Budget inflated by Shs470b – Daily Monitor

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The 2017/18 national Budget that Finance minister Matia Kasaija read on June 8 was secretly inflated by Shs470b, which the minister last night said was done without his knowledge.

This newspaper has established that Parliament approved Shs5.4 trillion for domestic debt refinancing under vote 030 for the Ministry of Finance, up from Shs4.99 trillion that had originally been budgeted with specifics of which creditors would be paid under the item.

It remained unclear how the additional Shs470 billion would be spent.

Top Finance ministry technocrats were to offer a coherent explanation, but contradicted one another about the origin of the anomaly in back-to-back meetings with our reporter yesterday.

Contradictions
Whereas the Accountant General, Mr Lawrence Semakula, for example, said he stood by the Shs5.4 trillion allocation, officials in Finance ministry’s macro-economic and debt department, who, unlike their line minister Kasaija, declined to speak on the record, said they could not explain the upward adjustment.

“The figure [allocated for domestic debt refinancing] I know is Shs4.9 trillion. Any other figure, which is given to you, I don’t know it. You can say that the Ministry of Finance is not aware of the Shs5.4 trillion,” minister Kasaija told this newspaper by telephone last night.

Mr Semakula, who reports to the Ministry of Finance Permanent Secretary Keith Muhakanizi, attributed the variation to “projections” and said Parliament had approved it, anyway.

“We go with our figure which was appropriated and which was reflected in the ministerial policy statement,” Mr Semakula said, without providing more specifics.

Parliament job
Under the amended Public Finance Management Act, Parliament now approves the Budget, as it did on May 31, ahead of its reading.

In yesterday’s interview at his office in Kampala, Mr Semakula said appropriation in the Budget doesn’t mean the money is available for spending and actual disbursements are subject to prevailing economic conditions.

Mr Semakula spoke to this newspaper on reference by Mr Muhakanizi who excused himself from commenting on the matter.

Official documents seen by this newspaper show that Parliament and the Finance ministry used the terms “domestic debt refinancing” and “redemptions” interchangeably in the Budget allocations to mean the same item, in this case, referring to payment of domestic debt.

A senior official in the ministry, however, said “debt redemption” is the full settlement of the principal borrowed fund, while “domestic debt financing” involves an arrangement where the government borrows to pay off an existing debt.

While reading the Shs29 trillion Budget last Thursday, Mr Kasaija said “domestic debt refinancing amounts to Shs4.99 trillion”.

Discrepancy
Ntenjeru North Amos Lugoloobi (NRM), who chairs Parliament’s Budget Committee, in a separate interview with this newspaper said the Finance ministry should “own up and explain the discrepancy”.

“The ministry should own up and explain the discrepancy; that is not the only discrepancy, there is another Shs40 billion that was double-counted,” said Mr Lugoloobi, without identifying the affected item.

Asked what happens to the difference of the Shs740 billion, Mr Lugoloobi said it will after all remain in the Consolidated Fund, and Finance officials will have to decide on whether or not to spend it.

“It will finally be with them (Finance); they have to choose either to leave it in the Consolidated Fund [or spend it],” he said.

His colleague Muhammad Kivumbi, who is also a member of the Budget Committee, described the anomaly as a “clever ploy to cause hemorrhage to public funds”.
“This is the hole where the public has been losing billions of shillings and it is regrettable that [the] Ministry of Finance has been hiding such [in] the hope that it will pass undetected,” he said.

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