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MPs oppose Munyagwa’s moves to start a fresh COSASE probe on BoU

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Members of Parliament have opposed a move by the new Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) chairman, Hon Mubarak Munyagwa to open fresh inquiries into the closure of 7 defunct banks by Bank of Uganda (BoU).

According to reports by Daily Monitor, a local independent daily, on Tuesday, 28th May 2019, Munyagwa, also the Kawempe South MP, named a select sub-committee to carry out the inquiry. The five-member committee is headed by his vice chairperson, Mr Ibrahim Kasozi of Makindye East Constituency.

COSASE is also reported to have met with BOU officials led by the deputy Governor, Dr Louis Kasekende, and tasked them to respond to outstanding Auditor General’s queries, a move that some of the MPs have interpreted to mean, re-opening the probe that was concluded by then COSASE chairman and Bugweri County MP Abdu Katuntu.

Katuntu in his February 21 report found BoU’s closure of 7 defunct banks to be severally in breach of the Financial Institutions Act 2004, under which the same banks were closed. The Katuntu committee among other recommendations asked that the named errant BoU officials be held criminally liable and also proposed several reforms in the governance of the central bank.

The committee also recommended that the shareholders of the closed banks be compensated for the losses because BoU officials did not follow the due process.

UGX270 billion unaccounted for

During the course of the probe, COSASE on 20th December 2018 ordered a special audit by the Auditor General probe to among others, confirm the receipt and expenditure of the liquidity support and other intervention costs amounting to UGX478.8bn injected into Crane Bank by BoU between 20th October 2016 and 25th January 2017.  

The AG, however reported that out of the UGX478.8 billion, he could not trace the final destination of USD53.1m sent by Telegraphic Transfer from BoU’s Citi Bank Account and UGX77.5bn in cash from CBL currency centres to CBL’s 46 branches, altogether an equivalent of UGX270 billion.

The AG was also not able to establish whether the Statutory Manager of Crane Bank prepared financial statements in line with Section 90(4) of the FIA 2004, ascertain the liquidity position of CBL during statutory management period since the audited CBL annual report and financial statements for the period starting 1st January 2016 to 25th January 2017 were not submitted to BoU by KPMG, the external auditors.

Bank of Uganda, however in March, nearly a month after the COSASE probe had closed, attempted to submit the said accountability to the Auditor General for verification, but the AG declined saying the probe had closed and the report issued to the Rt. Hon Speaker of Parliament on 8th February 2018.”

MPs believe the May 28th move by Munyagwa to task Dr Kasekende to bring documents showing accountability for the Shs478b injected in Crane Bank, is solely designed to let BoU off the hook.   

Nwoya County MP Simon Oyet, told Daily Monitor that the move was against the rules of Parliament for COSASE to restart an investigation into matters that were concluded by the House without seeking new terms of reference from the Speaker.

“COSASE should focus their efforts in making sure that the recommendations of the committee are taken up by the responsible authorities in government. So, to carry out fresh investigations, they must seek permission from the Speaker,” he is quoted by Daily Monitor as saying.

Budadiri West MP Nandala Mafabi said there is need for the current chairperson to write to the Speaker specifying what exactly they want to tackle afresh.

Bukomansimbi South MP Deogratius Kiyingi told Daily Monitor that Munyagwa’s move was equivalent to “moving in circles.”

As Parliament, we concluded that matter and we are waiting for a report on the implementation of the recommendations by the Executive.”   

Ajuri County MP Hamson Obua, also told Daily Monitor that such a process, if allowed by the Speaker, would be a “duplication and wastage” of parliament’s resources and time.

Expedited COSASE recommendations

In a recent exclusive interview with CEO East Africa Magazine, the Speaker of Parliament, Rt Hon. Rebecca Kadaga said that parliament was waiting on the executive to take action on the recommendations of the Katuntu report.

She also implored the executive arm of government to expedite bills to reform several aspects governing the banking industry and the running of Bank of Uganda, as recommended by COSASE.

Kadaga, also expressed dissatisfaction and frustration at the executive’s speed in responding to Parliament’s recommendations especially in dealing with accountability issues.

