The appointments of Gen Katumba Wamala as minister of state for Works and Kyabazinga William Wilberforce Nadiope Gabula as a presidential special envoy have been challenged in a single Constitutional court petition.
Robert Mugisha and Deusdedit Bwengye in a petition filed at the Constitutional court, on May 29, 2017, argue that Gen Katumba Wamala’s appointment on January 9, 2017 was illegal because he has never resigned or retired from the UPDF.
The two contend that Wamala’s appointment as minister of state for works runs counter to UPDF’s cardinal rule of being nonpartisan and subordinate to civilian authority under Article 208(2) of the Constitution and section 99 of the UPDF Act of 2005.
According to the duo, Wamala’s appointment by the president and his subsequent approval by parliament on February 14, 2017, subjects him to a conflict of interest, which may compromise his office as a minister.
Gen Katumba Wamala's (L) ministerial appointment has been challenged
They argue that when Katumba was sworn in as a serving army officer, he took an oath of allegiance, which included; first to the president and second to the republic of Uganda, and to defend the president and second the Constitution against all enemies under section 52 and fifth schedule of the UPDF Act, 2005.
They say that when Katumba was sworn in as a minister, he swore to bear true allegiance only to the republic of Uganda, not to the president and to at all times truly serve first the republic of Uganda and second freely give counsel to the president, which they say is inconsistent with articles 133 (4), 114 (5) and 208 (2) of the constitution.
“That section 38(2) of the UPDF Act 2005 in as far as it permits officers and militants of defence forces to be attached or seconded as political or administrative heads of ministries, is inconsistent with and in contravention of articles 205 (2), 208 (2) and 257 (1) (S) of the 1995 Constitution of the republic of Uganda,” the petition says.
It’s not the first time civilians are challenging the appointment of an army officer to cabinet. In 2013, lawyer Eron Kiiza challenged President Museveni’s appointment of the late General Aronda Nyakairima as minister of Internal Affairs.
He said the appointment was illegal because the general had not retired from the army. But the petition is still on the shelves even after the general passed on.
In the second part of their petition, Mugisha and Bwengye challenge Kyabazinga’s appointment as the president’s special envoy on February 15, 2017, saying it predisposes him to participate in partisan politics yet he is a traditional or cultural leader, which they say is in contravention of article 246(3) of the constitution.
The Minister of State for Agriculture, Christopher Kibanzanga, has dismissed the proposal by the Operation Wealth Creation (OWC) boss Lt Gen Charles Angina to take over NAADS jobs, saying it’s unworkable.
Angina, who was Deputy Chief of Defence Forces until earlier this year when he was appointed deputy commandant of OWC, has written to cabinet, seeking to overhaul President Museveni’s favourite wealth creation programme by inserting more soldiers and NRM cadres within NAADS.
His letter of May 17 follows a damning report by the sectoral committee on Agriculture, Animal Industry and Fisheries, which was presented to Parliament on the same date. The report pokes holes in the Operation Wealth Creation programme and questions its efficacy.
Besides the parliamentary report, a number of critics have come out lately to question the performance of OWC, through which a group of soldiers is involved in distributing free inputs, seedlings and animals to farmers across the country.
Gen Angina appears to blame the programme’s failures on organisations supplying inputs to OWC, such as National Agricultural Advisory Services (NAADS) and Uganda Coffee Development Authority (UCDA), and advises the government to recruit NRM cadres and retiring soldiers in these bodies.
Gen Angina’s proposals are contained in a three-page letter to the Minister for the Presidency, Esther Mbayo, who he asks to forward them to cabinet for approval.
Lt Gen Charles Angina
According to Angina’s letter, the proposal to take over NAADS work was made during a recent meeting of OWC directors, which aimed to turn around the project and align it with Parliament’s recommendations.
“Beloved minister, I pray this [letter] finds you well. We have extensively deliberated on the future of OWC following the recent recommendations by the Agriculture committee of Parliament,” Angina’s letter to Mbayo reads in part.
Mbayo chairs OWC’s inter-ministerial working committee, which has representatives from the ministries of Agriculture, Finance, Water and Environment, Trade and Industry, and Local Government.
