Why Museveni fired Jamwa

Today, NSSF faces two choices: It can go to PPDA and ask for authority to carry out direct procurement so that Roko can finish the structure without any re-tendering; or it can allow Roko build up to the second floor and open the completion of the structure to competitive bidding. Sources say that Museveni was shocked by these issues and they formed a strong ground for his decision to suspend Jamwa.

The dossier on Jamwa also accused him of having suspicious dealings with a computer company, Comtel. According to the dossier, when Jamwa joined NSSF, he found the Fund in a quandary. It could not process payments fast and was unable to issue statements to its subscribers. An IT system had been installed by Face Technologies of South Africa without doing the finer details on it. So it developed problems. NSSF had decided to call FT back to finish the job, but Jamwa said he had better people in town. That is how Comtel came to do the job.

However, the chairman of Comtel, Ken Lubega, told The Independent that he did not know Jamwa before then. The job was advertised and Comtel bid and won. Comtel came in and did a review at $200,000 (about Shs 390m). The problem, the dossier claims, is that after the diagnosis of the problem, Jamwa extended Comtel’s contract to a phase where they would rectify the problem. The cost of this second phase was $7.1m (about Shs 13.5bn). All NSSF insiders say the work done by Comtel was excellent and saved the Fund from possible disaster.

However, Jamwa’s problem was he did not tender the second phase. State House investigators claimed that he was a secret partner in Comtel, a charge that Comtel denies. Thus, when Comtel recommended that NSSF does a Data Initiative Integrity exercise and Jamwa gave them a go-ahead, the project sparked resistance.

By law companies remit their staff savings to NSSF. However, the Fund was unable to properly record receipt of these monies, calculate interest on them and establish actual subscriber balances. So Comtel asked for $11m to do the job. Jamwa took the costing to the board which okayed it subject to PPDA approval. But that’s when the NSSF was plunged into the Temangalo controversy. The Fund was now forced to subject its contract to competitive bidding. Comtel became concerned about its image and withdrew from the exercise. However, NSSF insiders say Comtel is preparing a bid under a different name. But Comtel denies the claim.

The dossier on Jamwa further alleges that he made NSSF buy land on Plot 87, Lower Churchill Road in Gulu at Shs117m when NSSF valuers had priced it at between Shs 40m to Shs 60m. Jamwa was also accused of buying land on Plot 677 and 678, Kibuga in Najjanankumbi, Kampala. The three valuers sent by NSSF returned price estimates of Shs 120m (East African Consulting Surveyors), Shs 150m (Knight Frank) and Shs 540m (Bageine and Company), a strange discrepancy. Jamwa made NSSF buy it at Shs 400m. There is speculation that land belonged to Jamwa’s in-laws.

With these issues, people have wondered how Jamwa got the NSSF job. He was apparently appointed MD by Suruma after a competitive process. The others included the current MD of National Water and Sewerage Corporation, William Muheirwe, and another, Charles Ocici, of Enterprise Uganda. The three candidates were interviewed by PriceWaterhouseCoopers (PWC). Jamwa came best on all points except for management experience where Muheirwe performed better. The three of them were then interviewed by the NSSF board and again, Jamwa emerged best. It is then that Suruma went to Museveni for approval. He took only Jamwa’s name.

Sources at State House say that Suruma is also the one who suggested Mondo Kagonyera to be considered for Jamwa’s deputy. Museveni was facing a dilemma of where to place Kagonyera after he had lost NRM primaries for Rubabo County parliamentary seat in Rukungiri. Appointing Kagonyera as deputy NSSF MD offered Museveni an escape out of a dilemma over how to keep the old politician within the fold.

At the time, many people questioned PWC for their work. Jamwa had been an employee at PWC, growing to the level of partner. Then he left the audit firm on a mutual understanding. However, reports circulated that there was more to his exit, at such a senior rank, than met the eye. PWC had been the whistle blowers on the misuse of monies from the Global Fund for Malaria, AIDS and Tuberculosis in 2005.

The PWC made an investigation and told the commission of inquiry into abuse of the Global Fund money that Development Finance Company of Uganda (DFCU) bank was colluding with managers of the Global Fund to sell project dollars at below market rate and share the balance. At the time, Jamwa was the PWC auditor responsible for DFCU. It was discovered that he had taken a loan from DFCU, a clear conflict of interest. It means he was indebted to a bank he was auditing. It was alleged that his loan was even being serviced by the proceeds from the foreign exchange-deal the bank and the Global Fund managers were involved in.

