Kampala, Uganda | THE INDEPENDENT | The Permanent Secretary Ministry of Finance and Secretary to the Treasury Keith Muhakanizi has advised against the payment of Sh40 billion to 10 companies that supplied grain to the South Sudan Government.
Parliament last year approved a request from the government to clear a Sh151 billion debt owed to Ugandan traders and companies by the South Sudan government. The traders supplied of goods and services between 2008 and 2010 but were not paid following conflict in 2013.
South Sudan and Uganda then entered into a mutual agreement which could see Uganda clear the debt and treat it as a loan to the government of South Sudan.
The money will be paid back within five to 10 years at a six percent interest rate after the first year.
Parliament recently questioned how 10 of 33 companies were selected to benefit from the compensation.
Although the government had opted to pay only 10 companies, Parliament approved 23 more and recommended that they all be paid and the remaining over 120 companies be verified.
Now URN has learnt that Keith Muhakanizi advised against payment of the companies to avoid potential fraud that might emerge.
In an Internal Memo to Minister of Finance Planning and Economic Development Matia Kasaija, dated 11th February 2019, Muhakanizi advised that all claims by the traders should be verified through an independent audit by Ernst and Young before compensations. He was however surprised when he found the process was already underway.
“I have consequently halted the process until the claims are independently verified. The purpose of this memo is to inform you of the need for an independent audit of the claims as earlier discussed with you and to reiterate my advice that the claims should be verified independently before the claim is made, “Muhakanizi says.
He also adds that if he is directed otherwise, he will take no responsibility for any potential fraud that might emerge, as was found in the process of verifying domestic arrears.
The letter was copied to the Deputy Secretary to the treasury and Accountant General.
In yet another internal memo that URN has seen written on 11th February, the Accountant General Lawrence Semakula writes to Muhakanizi and copies it to the Finance Ministers Matia Kasaija, David Bahati and Evelyn Anite saying he had recalled the Sh40 billion payment to the ten companies.
“Reference is made to your instruction to recall the above payment this morning 11.02.2019. The above payment has been recalled and cancelled until I get further information” the Accountant Generals memo reads.
It is not yet clear how much was already paid to the company’s pending verification.
In August 2018, the Attorney General said that claims by the 10 companies that were paid were not subject to joint verification because they draw their credence from the Memorandum of Understanding that was signed between the parties.
Parliament set up a select committee to investigate this matter.
The ten companies that were in the process of being paid include; Rubya Investments, Kibungo Entreprises, Aponye (U) Ltd, Afro Kai ltd, Swift commodities establishment ltd, Sunrise commodities, Sophie Omari , Apo General Agencies, Ropani International and KK Travelers.
Others that were not included in the list include; Roko Construction company, Ake-jo General enterprise, JB Traders, Odyek Ejang Company, Dott Services, Gunya company limited, Premier company, MFK company among others.