But Minister Kibanzanga rejects Angina’s proposals, arguing that taking away the roles that Naads kept after OWC was introduced would amount to doing away with its entire secretariat.
“Both Naads and UCDA were established by an Act of Parliament; you cannot say that you are taking over their activities. For example, Naads, after the extension services were taken away from it, the secretariat remained with handling contracts, procurement and distribution. If you take away those [roles], it is like you are taking away the secretariat, and [the Ministry of Agriculture] cannot allow [that to happen],” the minister said.
Naads was established by an Act of Parliament in 2001 as one of the seven pillars of the Plan for Modernization of Agriculture. It was designed to provide advisory services to enable farmers increase productivity.
QUEST FOR CONTROL
According to Angina’s letter, for OWC to succeed, its directors resolved that the programme needs to take control of the “centre of gravity” in all OWC-aligned institutions.
For OWC to take the centre of gravity in those institutions, Angina advised, civilian directors of the programme who are NRM cadres and UPDF officers should take up positions, especially at Naads. Angina further suggested that OWC people should take over the procurement function at Naads and the contracts committee.
“The directors noted that these positions don’t require any outstanding qualifications and [their] recruitment is [not] bound by any law in the land,” Angina wrote.
The general also suggested that army officers who are due for retirement should be retired and redeployed to take charge of OWC’s “centre of gravity.”
Angina went as far as naming some people he wishes to see appointed as civilian directors at NAADS, including Maj (retired) Rubaramira Ruranga, the former FDC Electoral Commission chief who returned to NRM; former ministers Henry Banyenzaki and Sarah Kataike Ndoboli; OWC legal officer Henry Kyalimpa, Hawa Namiiro, Prossy Mugenyi and Diana Kitonsa.
Sources have told The Observer that Kataike, the former minister for Luweero Triangle, who is currently the OWC’s director for policy, is being fronted to take over the Naads procurement role.
Banyenzaki, the former minister of state for Economic Monitoring, may give up his current OWC job as director of investments to head the NAADS contracts committee, while Rubaramira would head the programme’s directorate for health.
However, interviewed yesterday about the new proposals, Kibanzanga, the Minister of state for Agriculture, told The Observer they cannot work.
“First of all, OWC is an intervention under the Office of the President whose lifespan is two years, which are about to elapse. If we are to have any changes in the management of the sector [agriculture], it is the Office of the President to make such changes and introduce them to us,” Kibanzanga said.
The minister added that the agriculture ministry is adopting single spine extension services, which they have to re-align with the [National Agriculture] policy.
“Of course there are some necessary reforms but they can’t be fronted by OWC. If they want, they can second people to work within the structure of Naads and UCDA but they can’t suggest proposals to us,” Kibanzanga said.
The parliamentary report that poked holes in OWC was compiled after MPs visited the districts of Agago, Oyam, Nebbi, Kakumiro, Kyenjojo, Kabarole, Bududa, Kibuku, Soroti, Buvuma, Nakapiripirit and Moroto.
PARLIAMENT: Parliament is today expected to debate and adopt the Appropriation Bill that will inform the National Budget 20 17/18.
The House according to Mr Jacob Oulanyah the Deputy Speaker of Parliament, will convene at 10:00 o’clock and will handle both Supply and Appropriation.
“We cannot go beyond tomorrow (today) otherwise we will be in breach of the laws we have passed ourselves,” he said.
“This House will not be able to finish business if we only sit in the afternoon, and I am arguing the Front Bench to reconsider tomorrow for purposes of the deadline we have as a government and Parliament,’ he added.
The Appropriation bill contains resource allocations for every sector as well as revenue sources.
Daily Monitor could not ascertain the progress of the Budget Committee report, and all members were in a closed door session to wind up their tasks.
However, the National Budget Framework Paper adopted by Parliament last month, reconciled with a shs 28.t trillion figure, for the National Budget, out of which shs 17.4tn is earmarked for Recurrent Expenditure, while shs 11.5 tn is for Development Expenditure.
According to the Public order Management Act, the Budget is supposed to the adopted by Parliament at least not later than May 31.
The law under Section 14(1) provides that, “Parliament shall, by the 31 of May of each year, consider and approve the annual budget and work plan of Government for the next financial year, the Appropriation Bill and any other bills that may be necessary to implement the annual budget.”
