Kampala, Uganda | THE INDEPENDENT | The Ministry of Lands ministry has attributed the high debt in domestic arrears on compensation claims by former ranchers who lost land to government.
This was revealed during a meeting between officials from the Ministry of Lands, Housing and Urban Development led by the Permanent Secretary Dorcus Okalany over the June 2018 audit queries raised by Auditor General John Muwanga.
In his report, Muwanga noted that the Ministry had irregularly incurred domestic arrears amounting to 26.13 billion shillings in the financial year 2017/2018.
According to the Auditor General, the 26.13 billion was irregularly incurred as domestic arrears outside the approved estimates appropriated by Parliament and consequently, an increase in domestic arrears during the year from the previous figure of 9.19 billion to 31.03 billion.
“The increase was mainly in relation to revaluation of ranches due to delayed settlement of the ranchers’ compensation claims dating back as 2005 ( a delay of 13 years). This makes the trend unsustainable and I further observed that there was no budget provision for settlement of domestic arrears totalling to 4.302 billion implying that funds for other planned activities were diverted for settling the obligation,” reads part of the Auditor General report.
Muwanga also reported that the Ministry did not have set criteria or guidelines to be followed in settling ranchers’ claims as this was done haphazardly rather than following “first come first serve” basis. He says that this has caused further escalation of compensation costs through litigation which may not be sustainable.
Tasked by MPs sitting on PAC to explain why the domestic arrears figure was alarming, Okalany stated that the ranchers have never been compensated ever since valuation was done over 10 years ago and the value of land keeps appreciating.
Okalany told the committee that some of the claimants have gone to court and been awarded huge costs thus pushing up the arrears even further.
She said that in order to address the challenge and avoid loss from further appreciation of the ranches, there was need to clear the compensation with a lump sum appropriation of funds by government.
Bunyole West MP James Waluswaka noted that he had knowledge of allegations that only those who are able to provide kickbacks are compensated, but this was refuted by Okalany.
PAC Chairperson Nathan Nandala Mafabi asked for an updated list of all ranchers before it can make a decision on the matter. Okalany said audit firm Ernst and Young had been contracted to carry out a fresh valuation exercise in order to assist the ministry in its compensation process.