Post Bank, telecoms explain Sh2.85Bn charges on relief funds

Kampala, Uganda | THE INDEPENDENT | A joint parliamentary team, comprising the Public and Local Government Accounts committees, has tasked officials from Post Bank Uganda Limited, MTN and Airtel to provide accountability for the 2.85 billion Shillings reportedly spent on administrative costs to send COVID-19 relief cash to vulnerable Ugandans.

The team was tasked to review a list of beneficiaries of the COVID-19 cash, which was tabled before parliament by Prime Minister Robinah Nabbanja last month.  Under the initiative, the government has been distributing 100,000 Shillings to selected people classified as vulnerable during the 42-day lockdown which ended on Friday.

The beneficiaries were identified from groups of people that depend on daily earnings in Kampala, cities, and municipalities across the country. They included bus or taxi drivers, conductors, baggage carriers, wheelbarrow pushers, touts, traffic guides, barmen, DJ’s, barmaids, waiters and bouncers, Bar, gym and restaurant workers, bodaboda riders, special hire drivers and Uber drivers, Salons, massage parlour workers, teachers, and others.

But this week, Henry Musasizi, the State Minister for Finance told MPs that his Ministry had an approved COVID-19 emergency funding amounting to 53.5 billion Shillings and out of this budget, to cover all the

501,107 targeted beneficiaries. but out of this, a total of 2.854 billion Shillings was spent on administrative costs including mobile money transfer costs. The remaining sum of 50.645 billion Shillings was transferred to the Ministry of Gender account in Post Bank to facilitate direct transfers to the chosen beneficiaries.

Martin Ojara Mapenduzi, the Chairperson of the Local government Accounts Committee on Thursday demanded information about the transactional charges. The officials including Post Bank Executive Director Andrew Kabeera, Chief Executive Officer/Managing Director, Julius Kakeeto, the Airtel Money Acting Director, Andrew Rugamba, MTN’s Mobile Money CEO Stephen Mutana and others appeared before the committee on Thursday evening.

Post Bank’s Executive Director, Andrew Kabeera said that they received 488,272 total transaction instructions from the Ministry of Gender and successfully processed 487,307 transactions using the platforms for MTN and Airtel. A total of 965 transactions failed.

Kabeera explained that Post Bank sent 102,425 Shillings and out of this 2,425 are charges that can be better explained by Telecoms. He noted that for the 487,307, they charged 1,000 Shillings on each making their total charge 487.3 million Shillings.

“As Post Bank, normally what we call ‘Bank to Wallet’…if you have an account and you are pushing money to your phone we charge 3,000 Shillings. When we engaged as a social cause, we said we shall charge 1,000 Shillings instead of 3,000 Shillings for every transaction,” Kabeera explained.

On why the government could have chosen Post Bank for the transactions and not any other Bank, the Chief Executive Officer Julius Kakeeto said that the Ministry of Gender could have considered the Bank’s history of paying out the Social Assistance Grants for Empowerment (SAGE).

Andrew Rugamba, the MTN Mobile Money CEO also explained that the charges were one of the key issues that were discussed in meetings with Prime Minister Robinah Nabbanja. He said that there was a logic behind the 102,425 Shillings, so that when a person withdraws the money, they receive a net of 100,000 Shillings.

“The Government of Uganda paid the 0.5 per cent tax on withdrawals and the charge of withdrawing 100,000 Shillings which is the same for MTN and Airtel is 1,925 Shillings. We agreed in the spirit of the moment that the country was going through, we both zero-rated the fee for disbursement which is ordinarily 300 Shillings,” Rugamba further explained.

He however said that the withdrawal charge remained because the mobile money agents are also Ugandans and depend on commissions.

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