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Govt paid Shs40bn compensation to traders in S. Sudan without verification

Confessing to the anomaly while appearing before legislators on a Select Committee investigating criteria used to pay traders who supplied goods but were not paid due to South Sudan war in 2013, Deputy Secretary to Treasury Patrick Ocailap revealed that Finance ministry had asked for a special audit into the compensation after it had been approved.

SPOTLIGHT | The Ministry of Finance authorised payment to a tune of Shs40 billion in compensation to traders in South Sudan without first verifying a report from the Ministry of Trade, legislators have been told.

Confessing to the anomaly while appearing before legislators on a Select Committee investigating criteria used to pay traders who supplied goods but were not paid due to South Sudan war in 2013, Deputy Secretary to Treasury Patrick Ocailap revealed that Finance ministry had asked for a special audit into the compensation after it had been approved.

On February 11, Secretary to the Treasury Keith Muhakani wrote to Minister Kasaija advising that all claims by the traders should be verified through an independent audit by Ernst and Young before compensations.

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“I have halted the process until the claims are independently verified. The purpose of this memo is to inform you of the need for an independent audit of the claims as earlier discussed with you and to reiterate my advice that the claims should be verified independently before the claim is made, “Muhakanizi wrote.

The ministry Accountant General, Lawrence Semakula, responded to Muhakanizi on the sam day indicating he was recalling the Sh40 billion payment to the ten companies.

“Reference is made to your instruction to recall the above payment this morning. The above payment has been recalled and cancelled until I get further information,” Semakula wrote.

Muhakanizi was late.

“It’s true we had not seen the verification report from the Ministry of Trade of the traders to be paid before authorising payment,” Ocailap told the committee after legislators had taken note that Finance minister Matia Kasaija had only considered calling in the Auditor General after payments had been made.

The MPs also tasked the Ministry of Finance to explain why they paid only 10 traders yet the Ministry of Trade had 23 companies listed for compensation.

Asked if the Ministry of Finance had appointed an officer on the verification committee, Ocailap admitted not being aware if the ministry was represented.

“Are you in possession of any report from the joint verification committee? Then I will question the premises of how the companies were generated. How do people throw companies into your face and you pay?” asked Masaka Municipality MP Mathias Mpugga.

Ocailap asked for more time to cross check if the report existed arguing, “It must be there, I have not seen it from the distance or near.”

Ann Nankabirwa (Kyankwanzi Woman), who chairs the Select Committee, tasked the ministry to explain what risk taxpayers stood if South Sudan constituted a unitary government and whether that might that have an effect on the bilateral agreements the two governments signed.

“Even when the government of South Sudan gave us a guarantee I had to verify validity of that guarantee with the Central Bank and they said that guarantee is irrevocable. Even if they form a unitary government, they will have to pay the $40 million,” said Ocailap.

South Sudan fell back into the doldrums of civil war just two years after gaining independence in July 2011 when President Kiir accused his deputy Riek Machar and ten others of attempting a coup d’état.

The civil, that is still ongoing, affected Ugandan traders who had already supplied the government that became cash-strapped as war drained its treasury.

Following their complaints, Uganda and South Sudan governments reached an understanding to compensate the traders.

But because the South Sudan government is yet to pick itself up from the latest setback in its long history of civil wars, the two parties agreed that Uganda would compensate the traders and South Sudan reimburses the money at a later time.

Parliament last year approved a request from the government to clear a Sh151 billion debt owed to the Ugandan traders and companies by the South Sudan government. The traders supplied of goods and services between 2008 and 2010 but were not paid following conflict in 2013.

But with compensation in the picture, several traders pushed to have their companies listed, which called for verification of claims before any compensation could be met.

The select committee was constituted by Speaker Rebecca Kadaga after complaints from other traders that they had been left out of the cash bonanza.

Amid the clamouring for compensation, some traders claimed that among the 10 companies that benefited from the payment, three are owned by State minister for planning David Bahati.

The ten companies that were in the process of being paid include; Rubya Investments, Kibungo Entreprises, Aponye (U) Ltd, Afro Kai ltd, Swift commodities establishment ltd, Sunrise commodities, Sophie Omari, Apo General Agencies, Ropani International and KK Travelers.

Others that were not included in the list include; Roko Construction company, Ake-jo General enterprise, JB Traders, Odyek Ejang Company, Dott Services, Gunya company limited, Premier company, MFK company among others.

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