Ugandan parliament looking into alleged corruption affecting co-op sector

The first hearing, relating to the government’s war-loss compensation scheme, took place on 4 September in the Jinja District in eastern Uganda

Uganda’s House Committee on Tourism, Trade and Industry has begun investigations into the alleged financial mismanagement of government funds released to co-operative societies as war loss compensation.

The first hearing took place on 4 September in the Jinja District in eastern Uganda, where committee members met with representatives from Busoga Growers Cooperative (BGC), Jinja Multipurpose Cooperative Society (JMCS) and the beneficiaries of war loss compensation.

They heard how since 2018 the government has paid Shs15.5bn to BGC, only Shs5bn of which has been received by the co-op. The remaining amount went to two law firms – Matovu & Matovu Company Advocates and Makada Company Advocates, in exchange for their support with the compensation application process.

“Who advised you to hire the services of law firms to process your compensation and to be cheated this much?” asked Richard Gafabusa (NRM, Bwamba County).

The hearing revealed the two co-operatives had a memorandum of understanding with the law firms, based on which the firms were allowed to retain 40% of the total compensation money. However, the union claims the firms disbursed only 40% of the money, with 20% going missing.

Testifying before the committee, Haruna Ntuyo, the treasurer of BGC, said that in time the percentage received by his co-op dropped to 20%.

Ntuyo claimed the co-operatives were advised to hire law firms to help them process their compensation money by the then permanent secretary in the trade ministry.

The committee also heard how MCS received only Shs1.5bn out of Shs5.3bn released by the government. The co-op also paid Shs2.1bn to a syndicate of officials on the verification committee in the Ministry of Tourism, Trade and Industry.

“The money was paid to me in cash [and] I would hand it over to the district commercial officer. He said there were officers who had to benefit from this money because they helped us in the verification process,” said the co-op’s chair, Henry Magero. He added that the district commercial officer, James Muganza, did not sign any document on receiving the said funds. The latter denies all allegations.

MPs accused Magero and Muganza of being complicit to the syndicate that diverted the co-operative’s funds.

“There is clear evidence of intentional corruption; for you to give the lawyer all that money to keep cheating you and you do not report the case at all. To give Shs2bn to an individual without him signing anywhere,” said Mpaka.

“We need to streamline how we handle compensations in the near future, for example, the RDC office is critical but we were never involved in this process and in such a case, we are not able to supervise,” said the resident district commissioner (RDC) for Jinja, Richard Gulume, who urged the government to review the compensation programme.

The committee will continue its investigation with hearings in the Mbale, Soroti, Lira, Gulu, Masindi and Nakaseke districts.

According to Ugandan publication The Co-operator, Internal Security Organisation [ISO] and the State House Anti-Corruption Unit [SHACU] are also investigating officials in the Ministry of Trade Industry and Cooperatives [MTIC]. The Co-operator reports that ISO and SHACU have arrested Robert Bariyo Barigye, the commissioner of cooperatives development at MTIC.