MPs refuse government to borrow money without their approval

By John Odyek, Moses Mulondo and Henry Ssekanjako

MPs have refused to allow government to use funds from Bank of Uganda without their approval saying the action could lead Bank of Uganda to bankruptcy, high domestic debts and breed corruption.

The MPs were debating The Public Finance Management Amendment Bill, 2015 which among other changes, seeks to give government a lee way to use money from Bank of Uganda without seeking parliamentary approval. 

Parliament reconvened from recess to consider various amendments to the Bill which was assented to at the end of February this year.

The Civil Society Budget Advocacy Group (CSBAG) have opposed various amendments arguing to the Bill which they say are aimed at loosening controls in the Act which safeguard public funds from being misused.

CSBAG coordinator Julius Mukunda said, "From the amendments proposed, it is clear that the intention of the executive is to loosen controls that were put in the Act. Removing controls from our Public Finance Management system has potential to perpetuate gross abuse of public resources."

On the proposal to allow government get loans from bank of Uganda without parliamentary approval, CSBAG said, "The amendment undermines the role of parliament to approve all loans. Allowing this move may amount to giving a blank cheque to the government outside prior approval of parliament."

On the amendment of section 25 to re-open the window for supplementary budgets, CSBAG through Mukunda said, "The current section subjects supplementary requests to be laid before parliament for approval and yet the Bill seeks to allow government to spend money and seek approval later. This is bad practice and perpetuates abuse especially during the elections where the appetite to spend is high."

The state minister for finance David Bahati explained that the requirement for a certificate of compliance for gender and equity responsiveness for every vote of the over 300 votes/entities is not practical and delays the submission of ministerial policy statements.

The Bill contains an amendment to section 17 of the Act to provide for an extension of four months for an entity to spend money allocated to it which it may not have spent at the end of a financial year to cater for settlement of outstanding payments and obligations.

The Act in its current state states that a vote that does not expend money that was appropriated to it for the financial shall by July 31 of the following financial year repay the money to the consolidated fund.

Geoffrey Ekanya said allowing government to borrow from Bank of Uganda led to excesses and had over the last decade led the Bank to be in red. Ekanya said Bank of Uganda had to be recapitalized and the new law had curbed this practice.

Ekanya cited past incidents like the sh2trillion government got from Bank of Uganda to buy fighter jets and the sh142b dispensed to compensate Hassan Basajjabalaba as proof that loosening the tight controls in the Bill would subject public funds to misuse. 

Finance minister Matia Kasaija said there were times the government had no money collected by Uganda Revenue and that was when the need to borrow arises. Kasaija said at the beginning of this year the government was literally broke. Kasaija promised that the borrowing would have terms and conditions and would not be exceeded. He asked Parliament to approve the borrowing.