According to the dossier sent to Museveni, PWC were reluctant to fire Jamwa openly as that would open a Pandora’s Box by bringing the name of PWC into disrepute. The dossier said that internally, PWC decided to present Jamwa’s exit as a result of ‘a mutual agreement.’ PWC deny this interpretation of events and insist that Jamwa left voluntarily. Apparently, those who prepared the dossier for Museveni did not buy PWC’s defence.

Meanwhile at NSSF, Jamwa faced his first test. When DFCU went into commercial banking, it was forced to sell its 50 per cent stake in Housing Finance Bank of Uganda now named Housing Finance Bank (HFB). NSSF bought this stake. The other partner in HFB was National Housing and Construction Corporation which owned 50 per cent shares.

From the mid 1990s to early 2000s, government sold pool houses and appointed HFB as collector of payments. By 2005, HFB had collected over Shs 30bn for government. Since government was not taking this money, HFB was lending it to customers, but it was reflected as a debt to government on its balance sheet. At the time, HFB was capitalised with only Shs1 billion. In the run-up to the 2006 elections, some people convinced Museveni that these monies be transformed into capitalisation for HFB to increase the supply of mortgage finance.

Since NSSF owned 50 per cent of HFB, it would be forced to match this Shs 30bn with an equivalent amount. If that happened, it would increase the supply of mortgage finance to Ugandans. Since many of the borrowers from HFB are subscribers to NSSF, this would be the most effective way to help them build real savings in the long term. Jamwa refused to put in more money. Instead he insisted that NSSF would also convert money it had lent to HFB into its share capital contribution. Thus, HFB was recapitalised on paper, but there was no new money to increase the supply of mortgage finance.

To increase the supply of mortgage money, HFB approached NSSF and asked for loans from the Fund. Sources in HFB and among other stakeholders claim that Jamwa blocked the move. Others allege that he insisted on getting a ‘commission.’ However, there was no evidence to this effect.

Sources told The Independent that Jamwa was involved in discussions with Suruma to use NSSF money to buy shares in the National Bank of Commerce (NBC) where both Mbabazi and Suruma are shareholders. This claim could not be independently verified.

According to sources, Suruma, Mbabazi and Nzeyi had two plans. The bank was owned 51 per cent by Indians who wanted to sell to Nigerians. But they had to give the first chance to existing shareholders ‘ hence the offer to Mbabazi and Nzeyi. Plan A was to sell land, buy Indians out of NBC and then immediately sell the bank to Arabs who were offering a better price. Plan B was that if the Arabs finally refused to buy, Suruma, through Jamwa, would get NSSF to buy the stake in NBC.

However, to the chagrin of Mbabazi, Nzeyi and Suruma, Jamwa hired auditors who gave an unfavourable assessment of the value of NBC, thus giving him space to refuse NSSF buying a stake in NBC. As it turned out, the Arabs declined to buy the NBC shares, thus sending Plan A into a tailspin. In his letter to Museveni, Jamwa actually cited the pressure exerted on him by Suruma to get NSSF to buy NBC shares.

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Jamwa is an enigmatic manager and many who have worked with him insist his outlook and business acumen is what NSSF needed. Indeed Jamwa’s lasting mark will be his aggressive revision of the Fund’s investment portfolio away from the conservative fixed assets to a more risky but higher yielding mix of 50% equities, 20% real estate, and 30% in fixed incomes.

Jamwa’s strategy was to garner an annual return of over 12% on the Fund’s assets. It involved investing abroad. In May 2008, the NSSF announced it had hit the Shs 1 trillion mark and increased the amount of interest paid on members’ savings to 14% from 7%.

In November the NSSF won the 2008 International Social Security Association (ISSA) Good Practice Award Africa for its ‘risk and change management.’ At a ceremony in Kigali, Rwanda, on November 18, 2008, NSSF’s best practices entitled ‘Enterprise-wide Risk Management’ was recognised as a model for Africa in the area of risk and change management.

Projects initiated by Jamwa include a US$1.95 million investment for 20% of the Kampala Serena Hotel, US$12 million in a National Farmers Association project, Shs 16 billion lent to the Uganda Revenue Authority (URA), and Shs 128 billion in the redevelopment of the National Theatre.

Nevertheless, two government agencies, the Auditor General and the Inspectorate of Government (IGG) have been instructed to do forensic audits of the cash advances and three projects undertaken by NSSF under Jamwa. They include a multi-million fleet management deal with Nissan Uganda, the procurement process of the Lumumba Avenue Pension Towers project, and the Comtel deal.