However, the Speaker under the subsequent provision has the discretion to extend the adoption of the Budget, ahead of both the State of the Nation Address and the National Budget Speech.
The two have since been fixed for June 6, 2017, and June 8, 2017, respectively, at the Serena International Conference Center, in Kampala.
The House will also adopt recommendations of its Budget Committee on the different projections, regarding sector resource allocations.
The new Budget becomes effective on July 1, 2017in line with Section 13(5) of the Public Finance Management Act.
The 2016/17 Budget was shs 26.3 tn, indicating a rise of close to shs 3 trillion in the next Financial Year.
Security has been tightened at Rubaga Cathedral in Kampala where the requiem mass for the fallen educationist Prof Lawrence Mukiibi is underway.
Mukiibi's body has already arrived at the church and the mass has started. Most of the mourners attending the mass are wearing white, in honour of Prof Mukiibi’s request.
The First Lady also minister of education, Ms Janet Museveni is also attending the mass as the chief mourner.
KAMPALA: A Ugandan government delegation is in the Eastern Democratic Republic of Congo for talks over transboundary disputes and management of Lakes Albert and Edward in the Albertine region in South Western Uganda.
Lake Albert is shared in roughly equal parts by the two countries while DR Congo takes the biggest share of Lake Edward. The frontier area's security is also undermined by the lawless nature of DRC's eastern region where militias roam and Kinshasa's grip is fragile.
The delegation led by Ambassador Paul Mukumbya, Head of the East African Community (EAC) and Ring States Department in the ministry of Foreign Affairs, left on Sunday. The delegation is also comprised of officials from the ministries of Water &Environment, Local Government and Agriculture (Department of Fisheries), Uganda Revenue Authority, and Office of the President.
The DR Congo Delegation which includes the counterparts of the Ugandan team is headed by the Charge D’Affaires at DRC embassy in Kampala, Ambassador Jean Pierre Masala.
In Uganda, the Albertine region covers areas in the Districts of Bushenyi, Rubirizi, Mitooma, Kanungu, Ibanda, Kiruhura, Kamwenge, Kasese, Rukungiri (in Edward Basin) and Bundibugyo, Ntoroko, Hoima, Buliisa, Kibale, Kagadi, Masindi and Nebbi Districts (in Albert Basin).
In DR Congo, the Lake Edward is in the North Kivu Province and Lake Albert in the Ituri Province. The total population within the Albertine area is estimated to be about 12 million people.
The head of public diplomacy in the ministry of Foreign Affairs, Margaret Kafeero, said in a statement the meeting is partly facilitated by the United Nations Development Programme (UNDP) under the peace and security cluster.
Speaking at the opening of the meeing, Ambassador Mukumbya, said the meeting was a follow-up to the cross-border cooperation meeting held in Nebbi district in November last year, to address reported conflict and skirmishes involving both government officials and citizens in the Albertine region, “..objective of the meeting is to agree on viable and sustainable solutions to various challenges identified by both countries including illegal fishing, use of illegal fishing methods, over-fishing due to uncoordinated regulation policies, confiscation of fishing gear by both sides, extortionist practices on both sides, attacks on fishermen and law enforcement officials as well as reported incidences of piracy.”
Uganda and DR Congo have over the years had long running border conflicts running from South Western Uganda to West Nile. However the discovery of commercial oil deposits on the Ugandan side, announced in 2006, heightened the tensions with DRC sometimes accusing Uganda of conducting illegal exploration in its waters.
Following increased border disputes in 2007, the two countries signed the Ngurdoto Agreement to that provided for a joint commission to verify and define the common borderlines and formulate amicable ways of resolving the disagreements.
After inviting President Yoweri Museveni as the chief guest for her thanksgiving ceremony in her constituency in Kitgum over the weekend, the Forum for Democratic Change (FDC) party has disowned MP Beatrice Anywar as its member.
The party’s deputy spokesperson, Paul Mwiru, told journalists at the party’s weekly press briefing at their offices in Najjanankumbi , that Anywar left the party when she stood as an independent in the 2016 general elections.
“FDC is a not prison that we need to give a person a letter showing that she has left the party. People leave at their own will like others who join FDC,” he noted.
