While scrutinising the Budget Framework Paper for the 2021/2022 financial year, MPs queried the allocation of another Shillings 481 billion towards the recapitalization of Bank of Uganda (BoU) for the second consecutive year.
Henry
Musasizi, the Chairperson of Finance Committee of parliament is suspicious that
the government could be siphoning funds meant for the recapitalization of the
Central Bank.
He disclosed his
suspicions during a meeting between legislators on the Budget committee,
officials from the Ministry of finance and the National Planning Authority led
by Finance Minister, Matia Kasaija over the budget estimates for the next
financial year.
While scrutinising
the Budget Framework Paper for the 2021/2022 financial year, MPs queried the
allocation of another Shillings 481 billion towards the recapitalization of
Bank of Uganda (BoU) for the second consecutive year.
During the last budgeting cycle the Finance Committee approved a request to
recapitalize BoU with Shillings 481 billion in the 2020/2021 financial year.
The Committee Chairperson, Henry Musasizi explained in January last year that
recapitalizing BoU would not be done through appropriation of cash from the
Consolidated Fund but rather from the securities issued by the treasury.
Musasizi is now querying the request for another Shilling 481billion
in the next financial year, saying the figure is also projected in the
subsequent financial year. He wonders whether the recapitalization is now a
recurrent expenditure and wonders whether the ministry is using the item of
recapitalization to fund items hidden from parliament’s scrutiny.
//Cue in: “Mr. Chairman……………”
Cue out: “……………tell parliament.”//
The Vice Chairperson of the Budget committee, Patrick Isiagi asked the minister
to provide an explanation to the MPs on the continuous request for
recapitalization of the Central Bank.
//Cue in: “Then later on……………..”
Cue out: “……………and monitor.”//
In his response, the minister noted that just like any bank, the Central Bank
is required to maintain capital holding above a certain threshold and therefore
the government couldn’t risk allowing BoU to fall below the threshold.
Isiagi said the ministry has not provided any
study or analysis to justify why the Bank needs the exact amount of money it
received last year. He challenged the minister to produce models to justify the
allocation.
//Cue in: “How can you recapitalize…………..”
Cue out: “…………….recapitalization.”//
Kasaija told the MPs he was summoning an officer from Bank of Uganda to appear
before the MPs and provide answers to their queries. However, by the time the
committee adjourned for the day the officer had not arrived.
//Cue in: “We are………………”
Cue out: “…………proceed.”//
The committee is scheduled to present its report on the Budget Framework Paper
to the Plenary on Thursday at 2:00pm.