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The Presidency

BUDGET: Kasaija to spend UGX982, 187 on every Ugandan in 2019/20

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Next year, in 2019/20, the government of Uganda plans to spend 23.8% more money than it has spent, this year financial year. According to a national budget read yesterday, by Finance, Planning and Economic Development (MoFPED) minister, Hon Matia Kasaija, Uganda will in 2019/20 spend UGX40.5 trillion, up from UGX32.7 trillion in 2018/19.

Given Uganda Bureau of Statistics (UBOS) population projections of 40 million and 41.2 million people for 2019 and 2020 respectively, that is an increase of 20.2% from UGX817,433 to UGX982,187.  

But where will he get this money from?

According to Kasaija, out of the UGX40.5 trillion, UGX20.9 trillion (51.6%) will be tax and non-tax revenue raised locally. As a result Uganda Revenue Authority (URA) must collect 25% more revenue- their targets have been raised from UGX16.4 trillion in 2018/19 to UGX20.45 trillion next financial year.

Hoima Substation, Hoima-Nkenda Transmission Line- UGXUGX3 trillion has been allocated to the energy and mineral development sector, UGX562 billion more than the UGX2.43 trillion allocated in 2018/19

KAsaija also expects to borrow UGX2.8 trillion (7%) from local financial markets. The finance minister also plans to borrow from external sources, as well as receive project support from Uganda’s foreign development partners, altogether, UGX9.4 trillion (15.9%).

He also expects general budget support of up to UGX675.2 billion (1.7%) and aid of up to UGX201.1 billion. 

Because of the heavy debt burden, domestic debt re-financing will account for UGX6.5 trillion or 15.9% of the resource envelope- this is not actual money though.

According to Kasaija, the stock of Government debt rose to UGX42.8 trillion (USD11.5 billion) as at end-December 2018, up by 15.1% from UGX37.2 billion (USD10.2 billion). Of this external debt constitutes is 66.5%- UGX28.4 trillion or USD7.7 billion.

How will the money be spent?

Thanks to a burgeoning debt and the attendant need to restructure, Uganda will spend UGX10.6 trillion on debt repayment.

Kasaija however insists that our debt, although high, it is still sustainable- at 41.8% of GDP in nominal terms and 31.7% of GDP in present value terms, as of December 2018. This is well below the threshold of 50% Debt to GDP ratio contained in the Charter for Fiscal Responsibility and the East African Community (EAC).

Part of the newly completed Soroti-Akisim-Moroto road in Karamoja. Government has allocated government has provided UGX1.67 trillion more money for roads, increasing by 35% the planned expenditure on roads to UGX6.46 trillion

Works and transport will take UGX6.46 trillion, while security will account for UGX3.62 trillion and education and sports UGX3.37 trillion. The government will spend UGX3.14 trillion on interest payments, UGX3 trillion on the energy and minerals sector, UGX2.62 trillion to health and UGX1.73 trillion to the Justice/Law and order sectors.

The accountability sector will be apportioned UGX1.54 trillion while local governments will get UGX1.25 trillion. The agriculture, animal industry and fisheries as well as water and environment sectors will each get UGX1.1 trillion. Others are: public administration (UGX979.1 billion), Public Sector Management (UGX857 billion), legislature (UGX687.8 billion) and Lands, Housing and Urban Development at UGX227 billion. Trade and industry will get UGX202.8 billion, social development UGX219.2billion, tourism will get UGX193.7 billion and Science, Technology and Innovation, UGX186 billion.

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Parliament

Kadaga teaches Munyagwa the constitution and parliament rules of procedure; declares BoU fresh probe as out of order and unconstitutional

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Kadaga has dismissed Munyagwa's revisionist BoU probe as out of order, unconstitutional and in breach of several parliamentary rules of procedure

The Speaker of Parliament, Rt. Hon Rebecca A. Kadaga has declared, new COSASE Chair, Hon Mubarak Munyangwa’s attempts to start a fresh probe on Bank of Uganda’s irregular closure of 7 commercial banks as “out of order” and in multiple breach of several parliamentary rules of procedure.