Mwiru noted that since she stood as an independent, Aywar is free to be associated with any group she so wishes.
“Since elections ended, she has not been associating with the party. We cannot regulate her actions because she stood as an independent. So, her inviting the President to her ceremony cannot be part of our business,” Mwiru noted.
On Wednesday, May 24, The Observer published a story showing the extent of the devastation that hunger has caused in the Teso sub-region. In this second part of our series on hunger in Teso, EDRIS KIGGUNDU traces how the sub-region became food insecure and points out some of the solutions to the crisis.
Teso began its slow but steady descent into the current food crisis decades ago. The sub-region, according to local and civil society leaders, used to grow plenty of cassava both as a food crop and cash crop. Sam Opejo, 64, the elder from Kapir sub-county in Ngora district, remembers that trucks upon trucks from other parts of the country used to roam the villages, collecting cassava.
“We made a lot of money those days and we married all these beautiful women,” he said, pointing to his wife metres away.
However, in the late 1980s, the sub-region was hit by two tragedies that had an impact on food security. The first was the rebellion by the Uganda People’s Army (UPA) and other rebel groups that destabilized the region, forcing people to flee their homes and the land.
“No one could go to the garden during the war; so, a lot of land was idle. We were depending on relief from government,” said Benjamin Opolot, a former youth councillor for Kobwin sub-county, Ngora district.
The second catastrophe was the mosaic disease which destroyed acres and acres of cassava, which was the sub-region’s staple food.
Edulas (granaries) at a home in Toroma Katakwi
Without a reliable food crop, the sub-region started teetering on the edge of famine.
“People moved onto other crops like sweet potatoes, groundnuts, millet and sorghum. They needed to have a stable source of food,” James Peter Inyangat, the executive director of Vision Terudo, told The Observer in Ngora town recently.
Vision Teso Rural Development Organisation (Terudo) is a Teso-based development organization that was founded in 1982. Its founders envisaged it as a vehicle that would foster economic and social change in the sub-region. From tackling poverty to education, from dealing with HIV/Aids scourge to domestic violence, Vision Terudo has had a plateful to deal with.
But with the support of donor groups, the organisation established its footprint in most parts of the sub-region and it has become an iconic institution. In a society where formal government institutions have at times failed to do their work, the not-so-fancy offices of Vision Terudo in Ngora town, have become a place of first resort for people in Teso trying to look for answers to their predicaments.
On any given day, you will find a mother reporting about poor health services at a particular health centre, a parent complaining about rampant absenteeism of teachers at a primary school or a farmer looking for advice on how to improve their crop yield.
As part of insulating the sub-region from hunger, Inyangat says that in 1994, the organisation introduced a mosaic-resistant type of cassava, which however was not taken on well. At that time, many people had moved on to other crops which they were treating as food and cash crops.
Opolot, the former youth councillor, said the new food crops could not sustain the people for long due to a number of reasons.
“After the war, there was a population explosion as normalcy returned. All of a sudden people did not have enough land to cultivate and there was need to put back the children in school,” Opolot said.
With little food being produced on fragmented pieces of land, the region, starting from the early 200s, began to stare into the face of famine.
For how long would things hold together? Not long, it seemed.
ENTER 2007 FLOODS
In the months of June and July 2007, the sub-region experienced devastating floods, following persistent rains. The floods washed away gardens, destroyed road infrastructure and led to the death of at least nine people.
In a joint assessment of the impact of the 2007 floods on food security in eastern Uganda, the Food and Agriculture Organisation (FAO) and the World Food Programme (WFP), painted a bleak picture ahead for Teso.
In their report, the bodies predicted that between June 2007 and July 2008, Amuria district would have a deficit of 16,419 tonnes of cereals, 27,743 tonnes of roots and tubers [cassava] while Katakwi would have a cereal deficit of around 3,315 tonnes but small surpluses in roots and tubers.
“Many households in both Amuria and Katakwi suffered total losses of some crops [due to the floods], especially cassava, sweet potato and groundnuts, and need to be immediately identified and targeted for assistance,” the report noted.
A garden of maize destroyed by heavy downpour in Kobwin subcounty, Ngora district
The floods, according to Inyangat, also set in motion a pattern of two contrasting climatic conditions that the sub-region continues to experience till this day.
