EXCLUSIVE: Inside the Shs 5.3 trillion war between Gen Salim Saleh and Keith Muhakanizi

A ‘war’ has erupted between Gen. Salim Saleh, the Operation Wealth Creation (OWC) Chief and Permanent Secretary of Ministry of Finance Keith Muhakanizi over Shs 5.3 trillion that has been identified by OWC budget review committee in the budget for FY 2020/21 as excess and recommended for reallocation to wealth creation and food security.

After reading the budget, Gen. Salim Saleh, the Operation Wealth Creation (OWC) Chief put together a team from OWC together with economic policy analysts to conduct an independent assessment of the budget, sources inside OWC have informed us.

This was arrived at after it was discovered by Gen. Saleh that the budget for FY 2020/21 is not well aligned with National Development Plan III (NDP III), and thus he called for a review of the budget to realign it with the country’s medium-term strategic direction, development priorities, and implementation strategies.

The assessment committee of economic policy analysts reviewed the budget and wrote a report indicating that they had discovered a potential efficiency saving opportunity of Shs 5.3 trillion from the consumptive expenditure.

In a report written and signed by the OWC special committee and seen by Nile Post, of the Shs 5.3 trillion, the committee observes that Shs 1.85 trillion can be saved from counterpart funding, and Shs 3.47 trillion saved from consumptive funding.

The Ministry of Finance has since quashed the report from this special committee citing that it is non-critical, and now failure to agree on a mutual position of whether these Shs 5.3 trillion is available for relocation or not is what has caused the impasse.

Our sources have informed us that Gen. Saleh and Keith Muhakanizi, and his team from the ministry have been engaged in a series of discussions about this report.

This has also been confirmed by Partick Ocailap, the deputy secretary to the Treasury, who spoke to our reporter on phone.

"Yes, we are still engaged in a series of meetings and we will soon let you know what the outcome is," Ocailap told our reporter.

These series of discussions have since also attracted the attention of the president, whom they presented the report to, and according to sources at the statehouse, the president has backed Gen. Saleh and tasked Keith Muhakanizi to find the Shs 5.3 trillion off the already passed budget.

The president has also instructed that this money is reallocated to food security programs and wealth creation.

According to a rebuttal report, from the Ministry of finance, the line permanent secretary; Keith Muhakanizi has quashed the report.

In the report, it was indicated that in the budget, the Shs 5.3 trillion for potential efficiency saving is not available.

In the response to the report written by the OWC special committee, the Finance ministry argues that the Shs 5.3 trillion identified for potential efficiency savings funds critical government projects like dams, transmission lines, water points, among other projects.

In the same report, the special committee calls for a cut in consumptive items like allowances for civil servants, something that the finance ministry disagrees with because it will lead to government projects stalling. After all, workers will be unable to monitor ongoing projects because there are no allowances to cater for their travels upcountry and other places where these projects are happening.

Inside the report, the committee suggests that allowances inside the Lands ministry should be cut by 100% and this money relocated.

This, however, Finance ministry says this would mean that work done by all government evaluators will stall because they are unable to travel and evaluate land, and this would in the end cause a delay in government’s projects and yet the government had already committed to big infrastructure projects.

In the same spirit, the report proposes a cut on allowances of MPs, but then the ministry says such allowances are protected by the law.

The Ministry of Finance says it will be a very unfair way to cripple the work of MPs in their constituencies.

Each of the 456 legislators earns anywhere between Shs 15 million to Shs 30 million ($4,011-$8,021) every month, depending on how far their constituency is from Parliament Building in Kampala.

In April 2019, MPs increased their allowances by 39% and that of parliamentary staff by 15%, citing rising costs of living.

Article 85 of the Constitution states that MPs are entitled to determine their emoluments, a privilege no other public officials enjoy.

The committee report also suggests that all monies allocated for national public celebrations should be cut and relocated.

This would mean that national celebrations like Independence Day, International Women’s day, among others, would not be held, as the norm has always been.

On January 27tht 2020, the Ministry of Gender, Labour and Social Development issued policy guidelines on celebrations of the International Women’s Day in Uganda.

In this document, the ministry says the national celebrations will be organized on a rotational basis among the 4 regions of the country.

"However, districts are free to request for hosting the National Day Celebrations provided this is done in writing indicating the district’s willingness to contribute financially, materially and in-kind five months before the actual date - 8th March each year," reads part of the document.

Analysts have said that the rotational basis of events has a political connotation to it and therefore it can be hard to do away with such events, as the president is said to be using the same events to the campaign.

In the rebuttal report by Finance ministry, Keith Muhakanizi states that the ministry can only find Shs 440 billion shillings out of the Shs 5.3 trillion but recommends that even out of the Shs 440 billion, Shs 155 billion should be retained under production and social service sectors, and the remaining Shs 285 billion should be used to reduce the projected revenue shortfall.

The report adds that more money from budget cuts could have been found but some sectors are protected and therefore they can’t face budget cuts in this financial year 2020/21.

The protected institutions are under the sectors of legislature, security, presidency, and judiciary and high priority areas under infrastructure and human resource development.

This means that even the Shs 440 billion budget cut that has since been traced for relocation, still can’t be relocated as it will be used to offset part of the revenue shortfall Uganda expects, as a result of Covid-19.

Sources have informed Nile Post that discussions are still ongoing between Gen.Salim Saleh and Keith

Muhakanizi’s team throughout the entire weekend and both reports will be presented for discussion during a cabinet sitting on Monday 6th July 2020.

What remains questionable to many is how does the chief of Operation Wealth Creation institute an independent committee to review a budget that has already been passed?