Finance Ministry On The Spot Over NMS UGX 156B

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In short
But during cross examination by Gerald Karuhanga, the PAC vice chairperson, NMS officials insisted that they have never received any funds despite receiving confirmation from the Finance Ministry that the money was ready.

The Finance Ministry has failed to release Shillings 156-billion to the National Medical Stores for the purchase of drugs despite receiving a loan disbursement from the Preferential Trade Are-PTA Bank. The Shillings 156 billion is part of the US$ 200-million loan government secured from the Preferential Trade Are-PTA Bank.

 
 
The money was also meant to finance a shortfall in domestic revenue that was projected at Shillings 288 billion Shillings for 2015/2016 financial year and substitute domestic borrowing to the tune of Shillings 280 billion. The money was also meant to ease finance expenditure pressure resulting from the exchange rate depreciation in the 2015/2016 financial. 

 
However, to date the Finance Ministry has failed to release the Shillings 156 billion meant for NMS. Recently, NMS announced a shortfall of Shillings 68 billion citing fluctuation in foreign exchange since 2011, which has affected supply of drugs and medical supplies to government health facilities.
 

On Wednesday, the Health Ministry Permanent Secretary, Diana Atwine and the NMS Corporation Secretary Apollo Mwesigye appeared before the Public Accounts Committee to testify about Shillings 156-billion loan approved by the Ninth Parliament to help NMS procure drugs.

 
They appeared alongside the Bank of Uganda Governor, Tumusiime Mutebile, Auditor General, John Muwanga, and the Secretary to the Treasury Keith Muhakanizi.


During the meeting, Mutebile told PAC that the Central Bank received a US$ 97M as part of the US$ 200- million loan from the PTA bank and transferred it to the consolidated bank with the accompanying instructions.

 
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Joyce Okello, the Director of the National Payments Systems Department in BOU further explained to PAC that out of the US$30M of the US$97M an equivalent to Shillings 150 billion Shillings was payment for NMS.

 
"Normally there is additional information attached to the swift message to explain the purpose of the money in accordance with anti-money laundering laws, in this particular case, the details that were given were that it is a payment for NMS." Okello told PAC. She also noted that also another US$12 million was also for payment to NMS.
 

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But during cross examination by Gerald Karuhanga, the PAC vice chairperson, NMS officials insisted that they have never received any funds despite receiving confirmation from the Finance Ministry that the money was ready.


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The Auditor General, John Muwanga told the Committee that he issued Audit warrants authorizing withdrawal of the money from the consolidated fund but will only be able to ascertain whether or not it was misused after a complete audit is done.

 
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The revelations drew angry reactions from the Committee members including Matthias Mpuuga and Keffa Kiwanuka. They demanded that Keith Muhakanizi, the Secretary to the Treasury and Accountant General, Lawrence Ssemakula substantiate on the claims by NMS. Muhakanizi insisted that he released the money as instructed.

 
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The Committee resolved to summon Finance Minister, Matia Kasaija to explain the disbursements made to NMS and other entities.

 

About the author

Olive Nakatudde
Olive Nakatudde is a URN journalist based in Kampala. Nakatudde has been a URN staff member since 2013.

Nakatudde started out in journalism in 2009 with Dembe FM radio in Kampala. In 2012, Nakatudde joined Voice of Africa as a political reporter. She has been a photographer since her journalism school days at Makerere University.

Nakatudde is interested in good governance and public policy, which she reports on intensively from the Uganda Parliament. She is a keen follower of cultural affairs in Buganda Kingdom and covers the kingdom's Lukiiko (parliament). Nakatudde also reports on education and health.