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The real thieves of teachers’ money

The Microfinance Support Centre Officials being escorted from court by police officers.

THE LAST WORD: The real story of how teachers’ money was stolen and how the wrong guys were framed and jailed

THE LAST WORD | Andrew M. Mwenda | On September 9, all major news outlets in Uganda ran a screaming headline: `Microfinance Support Centre officials charged with embezzlement’. It alleged that Shs11 billion released to MSC “just disappeared” into the pockets of four officials – John Peter Mujuni, the executive director, John Mwebembezi, the head of finance and administration, Joan Asiimwe Baryaruha, a teacher and Julia Birungi, a lawyer and the assistant credit officer.

As the police and the Director of Public Prosecutions (DPP) moved swiftly to arrest, charge and remand the accused, the media took the news on its face value. Since then no newspaper has published any account of how the theft happened.

The true story is that in 2010, some teachers registered a union called the Uganda Teachers’ Cooperative Savings and Credit Union (UTCSCU). In 2011 President Yoweri Museveni launched it in Jinja and pledged of Shs25 billion to it. In 2014, the money was given to the Ministry of Education. The ministry issued a tender for a financial institution to manage it as a revolving fund. MSC won the bid.

The Ministry released Shs9.2 billion to MSC, who gave it to 150 teachers’ SACCOs across the country at an annual interest of 9% plus 2% administrative costs. As I write, this revolving fund has grown to Shs10.8 billion with total value created for teachers of Shs16 billion.

In 2015, teachers began to agitate that they want to manage the money themselves. This was during election campaigns. Some teachers formed a rival union with a near-similar name – the Uganda Teachers’ Savings and Credit Cooperative Union (UTSCCU). The registrar of cooperatives should have noticed this similarity in the name and turned it down but did not. Why? We don’t know.

Anxious to win the support of teachers, a large and influential body, and also perhaps misinformed, Museveni ordered that the money should be given to teachers to manage by themselves. This was politically profitable but technically disastrous. The teachers’ unions and the SACCOs did not have the capacity to manage this money. Now every group of teachers rushed to form a union in order to get a piece of the pie. The rivalry emerged among teachers on which of the unions should manage the money.

Finally in 2015, the Ministry gave the balance of Shs15.8 billion on the president’s pledge to the hastily formed UTSCCU. This is where the fraud began. Officials of UTSCCU would go to some SACCOs, give them Shs50 million but they sign for Shs80 million.

UTSCCU was using the offices of Uganda National Teachers’ Union (UNATU), which is a labour union. But a trade union is not a cooperative. There is correspondence where UNATU was writing to the Ministry of Finance demanding money to go to UTSCCU, which in principle is not correct. UNATU is a pressure group, which ideally cannot be overseeing the activities of a cooperative.

In 2017, UTCSCU threatened to sue UTSCCU for deliberately registering a name almost the same as its own (impersonation). UTSCCU rushed and changed its name into Walimu Sacco Union. By this time, UTSCCU had finished dishing out the Shs15.8 billion. Walimu Sacco began agitating that even the money at MSC also should be given to them to manage. But MSC already had a Memorandum of Understanding (MOU) with the Ministry of education and with UTCSCU. So it could not change to this new entity.

2 comments

  1. 1.As we were still recovering from the NRM primaries then boom;A human head was on its way to parliament before we could come to terms with that; MUK was up in flames.But for the MUK fire;my gut feelings tell me that NUP burnt down MUK.
    2.Since when did Teachers become business minded?There is a way civil servants are contented with their salary and allowances actually they work to receive pension only.
    3.That over 25 Billion shillings that was sunk in Teachers’saving scheme would have made more money if it was invested in Treasury bills or farming then the profits generated from these investments would be distributed to members.( I have friends from the north who have made a killing from soya Farming)
    4.Micro Finance institutions are known for lending small monies honestly how much were the teachers expecting to receive?
    5.Micro Finance institutions are meant to benefit the extreme poor for example; Women,market vendors and the likes of Rajab and Ejaakait who even borrow from womens’ saving schemes.
    6.Micro Finance institutions are not subjected to strict and thorough financial checks because at times their collateral security are difficult to vaule for example; Rajab may borrow 500k and his collateral is his poultry farm but because he has no experience in rearing birds;half of them die so the microfinace company may find difficulty in recovering their money.
    7.We all saw how Sudhir was fumbling with Crane Bank actually Sudhir ‘s behaviour after the collaspe of Crane Bank showed that he was more hurt by thought of losing the buildings that housed Crane Bank than losing the Bank itself.

  2. Rev Emmanuel BGisha

    The article with you already.

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