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Govt employees see dev’t projects as cash cows – Muhakanizi

Keith Muhakanizi

Keith Muhakanizi, the secretary to the Treasury says the decision by World Bank to freeze further lending to Uganda is a direct response to the tough austerity measures he has instituted in the management of government finances.

Early this month, the World Bank froze further financing to Uganda due to poor management and low absorption capacity of projects by the government. The World Bank has been giving Uganda about $500m in three-year cycles.

However, on September 3, the World Bank suspended new lending to Uganda over low absorption and poor management of programs and projects till when the country’s loan portfolio is reviewed.

Speaking during in a recent interview with URN, Muhakanizi said, for a long time accounting officers and managers of many World Bank and other donor-funded projects took them as cash cows leading to poor management of public investments.
Muhakanizi said ever since he took the reins at ministry of Finance in 2013, he has been championing tough austerity measures in order to streamline government spending and management of programs and projects.

According to Muhakanizi, gradually, the loopholes are being plugged and accounting officers and project managers are increasingly finding it difficult to benefit personally from the projects at the expense of the country’s development.

Muhakanizi said he has heard from ‘reliable sources’, that the low absorption capacity of government project is because, accounting officers can no longer directly benefit from the projects due to the austerity measures introduced by the ministry. He however says the austerity measures will continue because they are good for the country.
“I’m happy that given the efforts we have done, the World Bank, and, not like in the past, [their] budget cutting [wasn’t] because of corruption and misuse of government resources. Another ‘animal’ that we need to deal with here, is maybe social protection issues and whatever.

Probably because of those efforts, somebody told me that absorption money has dramatically gone down since 2012, and, the argument somebody was making is, that am the major cause because of the reforms we have introduced. People don’t see getting their personal benefits out of the money [anymore] and therefore they don’t care. I don’t know the major cause why the absorption of money is down. I don’t know, let us check. If that is the cause shall we go back? No. We shall not surrender to that bad method”.

Recently at Munyono, President Museveni was furious with ministry of Education officials for failing to spend over Shs 330bn grant secured in 2014/15 through the Global Partnership for Education programme administered jointly by the World Bank and the African Development Bank. It was to construct schools and improve teacher and school effectiveness in the public primary education system. The grant was expected to have been used by 2017. Three years later, the ministry has not even constructed one school.

Describing the World Bank suspension of lending as a ‘small thing’, Muhakanizi said the ministry would soon sort it out. The suspension of lending will affect water, agriculture and transport projects where the World Bank is refocusing attention.

Government attributes the problem to absence of project designs, counterpart funding and inadequate supervision. While speaking at the launch of the World Bank’s Uganda Poverty Assessment Report 2016, Muhakanizi said all accounting officers from permanent secretaries downwards will feel the heat and be held directly liable for any mismanagement of government programs and projects.
A tough-talking Muhakanizi warned that if Uganda is to realize her dream of transforming into a middle-income country by 2020, then the right things have to be done.
“The way forward is only one way forward to hold those managers who don’t get results efficiently to take the heat. What is the other route? There is no other route, it is only one route. Full stop. The permanent secretaries as far as concerned are the project managers, all these people must take the heat”

The World Bank’s Seventh Uganda Economic Update report, which focused on public investments management, revealed that literally no public investment project in Uganda has run without trouble in terms of poor costing, procurement delays, and capacity gaps right from conception through implementation up to operationalization.

In December last year, the World Bank suspended funding to the Uganda Transport Sector Development Project (TSDP) due to “contractual breaches related to workers’ issues, social and environmental concerns, poor project performance, and serious allegations of sexual misconduct and abuse by contractors.”

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