The fund is overseen by the Bank of Uganda operating on three accounts. The accounts include a dollar and shillings accounts managed at Bank of Uganda and a third account in New York to facilitate the investment of revenue. The fund has two objectives including financing the budget and saving or investment for the future.
Bahati yesterday confirmed a zero budget allocation from the fund to support the coming financial year 2020/2021 budget despite previous allocations. Bahati together with the director budget in the ministry of Finance Kenneth Mugambe, and other officials were on Wednesday appearing before parliament’s finance committee to defend the Budget Framework Paper for the financial year 2020/21.
The Budget Framework Paper indicates a zero allocation from the Petroleum Fund something that the parliament's finance committee chairperson Henry Musasizi sought for an explanation.
In the financial year 2017/2018, government withdrew Shs 125.6 billion from the fund in November 2017 to support the budget and also transferred another Shs 200 billion to the Consolidated Fund to finance the budget for the financial year 2018/2019.
In May 2019, parliament tasked government to put in place a petroleum investment framework to guide the investment of funds from the Petroleum Revenue Investment Reserve.
The decision followed a report indicating that the fund was not growing since funds therein were used to finance the national budget contrary to provisions of the Public Finance Management Act. It was also reported that the government had not put in place a petroleum investment framework as envisaged in the law.
The then report by parliament's budget committee was prompted by government plans to raid the fund and pick Shs 445.8 billion to finance the current 2019/2020 budget shortfall.
The committee cautioned the government to contain its appetite for the oil funds before production kicks off citing depletion of resources in the Petroleum Fund with no clear indication on what the money is spent on.
The Public Finance Management Act 2015 provides that for the avoidance of doubt, petroleum revenue shall be used for the financing of infrastructure and development projects of government and not the recurrent expenditure of the government.
In his audit report submitted to parliament in January 2019, auditor general, John Muwanga noted that there was no explicit mention of the fund as the source of funds but rather was disguised as medium-term expenditure framework for the financial years 2015/2016 to 2021/2022 submitted to parliament.
The summary of the fund's inflows and outflows indicates that the opening balance of the Petroleum Fund was Shs 30.92 billion on July 1, 2017. During the financial year 2017/2018, there was an inflow of Shs 121.84 billion and an outflow of Shs 30.92 billion transferred to the Uganda Consolidated Fund account.
This implied that the closing balance at the end of the financial year was Shs 121.84 billion. In the financial year 2018/2019, there was an inflow of Shs 37.51 billion in the fund bringing the total balance in the fund at Shs 158.84 billion.
However, this was further reduced with an outflow of Shs 148.32 billion transferred to the Uganda Consolidated Fund account.