Kadaga, in her 10th June 2019 letter to Munyagwa, told him to “refrain from further proceeding” with the probe until “otherwise directed by the House.”  

It has been reported that Munyagwa is trying to assist Bank of Uganda officials to account for UGX478.8 billion, the central bank said it injected into Crane Bank between 20th October 2016 and 25th January 2017, but could not account fSor, when asked by Parliament to do so.

A 20th December 2018 audit by the Auditor General ordered by COSASE, then chaired by Munyagwa’s predecessor, Bugweri County, found that out of the UGX478.8 billion, an equivalent of UGX270 billion could not be traced to its final destination.   

TOUGH TALKING: Kadaga who has put all her anti-corruption efforts behind the BoU probe, says COSASE cannot probe BoU afresh when the earlier recommendations have not been acted on.

Analysts believe that to abet this anomaly, Munyagwa on Tuesday, 28th May 2019, hastily named a select sub-committee to probe what he says is “unfinished issues” in the BoU probe. The five-member committee is headed by his vice chairperson, Mr Ibrahim Kasozi of Makindye East Constituency and has since met with BOU officials led by the deputy Governor, Dr Louis Kasekende, and tasked them to respond to outstanding Auditor General’s queries, a move that some of the MPs have interpreted to mean, re-opening the probe that was concluded by then COSASE chairman and Bugweri County MP Abdu Katuntu.

Munyagwa’s moves also sparked off a public outcry and subsequently 2 members of the public petitioned the speaker on 29th and 31st May 2019 asking her to intervene.

Breach of parliamentary rules of procedure

In her letter titled: “RE-OPENING THE INVESTIGATION INTO THE BANK OF UGANDA CLOSURE OF COMMERCIAL BANKS BY THE COMMITTEE ON COMMISSIONS, STATE AUTHORITIES AND STATE ENTERPRISES,” Kadaga told Munyagwa that constitutionally COSASE’s powers are drawn from the larger House and that its work is drawn from reports of the Auditor General in exercise of his/her constitutional mandate under Article 163 of the Constitution of the Republic of Uganda.

She also guided that the said AG reports have to be adopted by the house who then delegate any reviews of the reports to COSASE. 

“Under rule 178 (4) the committee, upon receipt of the Auditor General’s report, is required to consider and examine the recommendations of the Auditor General and thereafter under rule 178 (5) to lay the report of the committee on the table for purposes of debate by the House under clause (5) of article 163 of the Constitution. Once the committee, as a delegate of the House, has tabled a report for debate, it has sufficiently discharged its burden and the report becomes property of the House,” Kadaga guided.

“Upon so doing if the report is adopted (like was the case in the matters of closure of commercial banks by bank of Uganda) it becomes a report of the Parliament of Uganda. The committee then stands discharged in respect of any authority of the House on the subject matter of the report,” Kadaga wrote,

She further told Munyagwa that: “It is evident that no other report has been authored by the Auditor General to Parliament in respect to closure of commercial banks in Uganda by Bank of Uganda to warrant an inquiry into the same by the committee. Similarly, no authority of the House has been granted to freshly investigate the closure of commercial banks.”

Kadaga has dismissed Munyagwa’s revisionist BoU probe as out of order, unconstitutional and in breach of several parliamentary rules of procedure

“Please be further advised that once the recommendations were adopted, it is incumbent upon the Government to respond by way of a Treasury Memorandum, which has not yet been done.”

“In light of the above findings, I am of the firm opinion that your action in trying to re-open a matter that has already been substantively considered and finalised by Parliament in the very recent past, in the absence of a fresh report of the Auditor General on the subject or authority of the House, whose the delegate the committee is, is not founded in the constitution or indeed in the rules of procedure of Parliament,” Kadaga ruled.  

“I finally wish to draw your attention to Rule 219 of the Rules of Procedure which provides as follows:

“(It is out of order to attempt to reconsider any specific question on which the House has come to a conclusion during the current Session.” It is evident that you are in breach of Rule 219.

