Bank of Uganda Governor Tumusiime- Mutebile and PS Chris Kasami
By ISAAC IMAKA
Posted Thursday, November 17 2011 at 00:00
Twenty four hours after Bank of Uganda Governor told Parliament that he dipped into the country’s foreign reserves upon agreement with the President that tax receipts from an oil transaction would be diverted to replenish the key holding, Ministry of Finance officials have contested the suggestion.
In disputing the Governor’s claim, the Finance ministry yesterday may have further sown more confusion over how the country can hope to reap from the expected oil dividend.
Appearing before the parliamentary ad hoc committee investigating allegations of corruption in the oil sector yesterday, Finance Minister Maria Kiwanuka and Mr Chris Kasami, the secretary to the Treasury, shook their heads in disapproval when committee members informed them of what Governor Tumusiime- Mutebile revealed only a day earlier.
Mr Kassami said the ministry is not aware of the Governor’s reported discussion with President Museveni. The Treasury secretary also insisted that proceeds from oil transactions received so far were supposed to be spent on the construction of Karuma Hydro power Station and that this money is still on an account for that purpose.
“There’s money for Karuma as far as I am concerned. You do not have to believe me, the Auditor General is your agent he can go and audit and certify to you that this money is on the account,” Mr Kasami said.
Early this year, government’s secretive purchase of Sukhoi fighter jets using $740 million quietly drawn from the country’s forex reserves, provoked criticism. Parliament was outraged that Mr Museveni took a legally questionable decision in directing the Governor in possible contravention of the constitutional provisions which guarantee BoU’s protection from external influence. Economists partly blame the economic problems facing the country on this single transaction which stripped forex reserves from six to four months worth of import cover.
Government take
Government has since been telling the public that oil money got from capital gains tax assessed when Heritage Oil sold its stake to Tullow Oil which will be used in the construction of Karuma Dam. It is, however, the same money, $449.4 million that the Central Bank Governor on Tuesday said Mr Museveni promised would replenish the foreign exchange reserves.
“In the local understanding it would mean that the Governor agreed with the President that ‘take the money and when we get money from oil we replenish the reserves’. This money was planned for Karuma so where is the money for Karuma? Which batch went to the reserves?” asked Makindye West MP Hussein Kyanjo.
Committee chairman Michael Werikhe demanded a deeper explanation from the ministry of finance, and asked whether the country’s foreign reserves were replenished now that the money promised for that purpose is awaiting the Karuma project.
“The members need a thorough explanation to what really happened to that transaction because the Governor decided to touch the matter even when I had given him the discretion to choose either to respond or not,” he said.
The committee is also yet to understand where the ongoing London arbitration over the capital gains tax assessment, which was disputed by Heritage, leaves the forex reserves in case the suit is decided against Uganda.
iimaka@ug.nationmedia.com
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