The Ministry of Finance officials on Thursday failed to explain to the parliamentary Public Accounts Committee (PAC) how the 10 billion shillings meant for small income earners was disbursed.
The 10 billion shillings was supposed to be given to over 1.5 million vendors in 404 markets countrywide. The Ministry of Finance was required to provide overall supervision as the Savings and Credit Cooperatives (SACCOs) directly disburse to the economic agencies.
The Ministry officials before PAC included Keith Muhakanizi, the Permanent Secretary, Betty Kasimbazi, an Under-Secretary at the ministry and Henry Mbaguta, the assistant commissioner in charge of microfinance.
On February 14, 2011 Ignatius Rwabukuku, former head of Microfinance Support Centre, wrote to Mbaguta seeking clear guidelines and modalities of disbursing the money. In his letter, he stated that they have evidently been receiving mixed signals from different stakeholders to the effect that this fund is a grant.
He added that if that be the case, then they require guidelines considering that the activity is not on the budget line. Rwabukuku also requested to sign a memorandum of understanding to spell out terms and conditions of managing the fund.
On the same day, Muhakanizi responded stating that the purpose of the fund is to empower market vendors and small business operators to form a critical mass of clients to their ongoing financial services infrastructure of SACCOs. The then deputy Permanent Secretary explained that the programme had been a key pre-occupation of government to achieve Prosperity for All since 2004.
The decision to release the money stemmed from a meeting held on December 1, 2010 chaired by then state minister for microfinance Ruth Nankabirwa. Among other things, government prepared a supplementary budget worth 600 billion shillings which included money for the markets.
However, for the past two weeks several market chairmen who have appeared before PAC explained that they received the money as a political appreciation token from President Yoweri Museveni just a few days before the elections. They wondered why they are now being asked to pay back yet they were told it was not a loan and that they were used as conduits to pass the money to the beneficiaries.
The committee’s legal counsel Maxwell Akora, who is also Maruzi County MP, asked Muhakanizi whether the appropriation was political or technical to which Muhakanizi responded that many decisions are political.
Even though the Microfinance Support Centre was supposed to manage the funds according to their guidelines, the Ministry of Finance instead hijacked the process and allegedly gave them a whole new list of beneficiaries.
However, Muhakanizi denied responsibility for the mismanagement of the funds saying the microfinance centre must account for the money, a comment that angered Serere Woman MP Alice Alaso.
Kasimbazi, who wrote to the microfinance support centre telling them about the disbursement, was then held liable for the loss of the money.
According to the Auditor General’s report, the ministry of finance also benefited from the money by taking 178 million for implementation and 239 million for workshops.
Mbaguta explained that the money was for post-inspection activities. Earlier the soft spoken Kasimbazi had however said that when they received the money they passed it on to the Microfinance support centre.