Tour Guide to Corruption in Uganda

>> Saturday, October 27, 2007

‘Corruption increases’

(Monitor Newspaper) September 27, 2007

CORRUPTION in Ugandan has escalated and is stifling the nation's struggle to eradicate poverty, according to a report released yesterday by Transparency International, the Berlin-based global anti corruption body.

The country's ranking in the world Corruption Perception Index, CPI, has taken a fresh, disconcerting plunge, dropping 12 positions within one year. With a CPI of 2.8, Uganda is the 117th most corrupt nation in 2007 in a ranking of 178 countries.

Notably, the sharp decline in accountability appears to mock efforts both of the government and its donors who have devoted ever-increasing amounts of scarce resources purportedly to fight corruption in public offices.

The finance minister, Dr Ezra Suruma announced during his 2007/08 budget speech that the US government had granted Uganda $10.2 million (more than Shs18 billion) to strengthen "investigation, documentation and prosecution of corruption cases."

New Zealand and Denmark occupied the first and second places on the CPI, both scoring 9.4 while Somalia and Myanmar tailed the list as the worst and second worst corrupt nations in the world.

Govt pays ghosts Shs21b per year

Kampala (Monitor) October 18, 2007


DEAD, retired, and sacked civil servants are on average paid Shs1.7 billion a month or approximately Shs20.8 billion a year, according to findings by the Auditor General.

The latest AG's report for the year ended June 30, 2006, indicates that the ghosts on the payroll were maintained and managed by a racket of corrupt but organised government officials.

The report says the payments have been handed out for many years. However, an audit sample of salary payments for July 2005 and March 2006 --for ministries/departments, local governments/ referral hospitals and educational institutions--showed that on average a whopping Shs1.7 billion was paid out to ghosts.

In August 2005, President Museveni directed all accounting officers to clean and remove invalid records (ghosts) from the government payroll. Following this directive, an inter-ministerial task force comprising Ministry of Public Service and the Ministry of Education and Finance conducted a payroll cleaning exercise.
Among the key findings, the AG says, was the existence of invalid records or ghosts on the payroll.

"A total of 9,199 invalid records were deleted from the payroll leading to a saving [loss to government] of Shs1.734, 170,984 in salary costs," the report reads in part.

A computation sample for one month shows that at least over Shs1.7 billion is paid to ghost government workers per month. But MPs are saying this has been going on for long and that attempts to expose culprits have either been too sluggish or pending.

The shocking revelations were made yesterday during a meeting between the Parliamentary Public Accounts Committee and officials from the Ministry of Public Service, who manage the government payroll. Budadiri West MP Nandala Mafabi, told Daily Monitor that the Shs20.8 billion could have been used to pay pension arrears for over 1,000 former government employees.

"It's a shame that ghosts are being paid yet we have over 40,000 people struggling to get their pensions. Many of our senior citizens have died without getting their money," Mr Nandala said.

According to MPs, for the five years the ghosts have so far received Shs100 billion. Statistics from the report show that the 26473 invalid records (ghosts) comprised of delayed transfers (65.25%), retired (10.26), absconded (10.03%), died (4.62%), resigned (1.37%), left (0.37%) and others (7.69).

Aswa MP Reagan Okumu accuses officials in the Ministry of Finance and Public Service of 'connivance' to defraud the government. "We are disappointed; How can Shs1.7 billion vanish per month? In fact, officials in Finance and Public service should be investigated. Our people are suffering and these officials are just enjoying themselves," Mr Okumu said.

In the report, the AG found out that of 229,901 records verified, 26,473 were invalid (ghosts), 78 percent of which were from educational institutions, 20 percent from local governments and referral hospitals, and 2 percent from ministries and other government departments.

The committee's vice chairperson, Mr Ssebuliba Mutumba (Kawempe South), said: "This is fraud and this money must be refunded and all officers involved will be arrested." He said this signified the decay in many government institutions.

In her response, Ms Gorret Sendyona, the assistant commissioner in charge of the payroll in the Ministry of Public Service, said the government has embarked on a rigorous cleaning exercise to overcome the problem.

