganda Police (including LDUs), Uganda Prisons, Internal Affairs, Directorate of Public Prosecutions (DPP), Ministry of Justice and Attorney General, Judiciary and Judicial Service Commission, Law Reform Commission, and Law Development Centre. Other areas covered by JLOS wage bill are Ministry of Ethics and Integrity, Ministry of Finance, Planning and Economic Development (excluding URA), Auditor General, Inspector General of Government (IGG), Uganda Bureau of Statistics (UBOS), and the Public Procurement and Disposal Authority (PPDA).

The amount to be spent on remunerating LCs is also just slightly lower than the Ministry of Health wage bill which in 2008/2009 budget stood at Shs 116 billion and lower than the Ministry of Defence wage bill of Shs 147 billion by Shs47 billion in 2008/2009 financial year.

Political dividends 

Whatever the justification for paying more local council officials, political pundits say the whole proposal is aimed at reaping political rewards.

‘Museveni is now desperate for votes and wants to entice the local leaders into supporting him in the 2010 elections that are proving to be tricky to win. The fact that Museveni is now thinking of ‘rewarding’ the LCs who in the first place did not ask for that payment should worry the country,’ said a source.

It is a view shared by Maj. John Kazoora, one of the senior leaders of the opposition Forum for Democratic Change (FDC) party who said President Museveni is pushing for yet another futile attempt to bribe the voters as his popularity continues to wane.

‘Museveni has miserably failed at the Bona Bagagawale scheme and now wants to bribe the LCs as we approach the next round of elections. Let me ask you, where will he get the money to pay these hundreds of thousands of LCs apart from printing more money like Mugabe (Robert, President of Zimbabwe) is doing? We are yet to see the worst inflation this country has ever seen just for the sake of Museveni politics,’ Kazoora said, adding that he was now convinced that Museveni will run down this country just like President Robert Mugabe of Zimbabwe has done to his country for the sake of populism.

But while the opposition rue the political and economic implications of this move on the country, other commentators see yet another masterstroke for the president ahead of the 2011 general elections.

They say vintage President Museveni is trying to attach himself to the biggest social-political network in the country. This is because whoever is elected right from the LC-I up to the LC-V has a reasonable number of ardent followers they can influence politically.

‘You must realise that all the elected LCs are elites who have some element of patronage. In short the LCs have a number of people who they prevail over and once you endear yourself to these local leaders you are assured of capturing their fan base and therefore be guaranteed of their support at the time of election,’ said Dr Sally Simba of Makerere University’s department of Political Science.

According to Simba this is not a surprise to him because the NRM regime is making a shift to consolidate regime power through social networks right from the smallest level up to the top by giving the leadership something to smile about. It is a consolidation of the patronage state.

Will it work?

While many might be outraged at the proposal, cynics say the whole idea may never really materialise.

‘Museveni is using it as bait for LCs just like he used Bona Bagagawale promise of Shs 20m per household during the last presidential elections. It is a mirage and once the LCs have swallowed the bait and helped him win or still elections, they will find that there was nothing or it looks so distant,’ one said, adding that the president is counting on the opposition denouncing him and voting against the bill in Parliament which will take them further away from the LCs.

Be that as it may, the political dividend for Museveni should he manage to push it through will for now be limited to the LC-III and LC-V (district) councils since the lower LC-I and II councils do not legally exist.

In 2006 the opposition Forum for Democratic Change (FDC) party challenged the election of LC-I and II councils held under the Local Council Act. Court nullified the election of LCs and since then no polls have been held to elect new officials. The old officials purporting to be acting as LC-I and II are doing so outside the law and cannot be legally remunerated from the national treasury.

Whether it comes to be or not, however, it is now clear that the issue of paying LCs will play a big role in the politicking of the next few months. How the opposition and the government handle it might in fact determine who reaps the dividends or falls by it in the 2011 elections.