By PATRICK JARAMOGI
KAMPALA-SHIFTMEDIA- Whoever poked his fingers in the Covid 19 stimulus package and Emyooga funds will regret, President Yoweri Museveni has warned.
The warning arises out of a dossier presented to the fountain of Honor regarding how the Emyooga funds meant for the struggling Small and Medium Scale Enterprises (SMES) has been abused.
As we write this, we are reliably informed that the Head of State House Anti-Corruption Unit.Col Edith Nakalema (She has been promoted by Commander in Chief) has been instructed to ensure the culprits are apprehended for sabotaging government programs.
A top source said Gen. Salim Saleh the Coordinator of the Operation Wealth Creation (OWC) had penned the missive to President Museveni regarding the need for accountability of Emyooga funds.
On Sunday Civil Society Organizations (CSOs) headed by the Southern and Eastern Africa Trade Information and Negotiation Institute (SEATINI), Uganda released its findings regarding the public perceptions on the disbursement and management of the funds allocated to the Stimulus Package by the Government of Uganda.
The findings conducted in scores of districts in Uganda revealed that Emyooga was for the affluent. “Emyooga is a joke. Unlike what people presumed to be grants from the government, they are in fact loans,” said Joanita Nassuna the Program Assistant, Women and Economic Justice at SEATINI Uganda.
“It is so frustrating,” she told the press at their Bukoto offices. “We discovered that Microfinance Support center gives the SACCOs the loans at 8% and the clients borrow at 12%, which is so unfortunate given the struggling economic conditions due to covid 19,” said Nassuna.
She said that the pandemic had greatly affected businesses, especially the Micro, Small, and Medium Enterprises (MSMEs) who comprise over 90% of Uganda’s Private Sector.
The CSOs were concerned that despite government efforts to cushion MSMEs affected by the pandemic, the economic Stimulus Package worth Shs2.6 trillion hasn’t been beneficial to hard-hit Ugandans.
“It is key to note that the government did not start up new programmes for this purpose aforementioned but rather looked at the already existing programmes and recapitalized them with the objective of offsetting the economic impacts that came as a result of the COVID-19 pandemic,” said Nassuna.
She noted that the package was meant for Re-igniting business activity by providing credit through Savings and Credit Cooperative Societies (SACCOs) and Micro Finance Institutions to support MSMEs.
“Though the funds disbursed to Uganda Development Bank (UDB) was to allow access credit at low interest, accessing the funds has become a hurdle due to many restrictions and demands,” she said.
According to Patricia Ojangole, the UDB boss, government in August 2020 released Ugx455 billion as a recapitalization grant to the entity. Surprisingly according to John Walugembe the Executive Director Federation of Small and Medium-sized Enterprises (FSMEs), a total of Ugs242b was disbursed by UDB by January 2021.
“By the time UDB made calls for funds application they had already disbursed Ugx242 billion. Who were the beneficiaries of these funds?” he asked.
Walugembe said UDB made it so hard to access the funds by raising the cap of money to be borrowed to Ugx100m. ‘Very few of our members can access such loans given the stringent conditions,” he said.
He said conditions such as feasibility studies, business plans, current audited book of accounts, URA tax clearance are demands only the affluent can manage.
“If you are to apply for Ugx100m, you need to spend at least shs60m first before you can be approved. Who has this money given the economic gaps caused by Covid 19,” said Walugembe.
Though UDB disbursed Shs242 billion to vital sectors of the country, and another Shs192 billion to the struggling businesses in primary agriculture, agro-industrialization, and manufacturing, the largest beneficiaries were from Kampala metropolitan area.
Abuse of Emyooga Funds:
Nalweyiso Teddy a disgruntled SACCO leader from Wakiso narrates a harrowing tale of how accessing the Emyooga funds is a nightmare.
“Government asked us to form SACCOs. Each SACCO brings between 30-40 associations with 30-40 members each. That means each SACCO has between 300- 500 members,” said Nalweyiso.
“But each SACCO is given only shs30m, of which it is a requirement that we must have saved shs10m in our account. How do we share the shs20m as 300 or 500 members?” explained the perturbed Lady. She describes Emyooga as a big “joke”.
Though the Microfinance Support Centre received Shs260 billion shillings as funds for the Emyooga Programme, with shs188b disbursed so far, the reality on the ground indicates very few people have accessed these funds.
Recommendations and Proposals:
- Government should fast track the accessibility of the Emyooga funds which are already disbursed on the SACCO accounts yet are not being accessed.
- The government through the Ministry of Trade should also look into the pace at which Certificates of Incorporation are being released to the Emyooga SACCOs.
- The government of Uganda should as an alternative disburse these funds to MSMEs through their associations such as Uganda Small Scale Industries Association (USSIA) , Federation of Small and Medium Enterprises (FSME) , Uganda Women’s Entrepreneurs Association Limited (UWEAL) which have structures and membership across the country.
- Government should review and address the identified challenges like the minimum loan sums, high-interest rates, and the intended beneficiaries.
- UDB should review the stringent eligibility criteria being used to qualify and disburse the entrusted funds.
- UDB should also periodically publish the list of beneficiaries as part of the accountability process to the general public.
- UDB should negotiate the loan conditionalities with the Uganda Manufacturers Association (UMA) to allow UMA members to access the Stimulus Package with favorable conditions as opposed to individual members.
- Ministry of Finance, Planning, and Economic Development should develop a comprehensive COVID-19 Stimulus-response plan taking into consideration the MSMEs who have been impacted by COVID-19.
- UDB, Microfinance Support Center and others should exhibit more transparency in the manner in which the Stimulus Package is designed for the benefit of vulnerable Ugandans impacted by COVID-19.
- The International Monetary Fund should hold the Government of Uganda to account for its commitments made when requesting the stimulus package.