“Sometimes when it rains, it rains so heavily that whatever crops farmers have planted are destroyed and when it is dry, it goes on for so long that we lack water and animals die,” Inyangat said.
While nothing could have prepared Teso for the vagaries of the weather, when it comes to food security, some people believe something could have been done about food storage like in the olden days.
Writing in Daily Monitor in November last year, after reports emerged that some people in the sub-region were dying of hunger, Dr Okodan Akwap, a lecturer at Kampala International University, too wondered what had befallen the edulas, Ateso for granaries.
“Back in the 1960s and the 1970s when we were children, Teso was a sub-region that took the matter of food security very seriously…there would be edula (granary) for groundnuts and others for cowpeas, amukeke (sliced and dried potatoes), cassava, millet, sorghum, beans, etc. It was culturally unacceptable for a homestead to be without granaries,” he opined.
Akwap also noted the people had “thrown away the culture of storing food for tomorrow, opting to exchange it for money that will be used today.”
Like elsewhere in rural Uganda, granaries were introduced in Teso by the British colonialists and served two main purposes: first, they acted as a food reservoir for families for the period between planting and harvesting; secondly, they served as a store for seeds for the next planting season.
An edula was usually constructed using a combination of mud, clay, cow dung and flexible stems from some plants. Most families in Teso normally used to have two granaries to store different types of produce but polygamous families could have up to six.
Tom Okelloto, the chairman of Iteso Welfare Association, a charity organisation, remembers that back then, clan chiefs would inspect homes to confirm, among other things, if they had a granary. Those without edulas were usually punished.
“You could be paraded in the village and told to do community service,” Okelloto said.
Granaries started disappearing from Teso life during years of insurgency in the late 1980s. Once rebels figured out that some people were using them as hiding places, they began raiding homes which had granaries.
Okelleto said some people later opted not to have them at all.
Still, a number of homes in the sub-region have granaries even today, the difference being that virtually all of them are empty.
“People do not have enough food to eat. Where do you expect them to get food to store?” asked Okelloto.
Secondly, the hunger crisis has led to a spike in crime, including food thefts, according to local leaders. It would, therefore, be risky to store food in a granary. Many people now designate rooms within their houses where they store some of the food on bare ground. In many cases, the food goes bad.
Government last month delivered relief food to parts of the sub-region. According to local leaders we talked to, each family was given an average of five kilograms of maize flour. In addition, special groups like elderly, widows, child-headed families and the sick were given rice.
Inyangat of Vision Terudo said while the relief food was welcome, it was not adequate because the average number of people per household in Teso is six. This means on average, each person in a household received a kilogramme, which cannot last beyond one week.
And secondly, beyond the handouts, there is a growing realization that the sub-region needs a long-term sustainable solution to the problem of famine. Vision Terudo, in collaboration with another organisation, Pearls of Change, believes they have the formula.
“We have zeroed in on four crops that can be used as cash crop and are friendly to the environment. They are ginger, red pepper, avocado and jackfruit,” Inyangat said.
These can be grown alongside the common food crops such as cassava and maize. Of the four, Inyangat believes ginger is more profitable because a processed kilogram can fetch as much as Shs 250,000 on the international market. If planted on half an acre, the type of ginger (mzungu) that is being piloted by the two organizations can yield up to a tonne.
With each unprocessed kilogramme fetching between Shs 9,000 and Shs 15,000, ginger, it is hoped, will be an economic game changer. If the people in Teso get a reliable cash crop that can earn people handsome money, it means they will spare some of the food crops, like cassava and maize, which had been converted into major cash crops. These foods will then form the buffer against hunger.
This is still hypothetical but Inyangat’s dream is that it will soon become a reality.
More than 500 pilgrims from different corners last Saturday participated in ‘The Walk of Faith’ to mark Uganda Martyrs Day.
According to Archbishop of Kampala Archdiocese Dr Cyprian Kizito Lwanga, the walk is part of the spiritual preparation for the Martyrs Day Celebrations on June 3.
The ‘Walk of Faith’ was flagged off at Munyonyo Martyrs shrine by Archbishop Dr Lwanga and the first Deputy Prime Minister, Gen Moses Ali, who represented the Prime Minister Mr Ruhakana Rugunda.
