CSOs punch holes in the Public Finance Management Bill amendment in favour of UNOC.
Through the Public Finance Management Strategy 2018-2023, Parastatals collect and remit resources to the consolidated fund to allow government ascertain it's revenue position in the treasory single account and rationalize its expenditure. The amendment has no information on the impact of the bill t the economy.
Civil Society Organizations under there umbrella Civil Society Budget Advocacy Group (CSBAG) have expressed there concerns on the failure of the proposed amendment of the public Finance Management bill 2021 to provide information on the impact of the bill to the economy which requires estimates of revenue and expenditure after the bill comes into effect.
The bill that was tabled to Parliament on 27th September 2021 by Ministry of Finance, Planning ad Economic Development containing for clauses has caused an uproar by the members of CSBAG, and Civil Society Coalition on Oil (CSCO) which seek to allow Uganda National Oil Company (UNOC) to retain a portion of the proceeds from the sale of petroleum accruing from government’s interests and UNOC’s financial obligations.
While delivering his speech during a joint press conference held on 8th November 2021 at CSNA offices, the Executive Director CSBAG Julius Mukunda said that whereas amendment indicates that all petroleum revenue is deposited into the petroleum fund, there is no mechanism provided by UNOC as a licensee to meet financial obligations under the difference contracts and has not provided the option of payment of tariff obligations before net proceeds can be deposited into the fund.
He said if the particularly if the second clause that is propose to be introduced if put into operation in the current form, it will give powers to UNOC deposit only the balance of revenue after meeting their obligations which he said is appropriate.
“This clause 5(b) if passed in it current form shall give UNOC authority to deposit the balance of the proceeds retained after expending money’s into the petroleum fund. This will constrain Parliament role in dealing with residual moneys” he said
He called upon Parliament recommend the application of the Uganda Revenue Authority model to attend to UNOC’s operations.
The ED also proposed amendment of the bill to add UNOC in the act to access funds directly from the petroleum fund, allow recurrent expenditure and develop an agreement between the ministry, Bank of Uganda and UNOC to access funds.
“We call upon members of Parliament to reject the proposed amendment of the public Finance Management act 2015, in line with UNOC interests. The bill is likely to undermine the original intention of passing the act” he said
The representative from Civil Society Coalition on Oil, Katabazi said that there is a discomfort when revenue from crude oil is excluded from the petroleum fund which he said creates different norms contrary to the public Finance Management Act and weaken accountability.
The specific clauses in the Act under contention include clause 1 which proposes to amend section 3 of the act to revise the definition of “petroleum revenue”, clause 2 that proposes amendment of section 57 to allow UNOC to retain revenue and spend at source, clause 2 that proposes introduction of section 57(5)(b) that authority to UNOC to deposit money to petroleum fund after spending on their obligations, section 3 that proposes introduction of section 57(5)(b) for UNOC to invest without Parliamentary approval among other clauses.