Accountant General blamed for mess in South Sudan compensation

The controversy shrouding compensation of Ugandan traders that suffered losses during the South Sudan conflict has taken a new twist with the state minister for finance (Planning), David Bahati faulting the Accountant General, Lawrence Semakula for failing to do due diligence on 10 companies that have so far been paid.

Bahati said that whereas it was prudent that the sh40b partial payment to the 10 companies be done after a thorough background check on the beneficiaries, the accountant general who actualised the payment sidestepped that part of the process.

The remarks were made last week during an interface with a select committee of Parliament investigating circumstances under which the Ministry of Finance exclusively paid out the sh40b off the $41m (about sh150b) compensation kitty to only 10 companies leaving out 23 others that have equally been verified.

The Masaka Municipality MP, Mathias Mpuuga had earlier tasked Bahati to explain the stage at which the ministry had run a company search with Uganda Registration Services Bureau (URSB) to know the legality of the companies that were being paid and whether they were tax complaint to warrant public resources.

In response, Bahati said, "The search was done after the payment because an MP had raised a red flag during plenary that they were briefcase companies. Our concern was having these guys paid because the ministry of trade and the government of South Sudan had already verified them. "

"At the ministerial level, we deal with policy and at that point, our concern as the bilateral agreement and it is what we used as a checklist. It had the list of the 10 companies so whether they are tax compliant or legally registered, was for the accountant general," he added.

When contacted, Semakula said that the ball was in the minister's court at the signing of the bilateral agreement to ensure it was watertight to the benefit of the taxpayers.

"The bilateral agreement was clear that all you needed to pay was joint verification of the claiming companies and a sovereign guarantee from South Sudan was my due diligence. If it was necessary to ensure that the companies are legal and tax compliant, that wasn't my role, it should have been done during the signing of the agreement so I based payment on what the ministers had put on paper," Semakula explained.

Quick scrutiny of the search report from URSB for particulars of 10 company directors reveals that companies such as Rubya Investors Ltd, Aponye (U) Ltd and Apo General Agencies Ltd interchangeably share directors.

The report also indicates that Swift Commodities Ltd is owned by Godfrey Kalule Kirumira and Anil Sunderji but when contacted, Kirumira was furious that his now defunct company is being used for selfish gains.

In 2010, Government of South Sudan verified loss claims of Ugandan traders, leading to a memorandum of understanding with Uganda for a phased settlement of $56m (about Sh207b) that the traders were demanding however, South Sudan managed to pay only $15m (about Sh55b) to 10 companies, leaving a balance of $41.6m (about Sh150b).

Subsequently, Uganda signed a bilateral agreement with South Sudan for the latter to pay off the Sh150b balance and await reimbursement from the former, however; parliament while approving the agreement, said that payment should only be made with an addendum of 23 companies to the list of 10.

Government's decision to pay only 10 companies prompted the establishment of the select committee chaired by Kyankwanzi woman MP, Ruth Nankabirwa to among others, to lift the veil on the legitimacy of the beneficiaries and probe allegations that partial payment of Sh40b to the 10 companies was marred by irregularities.

Appearing before the committee last week, Chris Kaijuka the chairperson of the 10 companies insisted that the $56m is exclusively meant for them who supplied the strategic grain reserve of South Sudan under their umbrella body, Uganda Southern Sudan Grain Traders and Suppliers Association.

According to Nankabirwa, even among the 23 companies that have been left out of the compensation, there are those with documentary evidence indicating that they also who supplied the strategic grain reserve of South Sudan.

Bahati demystified claims that the 23 companies have unfairly left out of the compensation, saying that, although they have already been verified by the ministry of trade in Uganda, their payment awaits verification by South Sudan and another sovereign guarantee.

On his part, the Attorney General, William Byaruhanga said that although at the signing of the bilateral agreement, the 10 companies had already been jointly verified and qualified for the compensation, the priority of payment can change to focus on the companies left out if the resource envelope allows.

"Hypothetically speaking if the remaining balance of $31m (about Sh115b) is available, I see no reason why the list of claimants can't be flipped to pay the 23 companies for purposes of equity but of course joint verification will be key," Byaruhanga opined.