The symbolic pilgrimage kicked-off at about 9.00am from Munyonyo Martyrs Shrine with a word of prayer and ended at St. Matia Mulumba Parish in Old Kampala.
“The symbolic pilgrimage walk under the theme; “ Stand firm in the faith that we have been taught” (Colossina 2:7) which calls on the faithful and pilgrims to be strong witnesses in faith, personal lives, families, places of work and all areas that their daily lives influence,” Archbishop Lwanga said.
The pilgrims will make two stopovers at strategic places for a moment of prayer, before proceeding to their final destination at St. Matia Mulumba Parish where they had a 30 minute health break to freshen up and afterwards had a celebration of Holy Mass at 12.00pm at the same venue, presided over by the Bishop of Hoima Diocese Rev Father Vincent Kirabo to conclude the walk.
Hoima Diocese, Uganda Episcopal Conference and Uganda Tourism Board led the symbolic pilgrimage also known as “The Walk of Faith”.
“This spiritual journey has been organised to enable our Christians today experience the Martyrs’ pain and their last moments on earth in a commemorative walk,” said Archbishop Lwanga.
Archbishop Lwanga said the walk began from Munyonyo as the place where King Mwanga II made the decision to begin killing Christians for their faith in Jesus Christ and that it was also at Munyonyo where the first three martyrs, namely, St. Denis Ssebuggwawo, St. Andrew Kaggwa and St. Pontiano Ngondwe were killed on May 26, 1886.
“.....And Munyonyo is also the place where majority of the martyrs started their two-day, painful but inspiring journey to Namugongo to face their death but some were killed along the way, while the others were burnt alive in Namugongo on June 3,” he added.
Bishop Vincent Kirabo urged Christians to observe the novena that started on May 25, and ending on June 2.
The allocation of public land in Kampala City is irregular and frustrating due to competing interests of the different government agencies, the commission of inquiry into land matters, has heard.
Ms Jennifer Musisi, the executive director of Kampala Capital City Authority (KCCA), said Uganda Land Commission (ULC) and Buganda Land Board (BLB), without consultation, dole out to private investors land controlled by Kampala District Land Board (KDLB).
“What is most baffling is the allocation of a lease by ULC over KCCA land upon which KCCA possessed a freehold title. We have several cases with similar facts and the land commission gives out a lease over our freehold title without due regard to Kampala physical development plan or environmental concerns or the fact that a fellow government agency maintains an interest over the same and we are challenging some of them in court,” Ms Musisi said.
KCCA, according to Ms Musisi, has already warned the various controlling authorities about the potential litigation and financial exposure that government faces if sale of such titled continues unabated.
Ms Musisi also cited the takeover by Buganda Land Board of titled KCCA land in Mulago, Kibuye and Namirembe alongside Kagugube markets as contested decisions.
She complained that ULC has doled out Nabagereka and Nakasero primary schools’ land to Boost Investments Ltd and Prestigious Apartments, respectively, without City Hall’s consent.
At a meeting at State House Entebbe, MPs rejected a proposal by President Museveni to offer a 15-year corporation tax waiver for Bujagali Energy Limited (BEL), a 250-megawatt power-generating facility.
Included in the Income Tax Amendment Bill (No. 2) 2017, the proposal sought to exempt Bujagali Hydro Power Project from paying corporation tax until 2033. The MPs last Monday rejected the 15 years but endorsed a five-year waiver on corporation tax levied on the company’s profits.
Despite pleas from Irene Muloni, the minister for Energy, and David Bahati, the minister of state for Planning, that the tax waiver was crucial in harnessing reduced electricity tariffs starting July 1, 2017, the MPs didn’t budge. They instead pushed for a shorter and renewable period of five years, within which government would assess the impact of the waiver and offer another lease.
Originally, Bujagali hydropower project was run by AES and Madhvani group but was suspended in 2003 after strong opposition from parliament and lack of financing.
A consortium called Bujagali Energy Limited (BEL) under the Agha Khan Development Foundation and Sithe Global Power LLC took over the project, whose construction started in 2007. Under a public-private partnership (PPP), government financed the 250 Megawatt project to a tune of $75m, while the European Investment Bank and World Bank guaranteed a $136m and $275m commercial loan respectively.
