The optics of a supplementary budget that has State House pocketing Shs136 billion marked as classified expenditure have been described as bad, coming—as they do—at a time when a squeeze on public spending should suffice.
The Finance ministry has spent Shs839.881 billion on a variety of organisations, including some votes lawmakers denied funds in the current budget on account of their financial viability to the taxpayer.
In supplementary schedule No.1 for Financial Year 2022/2023, which Finance minister Matia Kasaija communicated to the Auditor General on September 9, the government breaks down its expenditure into three phases.
“The purpose of this letter, therefore, is to request you to allow an expenditure of the above amount, which I will present to Parliament within four months from the date of this letter and include in the Supplementary Appropriations Bill as required under Section 25 (2) of the Public Finance Management (Amendment) Act 2015.”
Section 25 of the Public Finance Management (Amendment) Act, 2015, provides that the total supplementary expenditure that requires additional resources over and above what is approved by Parliament shall not exceed three percent of the total approved budget for the financial year without approval of Parliament.
The government has re-instated cuts made by Parliament in the budget to a tune of Shs247.8 billion. These include UPDF salary enhancement at Shs90.1 billion and additional expenditure needs of Shs501.9 billion.
In reinstating the budget cuts, the government has allocated Shs16.36 billion to cover shortfalls on various critical activities, including Public Procurement and Disposal of Public Assets Authority or PPDA appeals tribunal, acquisition of land for a one-stop centre at Uganda Business Facilitation Centre in Kololo, shortfalls under the Public-Private Partnerships (PPP) unit and funding for East Africa Community (EAC) meetings and resource mobilisation travels.
State House has been allocated Shs155.8 billion, out of which Shs135.8 billion is marked as classified expenditures and Shs20 billion for Kiira Motors.
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The Uganda Police was given Shs42 billion to meet contractual obligations on CCTV equipment and purchase security vehicles for judges.
Munyonyo hullabaloo
The Finance ministry has also allocated Shs86.4b as government contribution to Munyonyo Commonwealth Resort in preparation for the Non-Alignment Movement (NAM) Conference.
In rejecting that allocation to Munyonyo, legislators argued that the government’s shareholding in Munyonyo Commonwealth Resort is uncertain. The House rejected a proposed allocation of Shs84.6 billion to the resort because of uncertainty regarding government’s shares and dividends from the deal.
During one of the sessions to approve the budget, Mr Mwine Mpaka, the Trade Committee chairperson, revealed that Shs12 billion of allocations to the facility is unaccounted for. He added that vital documents have been stolen from the Finance ministry.
In a minority report, shadow Finance minister Muwanga Kivumbi proposed that the government converts to shares all funds invested in Munyonyo; Uganda Development Corporation (UDC) nominates a board representative and the Board of Munyonyo Commonwealth Resort Limited is fully constituted; ensures that Munyonyo Commonwealth Resort Limited has the most recent Annual Report and Financial Statements; inter alia.
We put the concerns of the legislators relating to this particular expenditure and others to Mr Patrick Birungi, the UDC executive director. He said the explanations require a “long interview” and requested Sunday Monitor to visit his offices tomorrow for “our opinion.”
While appearing on NBS TV’s The Frontline political show on Thursday, Ramathan Ggoobi, the Finance ministry’s Permanent Secretary/Secretary to the Treasury, said the investment in Munyonyo Commonwealth Resort is bound “to have a multiplier effect.”
Besides government’s unclear shareholding, Munyonyo Commonwealth Resort’s majority owners are businessman Sudhir Ruperalia, his company Meera Investments, and his wife Jyotsna Ruperalia.
On September 28, Sunday Monitor put questions to Mr Ruperalia as to whether a “valuation to determine additional equity” before granting the money to Munyonyo had happened. Other issues related to “critical governance and accountability concerns have arisen regarding the funds that the government is investing” as well as the failure to convert Shs14 billion into shares.
The funds were spent in 2006 to construct internal driveways, parking yard and rehabilitation of a marina at the resort.
The Munyonyo board, Parliament alleged, has failed to meet ever since 2017 and the most recent available minutes as well as resolutions are up to 2015. Mr Ruparelia did not respond to our request for clarification on the issues raised.
Cash bonanza
Elsewhere, Atiak Sugar Factory is one of the eight projects that attracted red flags from the 2021 Auditor General (AG) report. The AG cited poor planning, change of scope, cost and implementation strategy. In May, the factory in Amuru District temporarily halted operations after management cited a shortfall in the supply of sugarcane from Amuru and Lamwo districts.
The temporary shutdown came barely two years after the factory kicked off the production of brown sugar for the domestic market and export. The government and businesswoman Amina Hersi Moghe are among the shareholders.
In the supplementary budget, government allocates Shs300.3b through the Trade ministry. Of this Shs274.1b is for purchase of government shares in Atiak Sugar Factory while the balance, Shs26.15b is for acquisition of shares in Abubaker Technical Services and General Supplies Ltd.
Government has allocated Shs57.6b to cater to an out-of-court settlement with Albatross and Shs45.7b to buy out the Eskom concession at the Kiira/Nalubaale power station.
Under Vote 117, Shs2.6b is allocated to cater to the wage shortfall of the Uganda Tourism Board (UTB) while the ICT ministry has been handed Shs39.2b for pension arrears to former employees of the Uganda Posts, Uganda Telecom and UPL.
Expenditure
Shs135.8b. State House classified expenditure
Shs86.4b. Contribution to Munyonyo Commonwealth Resort
Shs90.1b. Salary enhancement of senior UPDF officers
Shs274b. Purchase of shares in Atiak Sugar Factory
Shs42b. To police for CCTV and security vehicles for judges
Shs57.6b. Out of court settlement to Albatros
The Daily Monitor News
