Parliament has directed the Auditor General to conduct a special audit to ascertain the performance and use of the US Dollars 200 Million loan acquired from PTA Bank by Finance Ministry. Finance Minister Matia Kasaija is under fire together with the Secretary to the Treasury Keith Muhakanizi for misleading Parliament and obtaining the loan from the East and Southern African Trade and Development Bank PTA by false pretence.
Parliament has directed the Auditor General to conduct a special audit to ascertain the performance and use of the US Dollars 200 Million loan acquired from PTA Bank by Finance Ministry.
Finance Minister Matia Kasaija is under fire together with the Secretary to the Treasury Keith Muhakanizi for misleading Parliament and obtaining the loan from the East and Southern African Trade and Development Bank (PTA) by false pretence.
Last year, the Public Accounts Committee of parliament recommended the sacking of the two Finance Ministry officials due to the controversy surrounding the loan.
In 2016, the Ministry tabled a request before parliament to acquire a loan of 200 Dollars from the PTA bank. According to the request, the money was required to among other things finance a shortfall in domestic revenue, which was projected at Shillings 288 billion. It was also meant to 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 stabilise 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 Ministry Finance revised its objectives for applying for the loan and tabled a fresh request before the house for approval on January 7, 2016. The ministry argued 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 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, Minister Kasaija appeared before the house to explain why they duped parliament on the loan.
Speaker Rebecca Kadaga made a ruling today, Wednesday, calling for a special audit on the loan. She said the special audit will guide the House in debating the report of the committee as prepared. Kadaga directed the Auditor General to submit the report to her office by February 20, 2018.
She stayed the debate on the matter until March 28.
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Appearing before Parliament on Tuesday, Minister Kasaija also called for the audit, saying it will exonerate him. He told the House that the money was not obtained by false pretense and it was not misused.
According to Kadaga, findings from the committee indicated that the National Medical Stores didn't receive eight billion shillings that it was meant to receive. The Ministry of Finance gave a justification that the critical area for the loan was medical supplies which was not true, and that the Ministry did not inform the Agencies who were meant to get the money on the status of the funding.