Mr Jimmy Lwamafa, the PS in the Ministry of Public Service, said some unnamed officials have started returning the money.

Officials steal interest on banked govt money

KAMPALA (Monitor) October 15, 2007

A BIZARRE racket in which officials with access to huge deposits of public money hold the cash in special accounts and reap from it in interest can now be exposed.
The officials transfer the cash to fixed deposit accounts for at least a month and end up reaping millions off it in interest.

Mr Ssebuliba Mutumba, the Vice Chairman of the Parliamentary watchdog - the Public Accounts Committee - told Daily Monitor yesterday that the scheme is a "big and complex syndicate" involving mainly the Ministry of Finance which originates most of the funds, Ministry of Defence which is one of the biggest spenders, Bank of Uganda, which does the bulk cash releases and other project-heavy ministries like the Ministry of Health.

"Even if the money stays for two or three days (on fixed deposit accounts), because it is a huge amount, it is still able to make for them millions in interest. It is a complicated syndicate, in fact and the Auditor General only captures just a few," said Mr Mutumba, who is also MP Kawempe South. These government workers with access to the large sums of money, especially those managing project funds, are thus able to make the millions by colluding with top banks in town to hold the money as fixed deposits. The interest that accrues is later pocketed.

The discovery could go a long way in explaining the magic that modestly paid government workers use to be able to live splendid lives, send their children to schools where their monthly salary cannot cover a term's school fees and build plush mansions without the risk of facing court bailiffs over loans.

Top commercial banks in the city are key in the scheme. The money, according to documents available to Daily Monitor, is normally held for anything between one month, three to six months;- during which period it accumulates millions in interest. Now, Parliament watchdog committees are gunning for the heads of those behind the scam and are launching a full investigation. The Local Government Accounts Committee, the Public Accounts Committee and the Parliamentary Committee on Statutory Bodies, State Enterprises and Commissions, are teaming up with the Auditor General to demand that the interest is deposited in the government's coffers.

"We are getting very close to them," Mr Mutumba said. "We shall get their (financial) statements, bank reconciliation and we shall track the money." The interest is usually switched to a separate account to make more money or is pocketed, Daily Monitor has learnt. Meanwhile, the principal sum could either be withdrawn-depending on how much pressure a particular government official could be under to pay off the bonafide beneficiaries or in the absence of such pressure, the fixed deposit period may be renewed.

Because the government does not demand accountability on funds beyond what it disbursed, officials can safely make and keep the difference for themselves.
In one case discovered by the Auditor General, a key government body deposited Shs1.446 billion and at the expiry of the fixed deposit, the project manager wrote to the bank; "the above mentioned fixed deposit matures today 28th June 2001.

We have received your offer to renew the same on 30 days term deposit at an interest rate of 4 per cent and decide to instruct you as follows; 1) Convert Uganda Shillings 867, 500, 000 to US$500, 000 at agreed exchange rate of Uganda Shillings 1,735 and credit that amount into our dollar account. Renew the balance of Uganda Shillings 578, 589, 033 on the fixed deposit account for 30 days at an interest rate of four per cent per annum."

According to audit queries by the Auditor General, in many incidents, only part of the project money is credited to official accounts while larger balances are kept on different accounts which are not official, an indication, officials noted, that some government staff are colluding with either banks or staff members to divert project funds.

Although Daily Monitor's investigations concentrated on bigger project monies, the chairman of the Local Government's Accounts Committee, MP Geoffrey Ekanya, said the problem is bigger.

"It has been going on for the last many years. In fact, it used to be worse under the old system because cheques used to be delayed in Kampala (where they were invested on fixed deposit accounts) and when they are released to the districts, the districts also deposit them on a general account where it of course makes interest," he said, adding that "this interest is never declared."

Mr Ekanya said some affected areas included civil servant's salaries and cited the example of teachers who have often faced the brunt of delayed wage payments. "It is criminal because people who are supposed to be paid suffer and it also leads to creation of domestic arrears," he said.

Sharing the bounty
Because the money is big and has to follow a given trail, which requires many along the ladder to know about it, a well worked-out sharing plan is also in place.

