The government has requested parliament for at least Shs 1.205 trillion to be spent to either buy out or prop up private companies where it has limited or unknown shareholding.
Last week, parliament received and considered a Shs 4.255 trillion supplementary budget in which at least Shs 1.205 trillion was to be spent on private companies. The biggest beneficiary of these companies is Umeme, the power distribution company whose contract with the government ended last week and was not renewed. In the supplementary budget, Umeme was given Shs 725.42 billion as a buyout.
Umeme has been managing power distribution in the country since 2004, when the then-government- owned Uganda Electricity Board (UEB) was broken apart. Other than Umeme, which was contracted to distribute power to the final consumer, three other agencies were created from UEB, which are, Uganda Electricity Transmission Company Limited, Uganda Electricity Distribution Company Limited and Uganda Electricity Generation Company Ltd.
The majority of the MPs who sit on the committee of the budget agreed with this expenditure without raising any objections. It is only the minority report signed only by the shadow minister of finance and Kira municipality MP Ibrahim Ssemujju Nganda that expressed reservation about the expenditure.
Ssemujju wondered why the government was spending such a colossal amount of money to buy out Umeme; yet in the past this has not happened with other companies whose concessions had not been renewed.
“In the supplementary, there is Shs 725.42 billion for the Umeme buyout. Energy minister Ruth Nankabirwa told the Budget committee that Umeme was demanding $225 million (Shs 832.5 billion), but after an audit, it was reduced to $190.9 million (Shs 725 billion). The minister of Energy told the committee that in the case of Eskom, when the concession ended, there was no buyout like was the case with Jacobsen Elektro,” Ssemujju said.
In 2022, the government, through Uganda Electricity Generation Company Limited (UEGCL), took over the management of the 50MW Namanve thermal plant from Jacobsen after 15 years. In the supplementary budget that was passed, there was also an inclusion of Shs 298 billion meant for Lubowa specialised hospital belonging to Italian investor Enrica Pinetti.
The majority of the MPs also passed it without any reservation despite the fact that in the past, parliament has been denied access to the construction site. In his minority report, Ssemujju argues that it’s wrong to continue spending taxpayers’ money on a project that the government is not even allowed to supervise.
“The auditor general’s report on treasury operations for the year ending June 2023 highlighted concerns that, although the owner’s engineer issued milestone certificates based on progress reports from the contractor, the engineer faced restricted access to the construction site.
This limitation undermined their role in safeguarding the interests of both the ministry of Health and the ministry of Finance… The audit further revealed that the milestone certificates were primarily based on contractor-submitted reports, engineer fees, and not the actual physical work completed… In light of these issues, there is a significant risk of financial loss for Ugandans if additional funding is allocated to the project. It is recommended that the project be halted until a special audit report is completed and parliament can deliberate on the findings.,” Ssemujju’s report objecting to the continued funding of Pinetti reads in part.
The supplementary budget also provided Shs 115 billion to the Atiak Sugar Factory owned by Somali-born Amina Moghe Hersi. The main report, other than saying that the factory, since the government acquired 40% of the ordinary shares, has been facing challenges such as failure to attain the planting needs, frequent fires, inadequate infrastructure, labour shortages and high cost of raw materials, it had no objection to the spending.
This brings the total amount of money that the government has invested in Atiak Sugar to Shs 668.710 billion. In his minority report, Ssemujju wondered how a government that has so far invested that amount vis- à-vis Hersi’s Shs 125 billion only owns 40% ordinary shares.
“Only a madman continues making such an investment. We are being taken for a ride. These sorts of agreements are the reason we have ended up where we are with Umeme,” Ssemujju said.
In the same budget, the government also provided Shs 67 billion for the Ntungamo coffee factory belonging to businessman Nelson Tugume. The money is meant to facilitate completion of standards and certifications, working capital to enable purchase of coffee from farmers, operational funds for running the coffee processing hub and marketing and branding.
The money is also meant for the provision of a power line. This brings the total to Shs 179 billion so far given to the Ntungamo coffee factory, also commonly known as Inspire Africa Coffee Park.
Other areas where money is being spent
The supplementary also provides Shs 367 billion for State House, which now brings the total to Shs 1.053 trillion given to them in the current budget. Parliament had approved Shs 452.2 billion for State House this financial year, but in January there was another request of Shs 234.75 billion that was also approved.
The majority report takes no exception to this request. However, Ssemujju wonders what State House is going to spend this money on, as almost all of it is under classified expenditure.
“You also need to take note that classified expenditure has become the code for syphoning taxpayers’ money. State House was given Shs 8 billion for classified in the budget. The subsequent two requests are all of classified nature, totalling Shs 600 billion, which is 57% of the total State House budget.
What is classified about a residence? We need to assign a parliamentary committee to interview our president and his wife to tell us what classified things they do at their residence that require Shs 600 billion,” Ssemujju said.
The supplementary budget also caters to Shs 186 billion given to the ministry of Defence and Veterans Affairs, also in classified expenditure; Shs 18.4 billion for the ministry of Internal Affairs to cater to the increased number of prisoners; Shs 61 billion for the ministry of Works and Transport for compensation; Shs 380 billion for Treasury operations; and Shs 190 billion for police operations, among other expenditures.
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And the taxpayers are dying of accident due to poor road condition, poor health facilities, hard to reach schools in northern uganda (8KM to and fro)….hmmm government
I thought Pinetti was history but it seems the godfathers are working their whatever you know off to rip off the country to the last nickel
That is what Uganda Parliament is all about. Playing about with tax payer’s money until these dodgy MPs drop dead!