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Kazibwe squanders SACCO’s Shs 300m

By Dicta Asiimwe

Former Vice President and now President Museveni’s advisor on microfinance Dr Specioza Wandira Kazibwe is again in the spotlight over abuse of public funds under the government’s Bonna Bagaggawale programme.

The money meant for people with disabilities (PWDs) in Busoga under the Bonna Bagaggawale (Prosperity-for-All) has sparked a controversy.

Alex Ndezi (MP for PWDs in Central Region) has accused the Microfinance Support Centre (MSC) of squandering the money meant for lending to people with disabilities in eastern region on useless items and activities.

Kazibwe heads the MSC, a government body under Ministry of Finance which was established to provide money to savings and credit cooperative organisations (SACCOs) for onward lending to people to eradicate poverty. The MSC was also charged with training the SACCOs on how to manage the disbursement and recovery of the government’s funds to and from the borrowers.

People with Disabilities in Busoga were asked to form a SACCO through which the money would be channeled to them. But the money has never reached the beneficiaries, something that has sparked uproar.

During a meeting called by the MSC and attended by MPs at the Parliament Conference last week, Ndezi accused the MSC of failing to pay out the money from the government to the intended beneficiaries in Eastern region.

According to Ndezi, the government had promised Shs400m to PWDs for development projects and parliament was planning to set up a committee to investigate the MSC on how it was using the money.

In reply to the accusations, Kazibwe said the government gave MSC only Shs300 million instead of Shs400 million and that her office was planning to deliver it to the PWDs in Busoga. However, Kazibwe said MSC had already used Shs117 million to buy a safe for the money, pay rent for office premises in Iganga, buy office equipment like chairs, computers and recruit and pay managers of the SACCO.

This is a sharp contradiction to what Kazibwe said on December 30, 2009, castigating previous microfinance institutions for squandering money meant for poverty eradication. Kazibwe told the press in Kampala that the money originally meant to uplift welfare of the rural population through microfinance institutions had always been misappropriated. ‘Money has not been reaching the poor, it has been stopping in the hands of technocrats in those institutions,’ Dr Kazibwe said. She said her MSC had been set up to cure this problem.

Kazibwe said the government through MSC had by December 22, 2009 disbursed Shs50 billion to over 580 SACCOs in Arua, Gulu, Hoima, Masaka, Moroto, Soroti, Wakiso and other districts to enhance SACCO growth, performance and participation in provision of financial services.

Ironically, Kazibwe’s MSC has now spent a staggering Shs117m (40%) of the Shs300m meant for PWDs in Busoga on technocrats and workshops, the same things she had accused previous SACCOs of doing.

Sources inside the MSC told The Independent that spending Shs117 million on paying SACCO technocrats portends to something fishy. The sources say that payment of SACCOs’ managers is the responsibility of the Uganda Cooperative Savings and Credit Union (UCSCU), not Microfinance Support Centre.

Ndezi says the decision to buy the office equipment was a creation by the government to steal money for PWDs. He argues that the PWD members of the SACCO had already bought their own chairs and had an office in addition to contributing their own Shs50 million.

Katuramu Hood (MP for PWDs in Western Region) said the PWDs had each contributed Shs25, 000 to the SACCO and each of them had bought a chair.

This is not the first time Kazibwe is accused of abusing public resources. In 2003 Kazibwe was accused of mismanaging the valley dams project, leading to the loss of Shs4 billion ($2 million) by the government when she was still Minister for Agriculture. Corruption at the time was so pronounced in the sector that some donors like the Swedish government withheld aid.

In February 2003 Kazibwe was accused of being among beneficiaries of fraudulent allocation of a government forest reserve in Mukono. The Forestry department, under the Ministry of Water and Environment, which has since been replaced by the National Forestry Authority, the District Forestry Services and the Forestry Support Services, came under fire in Parliament for allocating the forest reserve to big government officials including Kazibwe, to plant trees.

Poverty eradication programmes have become a huge source of self enrichment by government officials. A huge chunk of the money is spent on non-priority issues such as workshops, seminars, travel allowances, accommodation, and office equipment etc under the disguise of capacity building.

For instance, part of the Shs300m the government released for the PWDs was spent on a three-day workshop during the March 27-28 weekend in Mbale. The workshop was purportedly to train PWDs in the region on how to manage the borrowed money and their savings.

‘There is a workshop about this money in Mbale, get on a plane and you will know more about it,’ Julius Balyejjusa (MP for PWDs for Eastern region) said when The Independent asked whether the money had benefited his people.

Balyejjusa is one of the people who lobbied for the money from the government.

Some time back the youth in Busoga received Shs300m from then Minister of State for Microfinance Gen. Salim Saleh but the money was stolen by the officials in charge of distributing the funds. The money never benefitted the intended recipients.

Ndezi now says the government should not expect the PWDs in Busoga to pay back the money.

‘Our people understood that this money was a loan and were prepared to pay back. But how do you expect them to pay for an air conditioned office they were never interested in?’ Ndezi asked. The MSC lends money at 9% interest for agricultural SACCOs and 13% for business SACCOs.

Ndezi asked Kazibwe to explain how she expected the money to benefit the people considering the way MSC had spent it.

Safia Nalule, the female MP for PWDs, said her constituents had not received the money. She accused the Minister of State for PWDs and the Elderly, Suleiman Madada of handling the money project without involving the MPs for PWDs.

According to Kazibwe, at MSC they lend to well-established SACCOs. In 2009, she said this was the reason they had decided to introduce another SACCO to handle the money for Eastern region. She said the existing ones could not handle the funds well because they lacked proper management structures. She said Busoga SACCOs were not equipped to handle the money and the MSC encouraged people to start new ones for which the ministry opened offices.

However it’s the SACCO she initiated that is now accused of squandering PWDs’ money on wasteful expenditures.

Kazibwe insists there was no wrongdoing on the part of MSC in spending the money on training workshops and office equipment. She argues that the SACCOs needed capacity to manage the funds.

However, Ndezi alleges this is a conduit for government officials to swindle people’s money.

For instance in 2009/2010 the government allocated Shs24.9 billion for poverty eradication. But out of this Shs1.5 billion was spent on wages, water bills, and allowances for the MSC alone. A total of Shs 4.6 billion was spent on setting up SACCOs in sub-counties, while Shs11.9 billion was spent on ‘building’ capacity of the SACCOs. Another Shs1 billion was spent on general supply of goods and services. From the statistics, a staggering Shs19 billion (76%) of the Shs25 billion meant for poverty eradication was spent on ‘capacity building, office administration, and wages for the microfinance officials, leaving only Shs6 billion (24%) for lending to the people.

In 2008/2009 government provided Shs36.1 billion for micro-finance and the expenditure pattern was similar to that of last year.

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