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NRM Sets Up Committee to Probe PTA Loan Scandal

It is reported that after the loan application was rejected by Parliament on January 7, 2016, the Ministry of Finance amended the objective of the loan to indicate that money was urgently needed to procure medical supplies for the country. It was subsequently approved three months later.
Ministry of Finance Planning and Economic Developement

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The National Resistance Movement (NRM) Party caucus is setting up a committee to review queries on the USD 200 million loans from the East and Southern African Trade and Development Bank (PTA).

Parliament's Public Accounts Committee (PAC) last week recommended that the Finance Minister Matia Kasaija and the Secretary to the Treasury Keith Muhakanizi be sacked for misleading Parliament and obtaining the loan by false pretence.

The controversy stems from a 2016 loan application which sought to, among others, finance a shortfall in the domestic revenue which at that time was projected at 288 billion Shillings, substitute domestic borrowings amounting to 280 billion Shillings, finance the supplementary expenditure worth 156 billion Shillings and to finance expenditure pressures resulting from the exchange rate depreciation experienced during the 2015/16 financial year.

But Parliament rejected the loan application on condition that the objective of borrowing to stabilize the Shilling was unjustified. The same loan application had reportedly been rejected by the Central Bank Governor Emmanuel Tumusiime Mutebile, who advised that the country had sufficient foreign exchange reserves to support the needed interventions.

It is reported that after the loan application was rejected by Parliament on January 7, 2016, the Ministry of Finance amended the objective of the loan to indicate that money was urgently needed to procure medical supplies for the country. It was subsequently approved three months later.

However, National Medical Stores-NMS, which needed up to 156 billion Shillings to procure medicines, could not access the needed funding from the loan to purchase drugs, a development which affected medical supplies to government health facilities.

Now the ruling NRM party members have resolved to set up a special committee to probe the scandal before the matter returns to parliament. The decision followed a presentation on the same issue made by finance minister Matia Kasaija to the caucus.

"The loan was got to support the budget; we got the money and took it to the consolidated fund pool to support activities,” Kasaija reportedly told the caucus.

The State Minister of Finance for planning David Bahati says the committee will review and collate the various accounts from the Ministry of Finance to determine the degree of error by the finance ministry.

"It will look at the information and determine whether it is true or not, and what we wanted is to sort out these queries before we go to the house, Bahati said in an interview with journalists.

Robert Migadde, the Buvuma Islands MP says most of the caucus meeting was about the PAC report and issues of alleged corruption. He says he is not satisfied with the finance minister's accountability before the caucus.

 

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Kasaija was not readily available to comment on the matter.