The Shs700bn loan saga and calls to censure Kasaija

“Despite several demands, the Committee was never availed with the specifics on how the disbursed amount was spent by the end of FY2016/17,” the PAC report noted.
Asked by The Independent to give his side of the story, NMS boss, Moses Kamabare, first declined saying; “we gave details to PAC let us wait for the AG (Auditor General). I feel constrained to talk about the issue now.”

Pressed further about whether finance had made the releases they claim they have, Kamabare added; “They have made those claims before. The issue is not the percentage of appropriation. It is whether we needed Shs. 68 billion over and above the appropriation and whether that amount was given and when it was given. Everything else is beside the point.”

Muhakanizi’s defense

In their defense, Kasaija and Muhakanizi, insist that the PAC report misrepresented the objectives of the PTA Loan, which was, among others, “general budget support to be utilized for fiscal purposes”. The Hansard dated Thursday 7 April 2016 and another Hansard dated 26 April 2016, when the loan was debated and approved, also show the purpose of the loan as fiscal purposes. The PAC report states different objectives of the loan.

Regarding claims that initial transfers from the PTA Bank Uganda had tags of vote names on them indicating that the funds were meant for entities such as NMS, REA, UNRA, and Ministry of Works, Kasaija told Parliament that the tagging was a mere accountability tactic to satisfy PTA Bank requirements. PTA Bank is very strict on ensuring that its loans are not used to finance items that are prohibited by PTA Bank policy.

For the PTA Bank to confirm to the shareholders of the Bank that the funds were used for the purposes intended, they requested for documentation to prove that indeed expenditure has been incurred in the eligible areas, as prescribed in the loan agreement. Upon satisfactory evidence that expenditure has been incurred by government in the areas agreed, the PTA Bank reimbursed or disbursed the funds to the Uganda Government Consolidated Fund and not to the account of the sector or institution that incurred the expenditure.

Regarding how the PTA Bank money was spent, Kasaija and Muhakanizi maintain that all the money ended up in the Consolidated Fund of government and was used for government fiscal activities. They argue that the money could not have gone to the tagged entities because, in any case, the Finance Ministry would have already made expenditure releases to those entities, and the PTA loan money was reimbursement.

This is not the first time that Muhakanizi appears to be in a tight corner over money. It appears to come with the territory for someone whose job is to mobilise and allocate very scarce resources to fund government projects. Sometimes, his actions spark fights in the Finance Ministry and with technocrats and politicians outside.

Some politicians have openly threatened to fix Muhakanizi and some of his top lieutenants for refusing to allocate resources to their sectors. Others have openly accused Muhakanizi of refusing to allocate resources to their sectors because they “haven’t given him cuts”.
So scandals, such as this keep popping up. Last year alone, officials at Finance had been caught up in a string of scandals including an allegation that US$ 30 million had “disappeared” from the Consolidated Fund. Then there was a claim that every time payments were made for Bujagali Power Dam, Muhakanizi got a cut, and finally one made by the Internal Security Organisation (ISO) that Muhakanizi had used hackers to steal US$ 20 million from Bank of Uganda. None of them were proved.

Museveni lays trap

But that did not stop President Museveni from plotting to catch Muhakanizi red-handed.
On March 27, 2017 following a tip from ISO, President Museveni had asked some State House agents to lay a trap for officials at the Finance Ministry. Among their other targets was Muhakanizi. They failed to nail the PSST and instead netted Charles Ogol, the principal finance officer, and Geoffrey Turyamuhika, a senior economist—whom they reportedly caught with a bribe of $60,000.