In some projects or ministries, the accruing interest may be given to staff through internal salary loan schemes, Mr Mutumba said, adding: "There is a tendency to lend it internally. It is a very a big game. It is a big, big cancer because at the end of day, projects suffer."

African leaders steal $ 148 billion a year


NEW YORK/KAMPALA (Monitor) September 21, 2007

A QUARTER of the gross domestic product of African States - or $148 billion is lost to corruption annually, the United Nations has said.

Most of this money is stolen by African leaders and kept in banks overseas. The UN and the World Bank estimate that the value of criminal businesses is between $1 to 2 trillion.
The revelations were made during a press conference by the UN Secretary general, Mr Ban ki Moon, and the World Bank President, Mr Robert Zoelick in New York on Monday.

To check this practice, the two bodies announced a partnership to recover billions of dollars stolen by corrupt leaders from the developing world and which monies are lying in foreign banks while the countries from which it originated wallow in poverty.
A partner in the recovery effort will be the UN Office on Drugs and Crime.

The launch of Stolen Assets Recovery Initiative (STAR) in New York is a warning shot especially in Africa- where leaders like the late Congolese (Zairean) President Mobutu Sese Seko and Gen Sani Abacha of Nigeria- built obscene fortunes abroad.

However, neither Mr Ban nor Mr Zoelick mentioned the culpability of the banks that accept deposits from corrupt African leaders -and the support given to some of these leaders by powerful western governments.

"The theft of public assets from developing countries is a grave and growing concern, said Mr Ban, adding that stolen assets amounted to US$ 1 trillion every year.
Mr Zoellick on his part said the money being stolen was at the expense of social programmes that would target the poor in society.

"There should be no haven for those who steal from the poor," Mr Zoellick added. STAR is also intended to tighten the noose on illegal money used by criminal groups including international terrorists.

The Bank also says officials in developing countries pocket between US$ 20 to 40 billion in bribes- equivalent to almost 40 percent of the money they receive from development partners. The new initiative intends to re-invest recovered money in social programmes.
"Every 100 million recovered could fund full immunisations for 4 million children, provide water connections for some 250,000 households or fund treatment for over 600,000 people with HIV/Aids for a full year," Mr Zoellick said.

The World Bank president was optimistic that assets could be recovered citing cases from three countries - Phillipines, Peru, Nigeria. In 2004, the Phillipines was able to repatriate $624 million of former President Ferdinand Marcos' money held in Swiss Bank accounts.

Marcos, a staunch ally of America, was President from 1965 to 1986, and was reported to have stolen billions of dollars while his wife Imelda lived a lavish lifestyle- filling her house with thousands of pairs of expensive shoes.

Nigeria also recovered $505 million of the Sani Abacha money from Swiss banks but this is just a small slice of the money he is reported to have stolen.
The chairperson of Transparency International Huguette Labelle described the initiative as "a wake up call to those who steal and to those who facilitate or harbour stolen assets" but little pressure has come to bear on western banks and governments who are complicit in the thefts.

In May 2004 for example, Christian Aid, a United Kingdom-based charity organisation, accused the Uganda government of "wrongly" diverting aid money with the knowledge of the British government. Uganda, an aid-dependant country, is also notoriously corrupt.

This year the government has said fighting corruption is a priority but a 2004 report for the World Bank, which gives millions of dollars worth of aid and loans to the country, noted that corruption was key to the survival of the regime in Kampala.


About This Blog

The X.U.G (Xpose Uganda's Genocide) Coalition was created to bring to light the truth about Yoweri Museveni's woefully undemocratic regime and the ongoing secret genocide in northern Uganda, with the aim of the restoration of human rights and peace.

The coalition's secondary goal is to ensure accountability for reconstruction and development funds slated for war-torn N. Uganda by the US and other donors.

A crisis of epic proportions, the genocide being carried out against the Acoli for the last two decades has produced devastating consequences.

For the sake of current and future generations in Uganda, the world must recognize and end the genocide in Uganda. All Ugandans have a right to basic human rights, including the right to health, protection and education.

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