Kadaga orders probe into missing Shs150b for drugs

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Speaker of Parliament Rebecca Kadaga has instructed the Committee on Commissions, Statutory Authorities and State Enterprises to investigate the mysterious disappearance of Shs150b meant for buying medicines.

Ministry of Finance officials received a loan of Shs150b from the Eastern and Southern African Trade and Development Bank (PTA Bank) for procurement of medicines and medical supplies for the National Medical Stores. However, they did not remit the money to NMS in accordance with the agreed terms of the funding.

Ms Kadaga received information that ministry of Finance obtained $42m (about Shs150b) in the name of NMS yet the corporation had requested for only $20m (about Shs68b).
Mr Nandala Mafabi (Budadiri West MP) and other MPs have described the issue as “a big scandal.”

This money was part of the disputed $200m loan for budget support where NMS, Rural Electrification and Transport sectors were lined up as the beneficiaries.

The Abdul Katuntu-led committee will investigate the matter immediately after concluding the oil cash bonanza inquiry. Mr Katuntu has promised to handle the matter “with the seriousness it deserves”.

Parliament approved the loan specifically for Health ($42.1m), Electricity ($2.8m) and Transport ($2.8m) sectors. However, the ministry of Finance officials claim the disputed loan was not meant to finance a particular project or entity like NMS, but for general budget support.

The NMS management insist the Finance officials used their documents to obtain the money from the bank arbitrarily.

The NMS has threatened not to supply medicines to at least 3,000 health centres starting July if ministry of Finance does not provide the drugs agency with Shs68b required to cover the shortfall in their budget.

Without explaining who specifically took the money for the medicines, Finance minister Matia Kasaija told Daily Monitor that the PTA loan was to help government whenever there was a transaction which required use of the US dollar currency in order not to stress the Shilling.

Director of Budget at the ministry of Finance Kenneth Mugambe corroborated Mr Kasaija’s statement, saying “the PTA loan had nothing to do with NMS.

He said the loan was simply for budget support and was not earmarked for a specific activity but government would use it for transactions in US dollars.

Secretary to the Treasury Keith Muhakanizi also told Daily Monitor that “the $97m released so far [out of the $200m] was deposited on the Consolidated Account.”

“I confirm that money has not been stolen. NMS, like any other government-funded entity, benefits from the loan since it is not meant for project support,” he said.

The NMS spokesperson, Mr Dan Kimosho, insisted the purpose of the loan was primarily to fund NMS and other selected infrastructure projects.

“We have heard, and seen documents and the money was released over and above our needs. We were told the money has been put into the Consolidated Account, but we have not received anything,” Mr Kimosho said.

When Bank of Uganda director of communications Christine Alupo was asked whether the loan money was still with the central bank, she was non-committal.

Parliament’s Public Accounts Committee also got interested after Sunday Monitor broke the story last week.

The committee has since taken up the matter and is investigating the controversies surrounding the transaction.
Ms Angeline Osegge, the PAC chairperson, said “the loan was processed for a particular purpose” and the issue of taking the money to the Consolidated Account should not arise.

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