By Moses Kaketo
When Hon. Matia Kasaija was appointed Finance Minister on 1 March 2015, replacing Hon. Maria Kiwanuka, analysts questioned his ability to manage the ministry and the economy as a whole. Their argument was simple: Mr. Kasaijja is a politician with limited knowledge of economic matters. His appointment was seen by many as temporal.
It was assumed that after the 2016 general elections, Hon. Kasaija would be dropped. He has however, managed to survive the axe [ at least for now]. This has come at a cost to the economy.
Let’s look at the figures and key gaps during his tenure.
There is a general feeling among some Ugandans that the image of the ministry of finance has been dented during Hon. Kasaija’s reign. It is said, the ministers’ ability to grasp economic issues, and ability to relate with donors and investors is wanting.
The Ministry of Finance is about marketing: marketing to the outside world- to the donors and investors. A good minister of Finance must be able to market the country.
Hon. Kasaijja has failed flat on this front. Here are some figures for you.
Foreign direct Investment (FDI) has declined to a record low, from $1.08 billion in 2015 to under $ 300 million. That is in a space of two years.
It is also during Kasaija’s reign, that corruption at the ministry of Finance and its agencies worsened. That the president recently branded the ministry -a home of thieves. Two Ministry of Finance officials were recently nabbed and later charged for soliciting money from investors.
The World Bank also cancelled loans to Uganda reportedly on corruption allegations, although it was disguised as abuse of human rights. It is alleged that some government officials would deposit donor money in a local commercial bank to earn interest before it is used for its intended purpose. The question remains, who was earning the interest on this money?
President Museveni recently took a leap of faith by deploying the military to fight reported graft in Uganda Investment Authority and restore foreign investors’ confidence.
According to the Daily Monitor, president Museveni instructed the state minister for Privatization, Ms Anite to set up a customised anti-corruption office at UIA headquarter in Kampala and a toll-free line to enable investors and members of the public to report corruption cases to the UPDF. The soldiers, according to Ms Anite, will also handle complaints about delays in approving investment projects.
Corrupt civil servants were reportedly asking investors to give them bribes including, shares of up to 10 per cent in their companies before approving their projects.
The Minister added: The information we have is that 80 per cent of investors in Rwanda, first came to Uganda and left because there is corruption in the Ministry of Finance where I sit. And then came the presidential handshake the minster went ahead to confess that he authorised the payment while Governor Bank of Uganda had reservations on the same payment. As they say, the rest is history.
Fall in revenue collection
It is also during his tenure that economic growth has been at its lowest. For instance, during FY 2015/16, the econ¬omy grew by 4.8% and in FY 2016/17, it slowed to 4.5%.
This was below the National Development Plan II target of 7%. The projected growth of 4.5% for the FY2016/17 is also unlikely to be achieved according to the Bank of Uganda Monetary Policy Statement of April 2017
It is during his tenure that goverment delay in clearing its domestic arrears reached its peak which is not only affecting tax mobilization, but also eco¬nomic growth in the long-run.
The current government’s outstanding arrears amount to Ugx. 2.7 trillion, with an attributable tax of Ugx. 116 billion. Government delay in paying its domestic debt is attributed to fall in revenue collection-which is estimated to 300 billion.
Sluggish, crisis at Ministry of Finance agencies
You can call it bad luck or poor management. Whatever, you call it, its during Hon. Kasaija’s tenure that Agencies attached to Ministry of Finance have either experienced leadership crisis or have become dormant.
You can rightly say, since his appointment, the Uganda Capital Markets Authority went to sleep. The authority can be described as dormant, yet its role in stimulating the economy by attracting investment, local and foreign is well articulated.
There has also been leadership crisis at PPDA, National Social Security Fund (NSSF) among others. The NSSF is said to have lost millions of savers money thanks to leadership wrangles that had to be sorted by court [ between the Managing director Richard Byarugaba and his assistance Geraldine Ssali] which Kasaija failed to solve early.
Kasaija’s problems at the ministry of Finance were worsened by the state Minister for Privatization. With no background in business and Finance [ from fresh from University Ms Anite briefly worked at Media Centre] before she was appointed State Minster for Youth and thereafter state minister for Privatization.
Some analysts say her knowledge of economics matters is said to be wanting. You need listen to her talk about economic issues or talk to her to appreciate this. This is the minister who is supposed to meet and talk to donors and potential investors. Are we getting our priorities right as a country?
When you Compare with Kenya’s Ministers in key positions, then you will understand why we are still where we are.
Kenya’s president, H.E Uhuru Kenyatta, is said to have picked some of the best folks from private sector to manage ministry of Finance and foreign missions. It is said, all ministerial nominees were interviewed personally by the president and his deputy and each nominated member had to justify their contribution if appointed.
The appointment was based on record of success. Kenya’s long-term vision is to become one of Africa’s top three economies. To do this, Kenya is deliberately focusing on promoting trade and commerce, and ensuring that the right people occupy these positions.
Major changes expected at Ministry of Finance
Recently, State Minster for Finance David Bahati acknowledged that the economy was in distress. The truth is that we cannot afford to go on like this as a country.
Analysts say, the appointing authority is very aware of this and a major shakeup at the ministry of Finance is expected anytime from now.
Hon. Kasaija is likely to be sacked as Minister for Finance. To those in the know, Kasaija’s sacking will not be news. After all, it’s the PS ministry of Finance who said to be running the show. It is said, the PS says No or Yes, you don’t need to go to the Minster.
Others expected to lose their positions are Permanent Secretary Ministry of Finance Keith Muhakanizi and the Director Budget.
Who is Matia Kasaija
Matia Kasaija was appointed Finance Minister on 1 March 2015, replacing Maria Kiwanauka. From 27 May 2011 until 28 February 2015, he served as the State Minister for Finance -Planning.
He replaced Ephraim Kamuntu, who was promoted to Minister of Tourism. Before that, he served as the State Minister for Internal Affairs, from 1 June 2006 until May 2011. He is also the elected Member of Parliament for “Buyanja County”, Kibaale District.
According to Wikipedia, after the Ugandan elections of 1980, at the age of 36, Matia Kasaija was elected to the Ugandan Parliament. From 1980 until 1981, he served as the State Minister for Labor.
From 1981 until 1986, he served as a member of the External Wing of the National Resistance Army. Between 1987 and 1990, he served as the Executive Director of the Departed Asian Custodian Board, a government parastatal that was charged with safeguarding the property expropriated from the Asians expelled from the country by Idi Amin in the 1970s.
From 1998 until 1998 he served as the Deputy Director for Mass Mobilization at the National Resistance Movement Secretariat. During the 2006 parliamentary elections, he was elected to the 8th Parliament He was appointed Minister of State for Internal Affairs in June 2006.
Born in Kibaale District on 28 May 1944. He studied at University of Nairobi, back in the 1960s when it was part of the University of East Africa. Kasaija graduated with the degree of Bachelor of Commerce (BCom) circa 1967.
In our next article, we will analyse some of his achievements