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Struggling to Pay Scientists’ Increased Salaries, Broke Museveni Government Begs Top Commercial Banks for Huge Loan

President Museveni. One of his former ministers, Prof Edward Rugumayo, has been admitted at the Mulago National Referral Hospital in Kampala.

About three weeks ago, Ramathan Ggoobi, the Finance, Planning and Economic Development (Mofped) Permanent Secretary and Secretary to the Treasury (PSST), denied reports that President Yoweri Kaguta Tibuhaburwa Museveni’s government was currently broke, insisting that the administration had funds needed to finance the budget for the current (2022-2023) financial year in which the wage bill increased after salaries of ‘scientists,’ who include secondary school teachers of science subjects, were significantly raised. 

In the first and second quarters of the current financial year, there have been reports that some Ministries, Departments and Agencies (MDAs) have had most of their activities halted due to lack of resources since the Finance Ministry did not release the money meant for most of the work even when such funds had been included in the budget and approved for such functions.

There were also reports from various districts that Finance had sent less funds meant to cater for the payment of salaries of government employees, with some people arguing that government was too broke and unable to meet its obligations because it had hugely increased salaries of science teachers and other scientists at a time when the economy was not doing well since the country is still recovering from the effects of the Covid19 pandemic.

But about three weeks ago, PSST Ggoobi explained that government was not broke but had withheld funds to curb inflation. “The Quarter One releases were constrained due to the need to support monetary policy in curbing inflation. However, there was much better revenue performance than had been projected,” the PSST explained. “Fellow Ugandans, government has got the resources to cater for this statutory obligation. On the revenue side, the months of July to September 2022 registered a surplus of Shs177.9bn, thereby improving the government’s financial position.”

His argument was that government would somehow deal with inflation by withholding some of the monies that should have, for example, been released in the first quarter. The funds withheld then included money meant for the payment of salaries, and as we reported, thousands of government employees had to go for two months without being paid the money they were expecting. But these funds were later released. (Read Stories Here and There).

But it has now emerged that government has now applied for a loan from a commercial bank to be able to finance part of its budget. The Museveni administration intends to borrow Shs 1.73 trillion, an amount the government says it will use to undertake development and infrastructure  projects. Without borrowing, the government would find it either difficult or impossible to finance some projects in these two key areas in the current financial year. Available information indicates that the government will borrow the money from Standard Chartered and other commercial banks.

Before this money can come through, a process has to be followed, from cabinet to a committee of Parliament and then to plenary for approval of the loan. Given the ruling National Resistance Movement (NRM) numbers in the House, pushing through the loan would not be difficult provided the party chairman and the country’s president wants it.

The process to secure the loan has begun. Finance Minister Matia Kasaija has written to Parliament, making known government’s request to borrow from the commercial banks. MPs sitting on the Committee of National Economy have also summoned to meet on Monday, October 31 so that they can urgently debate the request for the loan, after which Parliament will discuss the committee report and grant government the request to borrow.

In part, a letter to members of the National Economy Committee to attend the special meeting, reads: “Notice is hereby given that the Committee on National Economy will have a meeting with the Ministry of Finance to consider the urgent assignment of scrutinizing the request by the government to borrow up to €455.03 million to finance the development and infrastructure budget for the financial year 2022-2023.”

It should be remembered that government increased salaries of science teachers and other scientists, senior UPDF officers and prosecutors. (See How Much Each Government Employees Category earns every month in the new salary structure HERE).

You can also see the list of the 25 most highly paid government employees and how much they earn Here.

MUST READ: PAYROLL: Shock as Some Government Arts Teachers are Irregularly Paid Shs4m Like Their Science Colleagues

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