The leader of opposition in Parliament and Gulu Woman Member of Parliament, Betty Aol Ocan, has urged fellow legislators not to approve the funds meant for recapitalization of the Bank of Uganda (BoU), arguing that the local banking industry regulator will continue with financial indiscipline if bailed out in the budget for the financial year 2020/2021.
The LoP’ made the remarks as she responded to the 2020/2021 National Budget Framework Paper prepared by the Ministry of Finance, Planning and Economic Development (MFPED) where BoU has asked for Shs480 billion for recapitalisation come the new financial year.
But Ocan said that since BoU supervises the commercial banks, it needs to lead by example by exercising fiscal discipline as it spends the taxpayers’ money.
She said if BoU is granted its wish, its budget will be more than that of other crucial sectors such as tourism which brought in $1.6 billion, Ministry of Gender, Labour and Social Development and the ministry of Trade and Industry.
“The bank should consider utilisation of savings on government accounts, a drawdown of general reserve funds and deposit auctions as well as repurchase agreements,” she wrote.
She said Bank of Uganda should explore all other avenues before seeking any recapitalisation.
Meanwhile, the Auditor General’s report released December 2019, has names BoU as the most loss-making government entity, making losses of about Shs855.585 billion.
Further, a probe carried out by parliament’s committee on Commissions, State Authorities and State Enterprises (COSASE) from later 2018 to early 2019, faults BoU of failing to account for a big portion of Shs478 billion it claimed it injected in Crane Bank in Receivership, with some sources saying the money could have been swindled by senior officials as they failed to present all documents related to the expenditure of the money.