The dam was commissioned in 2012. The Observer has learnt that President Museveni called for two meetings with Parliament’s committees on Finance, Budget and National Economy at State House, Entebbe early this month to discuss, among other issues, the budget process.
According to sources who attended the meeting, President Museveni updated the committee members on the state of the economy, including the current investment climate.
It was during one of the meetings that the president raised the issue of high taxes paid by investors. Citing Northern Ireland, which levies 15 per cent corporation tax on foreign companies, Museveni lamented that at 30 per cent, Uganda levies one of the world’s highest corporation tax rates.
“The president told us the current corporation tax levy greatly discourages investors because the more profits you make, the higher the tax paid. He hinted on the fact that foreign investors had complained to him about this,” one MP who attended the meeting said.
President Museveni reportedly said that slashing the corporation tax by half to about 15 per cent would draw more foreign investment to the country and more revenue and jobs generated in the long term.
From 2012, when the dam was commissioned, government waived corporation tax for Bujagali. The waiver was expected to expire at the end of the 2016/2017 financial year, which would see the unit cost of electricity rise from the current 11 US cents to 13.38 US cents.
On May 22, President Museveni chaired the National Resistance Movement (NRM) caucus meeting at State House Entebbe. Debate focused on the Income Tax (Amendment) Bill, torture of suspects and sim card registration.
When the tax waiver for Bujagali came up, the majority of the legislators rejected the 15-year proposal. James Kakooza (Kabula) questioned the rationale of the exemption, yet electricity tariffs are still high.
Kakooza then proposed five years, only renewable after government has ascertained that the electricity tariffs have reduced. He received overwhelming support.
President Museveni reportedly admitted that the power purchasing agreement signed between government and the private investors was poorly negotiated.
When Bahati tabled the bill before parliament, it looked like a battle already lost, as legislators from the onset of debate shot down government’s proposal. Jacob Oboth (West Budama South), who chaired an ad hoc committee set up in the 9th Parliament to investigate the energy sector, revealed that their probe then found that Bujagali is one of the most expensive dams constructed in the world at $900 million.
Furthermore, Oboth said the power purchasing agreement was poorly negotiated and government is trapped. The only solution, he said, is to buy out BEL and get another dealer who would accept to work under another arrangement, which is cheaper.
“Probably there is more inside the whole deal than meets the eye. A forensic audit is needed here because we just had poor negotiators and the president admitted [during the NRM caucus] that he was not involved or informed, which is an indictment on the technical officers who could have connived and got kickbacks,” Oboth said.
The Natural Resources committee, in its report on the 2017/2018 budget for the energy sector, also observed that non-traditional access to development financing through PPPs like Bujagali has raised risks pertaining to profitability assurance clauses, escalating costs and affordability of services.
“This was noted in the Umeme and Bujagali dam contracts, pegged on non-disclosure and confidentiality provision that limit public scrutiny. The auditor general has not audited such PPPs due to lack of funding,” committee chairman, Alex Byarugaba (Isingiro South) said.
Nathan Nandala-Mafabi (Budadiri West) insisted that government produces the agreement and list of officials who were involved in the negotiations and eventual signing of the agreement.
Bahati on Friday tabled the agreements and names of technical officers, documents which will be scrutinized by parliament. Some legislators wondered why, in spite of a previous five-year waiver on corporation tax, only 20 per cent of Uganda’s population is connected to the electricity grid.
Okot Ogong (Dokolo South) mused that government had been warned about entering into the Bujagali agreement, on grounds that the concession was too expensive.
“For over 13 years that company has been charging Ugandans 13 US cents per kilowatt and enjoying profits. Now having enjoyed these profits, we are the same parliament that is going to say, let us add more unto you,” Ogong said, proposing, “Let us go for a buy-off. We get a loan from the World Bank and buy off the loan and manage our own project.”
Muloni said the tax waiver will reduce power tariffs from 13.8 US Cents to 11 US cents that will attract more investors because of cheaper power.
“Let’s continue with the waiver but we want this loan structured and refinanced so that we can reduce the tariff further. With many industries in this country, we are going to generate taxes. The economy is going to improve,” Muloni struggled to explain, amidst heckles from legislators.