Museveni’s election funding blues

By Mubatsi Asinja Habati

President Yoweri Museveni’s Advisor on Microfinance, Dr Speciosa Wandira Kazibwe, is in a pickle over dubious allowances she allegedly collected from the government’s main lending arm to the poor, the Microfinance Support Centre (MSC).

A report issued by the Inspector General of Government (IGG), Raphael Bakku this month shows how the former vice president allegedly abused her position as chairperson of the MSC board, took dubious allowances, awarded jobs and contracts to her unqualified relatives and friends, and interfered with the day-to-day running of MSC.

In money terms, the IGGs indictment lets off Kazibwe lightly. The IGG alleges that Kazibwe  drew Shs 78.6 million from MSC in a period of 10 months at a rate of Shs 500,000 per day she stepped in the MSC office although it was not her every day job. She also allegedly convened dubious board meetings for the sole purpose of collecting allowances. When quizzed by the IGG, she could only account for about Shs 20 million. The IGGs, therefore, wants her to return Shs 58.3 million she failed to account.

Kazibwe’s problems at MSC, however, present a bigger problem for her boss, President Yoweri Museveni. Although the Minister of Finance, Maria Kiwanuka, on June 22, 2011 sacked her from the chair of the MSC board and fired her appointees, it is not clear how Museveni intends to deal with Kazibwe’s embarrassing case. Will Museveni keep an advisor on microfinance who is accused of pilfering the entity she is supposed to regulate?

There are allegations that money released by the ministry of Finance to MSC was actually used by President Museveni’s 2011 campaign team.

Kazibwe is a confidant of President Museveni and was entrusted with billions of Museveni’s campaign money.

On February 11, just seven days to the February 18, 2011 presidential and parliamentary elections, the Ministry of Finance released Shs 10 billion to MSC in what it termed as revolving fund for the poor.

Kazibwe’s own organization, the S’HE Foundation, got a Shs 500 million cheque from MSC on February 9, 2011, just a week to the February 18, 2011 elections.

Both Kazibwe and then-Finance Minister Syda Bbumba controlled the NRM election coordinating committee, which was among others in charge of the election money.

The NRM election taskforce which Kazibwe headed had reportedly asked MSC to get the money from the ministry of Finance and pass it on to the poor under the Presidential Initiative on Market Vendors and Small Business Operators. Members of these groups later complained to President Museveni that they never got the money.

In 2010, a whistleblower email sent to the IGG, Auditor General, Ministry of Finance and top workers MSC alleged that Kazibwe manages the company like “her personal retail shop”.

“The issue has been the need for Dr Specioza Kazibwe to use company resources for her personal business not related to the company work. She draws millions of shillings in allowances for fake foreign trips from company coffers,” the letter by MSC workers read in part.

The MSC also lent Shs 300 million money to President Museveni’s younger brother; Gen. Caleb Akandanwaho aka Salim Saleh,in 2010.

MSC was established in 2001 to implement the government grand Prosperity for All programme locally called Bona Bagagawale by giving credit to the “active poor” in the country. Its mandate is to coordinate and distribute money to savings credit and cooperative organisations (SACCOs) at low interest rates. Its main project, the Rural Income and Employment Enhancement Project (RIEEP), is a US$19.1 million project 85% funded by an African Development Bank (ADB) loan and 15% or US$ 1.8 million by the government. The project was meant to generate a 50% return on capital and create 1.4 million jobs, especially for women but is now threatened by the alleged mismanagement at MSC.

ADB is also reportedly worried by Kazibwe’s alleged corruption at MSC because by April 2011, it had given it US$7.6 million (Approx. Shs 20 billion) of a US$ 10.2 million soft loan signed in 2009 to fund RIEEP.  The total ADF commitment to RIEEP is US$15.3 (Approx. Shs 36 billion).

The Independent broke the story of alleged mismanagement of MSC money in April 2010 under the headline, “Kazibwe squanders SACCO Shs 300m” (The Independent April 2, 2010). It was followed up by another story: “Dismissal of top Microfinance Support Centre boss sparks probe” (The Independent May 5, 2011).

Concerned about the alleged mismanagement, a six-member strong team from the African Development Bank (ADB), who are the main funders of MSC, between April 18 and 21, 2011 met the then Minister of state for Microfinance Ruth Nankabirwa, the Deputy Secretary to Treasury, Keith Muhakanizi, the ADB Desk Officer at the Ministry of Finance, Charles Ogol and the top leaders and board of the MSC. This was a fourth time the bank was sending a team of investigators.

In their report, the ADB team found MSC’s management accounts had “crashed”.

On Aug. 31, 2009 Kazibwe as board chairperson sent MSC executive director Charles Byanyima an email asking for an advance of Shs 20 million which was granted after promising to pay it back from her monthly retainer.  But the IGG notes: “In a bid to recover the advance, it turned out that Dr Wandira may have taken on many more MSC assignments of her choosing in order to cover the advance. This was because the advance of Shs 20 million was more than her annual retainer allowance and could not be paid in one financial year.”

The IGG also found Kazibwe to have influenced the decision of the MSC contracts committee to irregularly hire Elizabeth Kalembe, a freelance marketing consultant, to carry out the MSC’s risk assessment. The board asked the committee to waive the PPDA procurement regulations and just handed the contract to Kalembe. Later Kalembe was asked to include Kazibwe’s business partner John Baptist Lwanga of M/S Concave International Ltd and son Julian Kiiza to work with on a Shs 79 million contract. Kalembe’s firm was selected after Kazibwe had unsuccessfully fronted her own firm, M/S Concave International Ltd for the job.

However, in spite having faulted Kazibwe on the above accusations the IGG does not indicate in the report on whether it will proceed to prosecute her for abuse of office but simply recommends that she refunds the unaccounted for allowances. Kazibwe is not new to corruption controversy. In 1990s while she was minister of Agriculture and Animal Husbandry she “ate” Shs 6 billion meant to construct valley dams in the cattle corridor.

Kazibwe also usurped the powers of the executive director to appoint one Iggy Rwabukuku as executive director of MSC.  The IGG found that Rwabukuku is masquerading as an MBA holder basing on fake certificates from Kampala international University of city businessman Hassan Bassajabalaba. The IGG now wants Rwabukuku to be prosecuted for acting in conflict of interest and for Basajjabalaba’s university to revoke the MBA it purported to award Rwabukuku.