Why is Uganda Paying Roko UGX. 300Bn Instead of Fixing Healthcare Concerns?

On July 20, 2022, the Minister of State for Finance (General Duties), Hon. Henry Musasizi, moved a motion for the government to buy shares in ROKO Construction Ltd, a company with a 54-year history in Uganda. One of ROKO’s notable projects is the iconic Martyrs’ Shrine in Namugongo.

The Minister explained that the government was buying 150,000 preferential shares to provide financial support to ROKO, enabling the company to complete government projects stalled due to liquidity issues. However, it remains unclear why the government didn’t resolve this liquidity problem by pre-paying contracts or paying ROKO’s outstanding invoices.

The Minister did not provide a valuation report, draft purchase agreement, exit strategy, or a plan for ROKO to eventually float its shares so Ugandans could benefit from their tax contributions. He only mentioned that the intervention would end in five years, with the company repaying the government for the financial support provided.

The proposal faced little resistance in Parliament, with Deputy Speaker Thomas Tayebwa pushing it through despite public opposition. When Hon. Tayebwa called for a vote, it appeared the nays had it, but the proposal passed anyway. Shadow Finance Minister Hon. Muwanga Kivumbi raised concerns about ROKO’s 27 lawsuits in commercial court and suggested the government seek a controlling stake. He also noted that ROKO’s majority shareholders are Swiss, not East African, as per the Investment Act.

Despite valid concerns, the government’s decision was firm. Minister Musasizi even acknowledged issues like ROKO’s weak management structure but insisted on proceeding with the deal. Leader of Opposition Hon. Mathias Mpuuga criticized the decision, and Deputy Speaker Anita Among suggested looking into local companies needing similar support.

Now, the debate continues on why the government is prioritizing bailing out a Swiss conglomerate over investing in public health infrastructure to keep Ugandans alive.

Tempers flared between backbench MPs and the Executive when Parliament reconvened to reconsider the Appropriations Bill 2024. Speaker Annet Anita Among recalled legislators from recess to address the bill. Although Parliament approved the bill in mid-May, President Museveni refused to assent to it, objecting to the reallocation of over UGX 750 billion.

The President criticized MPs for interfering with the constitutional mandate of budgeting and reallocating funds for core sectors. In a letter dated June 22, Museveni cited previous reallocations amounting to UGX 3.7 trillion over four years, likening it to aborting nine major road projects like the Kampala-Masaka road. He also referred to the arrest of three MPs accused of soliciting a kickback from the Uganda Human Rights Commission chairperson.

Museveni highlighted issues of indiscipline in budgeting, sabotaging national priorities, and massive corruption. He requested that no budget reshuffling occur without the Executive’s input.

Amidst suspicion, Speaker Anita Among led the House to address the “anomaly.” Finance Minister Matia Kasaija moved the motion, facing interruptions from MPs. Despite allegations of corruption, the bill needed to operationalize the 2024/2025 budget was suspect.

Ibanda North MP Xavier Akampulira suggested expunging the President’s compliments to Parliament on budget day from the Hansard. Speaker Among did not rule on the matter, maintaining order in the House.

Matia Kasaija reminded Parliament of the constitutional and procedural requirements for budget allocations. Normally, the Speaker would refer the President’s request to the Budget Committee, but instead, the House reconstituted itself into a committee of supply.

Several MPs alleged that the Budget Committee, chaired by Patrick Isiagi, had turned into a “scene of crime.” Isiagi defended the committee, explaining the reallocations aimed to address critical unfunded priorities.

State Minister for Finance Henry Musasizi confirmed the reallocation of the 2024/2025 budget affected sectors like the Uganda Development Bank and the Ministry of Energy. He highlighted other sectors impacted, raising suspicions that MPs shifted resources closer to their constituencies.

Experts criticized Parliament for altering the budget presented by the Executive. Some MPs resisted returning funds to their original allocations, arguing that they were representing the people’s interests. Speaker Among emphasized the consultative nature of the budgeting process.

As the debate continued, it became clear MPs would concede to revising the budget per the President’s request. However, Kiira MP Ssemujju Nganda noted that UGX 300 billion was being reinstated to pay ROKO Contractors, a private company, which Parliament had already allocated UGX 270 billion. Attorney General Kiryowa Kiwanuka justified this as part of a motion for the government to buy shares in ROKO.

In justifying the budget reallocations, Patrick Isiagi explained that the committee aimed to address critical needs, such as increasing funds for agricultural mechanization, constructing sub-county offices, and grant-aiding schools. However, several health and education initiatives suffered setbacks due to the reallocated funds being restored to their original votes.

Ultimately, all reshuffled funds were reinstated as per the President’s request.