By Mary Karugaba

Government has still failed to locate properties belonging to city businessman Hassan Basajjabala whose titles are in custody of Bank of Uganda.

This was revealed Wednesday after the Public Accounts Committee asked Bank of Uganda and Ministry of Finance officials headed by the deputy secretary to treasury Keith Muhakanizi to explain the current state of the properties, where they are located and whether they are still in the names of Basajjabalaba.

"Bank of Uganda is holding on the titles as security for the sh21b given to Basajja by Government, but do you know where they are, who owns them and who collects rent from them?” committee chairman Kassiano Wadri asked.

“How sure are you that they still exist and are still in the names of Basajjabala?"

The MPs also asked the officials to explain whether the value of the properties is equal to the sh21b that Government gave Basajjabalaba to clear his debts with several commercial banks.

"Prior to clearing the debts, did you do any evaluation to ascertain that the properties were worth sh21b? You could be clinging to titles that are only worth sh1b," Paul Mwiru commented.

Muhakanizi though insisted that the properties exist and they are in the names of Government, and said he needed more time to know their status. He amused members when he failed to name an officer in charge of the properties.

"May be the Accountant General (Gastavio Bwoch) knows," he said, passing on the microphone.

Bwoch said: "I don't know where they are and who is in charge," he said, causing a barricade of questions from the committee members while others accused the officials of negligence.

Bank of Uganda legal officer Margaret Kasule said: "At the time of the payment, we did not do any evaluation."

The MPs demanded to know why Basajjabala's titles were still with BOU and instead of Uganda Lands Commission, the custodian of government land. They also demanded to know why it has taken Government years to force Basajjabala to pay the debt.

"I will check with the system to see why we have taken long to take action," Muhakanizi said, to the amusement of members.

Kassiano directed that Parliament Criminal investigations Department takes the matter and verifies the authenticity of the titles, the presence of the properties and who collects the rent. 

According to Bank of Uganda, some of the properties include buildings in the city, land in Munyonyo and others. 

He explained that Basajjabalaba was given sh21b on the understanding that when Government compensates him with sh46b for the loss of city markets, the money will be deducted immediately.

Muhakanizi was also tasked to explain why Government borrowed sh414b from Bank of Uganda to purchase military jets without parliamentary approval.

Muhakanizi apologised saying the Government acted outside the law, but it was for security purposes.

"I sincerely apologise for acting outside the law but because of security reasons, we could not come to the public and announce that we need money to purchase jets. However, later my bosses came and apologised to Parliament and passed the money," he said.

When MPs demanded to know whether Muhakanizi advised the President that the borrowing was outside the law, Muhakanizi pleaded," you are squeezing me too much."

The plea unfortunately fell on deaf ears as MPs continued to bombard him with questions on the state of the economy and the issues that caused economic instability last financial year.

According to the Auditor General's report to Parliament, in the early 1990s, Government used Treasury Bills/Treasury Bonds as monetary policy instruments to sterilise excess structural liquidity.

However, of recent, the instrument has been playing dual liquidity management and deficit financing roles, which creates conflict between the fiscal and monetary policies.

As a result, the MPs complained that the policies led to too much money in circulation leading to high interest and inflation rates.

Bwoch told the members that Government had to incur sh5b to mop up the excess liquidity.

Muhakanizi apologised to the Committee for the economic mess that occurred and vowed that it would never happen again.

"I am truly sorry that this problem was caused by the excess borrowing from Bank of Uganda that was above the 18% stipulated in the Bank act. However, we have rectified the problem through proposed amendment to the act and this problem will not occur again," he said.