PTA Loan: Minister Kasaija Proposes Audit

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In short
Kasaija said when Parliament rejected the loan on the recommendation of BOU, they returned with a loan brief indicating that the money was for budget support.

The Minister of Finance, Planning and Economic Development, Matia Kasaija has proposed an audit into how the US$ 200M PTA bank loan was used, saying it will clear his name. 

Kasaija is under fire together with the Finance Ministry, Permanent Secretary, and Keith Muhakanizi from parliament for misleading the house and obtaining the loan from the East and Southern African Trade and Development Bank (PTA) by false pretense. 
 
 
Last year, the Public Accounts Committee recommended the sacking of the two Finance Ministry officials due to the controversy surrounding the loan. In 2016, the Finance Ministry tabled a request before parliament to borrow a loan of US$ 200 from the PTA bank. 



According to the request, the money was required to among other things to finance a shortfall in domestic revenue, which was projected at Shillings 288 billion, substitute domestic borrowings amounting to Shillings 280 billion, finance supplementary expenditure worth Shillings 156 billion and to finance expenditure pressures resulting from the depreciation of the exchange rate during the 2015/16 financial year. 

 
However, parliament declined to approve the loan request, saying that the claim to to stabilize the Shilling was unjustified. The same loan application had reportedly been rejected by the Central Bank Governor, Emmanuel Tumusiime Mutebile, saying the country had sufficient foreign exchange reserves to support the needed interventions.



However, the Finance Ministry revised its objectives for applying for the loan and tabled a fresh request before the house for approval on January 7, 2016 arguing that the money was needed urgently to procure medical supplies for the country.  Parliament subsequently approved the loan request.

 
The issue of the loan returned to the limelight after the National Medical Stores-NMS complained that it had failed to secure up to Shillings 156 billion, which was part of the loan meant to procure medicines. As a result, parliament tasked the Finance, Planning and Economic Development Ministry officials to explain what happened to the money.
 

 
Parliament also tasked the Public Accounts Committee to inquire into the loan, which recommended the sacking of the officials. On Tuesday, Kasaija appeared before the house to explain why they duped parliament on the loan.
 
 
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He also disclosed that he had already contacted the Auditor General to conduct an audit into the money since there are claims that it was put to its intended use.

 
However, the Bukoto East MP, Florence Namayanja interjected the Minister, saying Bank of Uganda had advised the minister against borrowing the loan, saying the bank still had US$ 2.8 billion and there was no need to mobilize additional resources from the PTA loan.
 

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In his response, Kasaija said when Parliament rejected the loan on the recommendation of  BOU, they returned with a loan brief indicating that the money was for budget support.
 
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The Ntungamo Municipality MP, Gerald Karuhanga hit at the minister, saying he wasn't telling parliament the truth.

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The Speaker, Rebecca Kadaga deferred the matter, saying she will go back to the handsard to study the language used in the first and second loan requests before she can make a ruling on Wednesday.

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About the author

Alex Otto
“Journalism that changes lives is my goal,” Alex Otto has said on more than one occasion. That is his career’s guiding principle. Has been since he was a radio journalist in the northern Ugandan town of Gulu in 2009.

Otto passionately believes his journalism should bring to the fore the voices of the voiceless like the shooting victims of Apaa. Otto tries in his journalism to ask tough questions to those in positions of authority.

Based in the Kampala bureau, Otto is especially interested in covering agriculture, politics, education, human rights, crime, environment and business. He has reported intensively on the post-conflict situation in northern Uganda.

A URN staff member since 2014, Otto previously worked with The Observer Newspaper from 2012 to 2013 and later the Institute for War and Peace Reporting IWPR based in Gulu.

He was the URN Gulu bureau chief 2014-2016.