I also draw your attention to Rule 219(2) “Notwithstanding sub-rule 1 the House may reconsider any question upon which a decision has been taken by the House if the motion for revision is taken by a vote of half of all Members of Parliament participating in that decision,” Kadaga went on to school Munyagwa.

“I note that no motion was moved either by you as Chairperson or by any other Member to that effect. I therefore propose and guide that you should refrain from further proceeding in relation to this matter until otherwise directed by the House,” she ruled.

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Parliament

Fresh COSASE probe on BoU by Munyagwa is wrong and I will stop it- Kadaga

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TOUGH TALKING: Kadaga who has put all her anti-corruption efforts behind the BoU probe, says COSASE cannot probe BoU afresh when the earlier recommendations have not been acted on.

“I met her today; the Speaker disagrees with what’s going on and she has said she is going to write officially and stop him (Munyagwa). She said, under the law, he cannot duplicate the work; more so when the House is waiting for a formal response, on the recommendations,” said Sam Obbo, the Press Secretary to the Speaker of Parliament.

The Speaker of Parliament, Rt. Hon. Rebecca Kadaga is opposed to planned moves by the new Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) Chairman, Hon Mubarak Munyagwa to start an equivalent of a fresh probe into Bank of Uganda and has vowed to stop it.

The Speaker of Parliament has vowed to stop Hon Munyagwa’s move to re-open the COSASE probe into BoU. The move had earlier attracted sharp criticism from fellow MPs, who say COSASE should now focus on making sure the earlier recommendations by COSASE are implemented by the executive arm of government. Members of the public have also petition the Speaker against the move they say is duplicitous.

In a phone conversation with CEO East Africa Magazine, Sam Obbo, the Press Secretary to the Speaker said: “The Speaker disagrees with what’s going on and she has said she is going to write officially and stop him (Munyagwa),” Obbo said, adding: “She (Kadaga) said, under the law, he cannot duplicate the work; more so when the House is waiting for a formal response, on the recommendations.”

KAdaga’s comments come in the wake of two separate petitions to the Speaker by concerned Ugandans- a Mr Michael Businge a resident of Nsambya, a suburb of Kampala and a Mr. Sam Kakuru a student of Uganda Christian University who argue that COSASE’s attempt to probe BoU afresh when the current recommendations have not been acted upon are a waste of taxpayer’s money and a possible “syndicated move to put the responsible offices off the hook.”  

According to reports by Daily Monitor, a local independent daily, on Tuesday, 28th May 2019, Munyagwa, also the Kawempe South MP, named a select sub-committee to probe what he says were unconcluded issues in the BoU probe. The five-member committee is headed by his vice chairperson, Mr Ibrahim Kasozi of Makindye East Constituency.

COSASE is also reported to have met with BOU officials led by the deputy Governor, Dr Louis Kasekende, and tasked them to respond to outstanding Auditor General’s queries, a move that some of the MPs have interpreted to mean, re-opening the probe that was concluded by then COSASE chairman and Bugweri County MP Abdu Katuntu.

Katuntu in his February 21 report found BoU’s closure of 7 defunct banks to be severally in breach of the Financial Institutions Act 2004, under which the same banks were closed. The Katuntu committee among other recommendations asked that the named errant BoU officials be held criminally liable and also proposed several reforms in the governance of the central bank.

The committee also recommended that the shareholders of the closed banks be compensated for the losses because BoU officials did not follow the due process.

One of the major findings during the probe was UGX270 billion in untraceable funds, out of the  UGX478.8bn that BoU is said to have injected into rescuing Crane Bank.  

Several MPs including  Nwoya County MP Simon Oyet, Budadiri West MP Nandala Mafabi, Bukomansimbi South MP Deogratius Kiyingi and Ajuri County MP Hamson Obua said the fresh probe was suspicious, a duplication and wastage of resources and time.

In a recent exclusive interview with CEO East Africa Magazine, the Speaker of Parliament, Rt Hon. Rebecca Kadaga said that parliament was waiting on the executive to take action on the recommendations of the Katuntu report.  

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