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Ugandan MPs drown in debt

MPs appeal to president for financial help despite being amongst some of the highest paid in Africa.

Last updated: 03 Sep 2014 14:02
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Phillip Wafula Oguttu, leader of Ugandas opposition in parliament [Eriasa Sserunjogi Mukiibi/Al Jazeera]

Kampala, Uganda - Nakato Kyabangi Katusiime, 42, had been used to the comfortable life that Ugandan MPs enjoy, but for the next six months, she will - unless she pays up - be confined to civil prison, deprived of the freedom she has always taken for granted.

Her problem, like many other Ugandan MPs, is debt. When she was arrested on August 26 and sent to prison, the lawyer representing the company from which she borrowed 100m shillings ($38,400) told a court in Kampala, the capital, that Katusiime had not shown any willingness to repay the money. She had only repaid 30m shillings.

Yet Katusiime and her colleagues in parliament are some of the most highly paid people in Uganda. A Ugandan MP earns 20m shillings ($7,680) a month - way above the annual average income, which stands at $510.

News of Katusiime's imprisonment made headlines as Felix Okot Ogong, an MP from the governing National Resistance Movement (NRM) and a former minister in the current government, is struggling to stop a commercial bank from attaching his mansion, which he had staked as collateral to acquire a loan. 

The problem of MPs' indebtedness has become so serious that Wafula Oguttu, the leader of the opposition, said recently that President Yoweri Museveni - who in 2005 offered MPs monetary inducements to remove term limits from the constitution - was personally intervening to bail out the legislators. Oguttu alleged that each indebted MP received $42,000 from Museveni. 

Ogong, however, dismissed that claim, saying, "I guess that is just speculation."

Some MPs, including the one who coordinates the ruling party members in the house, Justine Kasule Lumumba, also have denied that such money was handed out and have even threatened disciplinary proceedings against Oguttu, who maintained that he is "increasingly sure" that the money was given out.

Ogong is not the worst off though. Some of the other publicised cases include one legislator who was recently jailed for failing to pay off his debts and another who had lost his mansion over debt.

Debt repayment pressure started to pile on MPs much earlier in the life of the current parliament, which is now in the fourth year of its five-year term.

It prompted a Chinese bank to develop the idea of buying off the politicians' debts and offering them better repayment terms.

Some MPs had secured short term loans at commercial interest rates, which they hoped the Bank of China would buy off with lower interest rates and longer repayment periods.

But President Museveni rejected the idea, according to Joseph Tamale Mirundi, the presidential spokesperson.

Why the debts?

But why do the MPs, who earn much more than most other Ugandans, find themselves deep in debt?

Ogong offered some insight. Legislators, he said, have to meet a lot of demands by voters and by the time they get elected they will have made a lot of pledges, which they strive to fulfil using personal money in order to stand a chance of getting re-elected.

"It is not like in some developed democracies where it is the organisation campaigning to get elected," Ogong said, "but here it is the individual campaigning." Other legislators, he said, fail to repay their debts as they strive to keep up standards and "maintain the image of an MP".

It is usually newcomers in parliament who fall prey to debt repayment problems, "partly because they are still very excited", according to Oguttu, who worked as a newspaper editor before joining politics.

Yet not all MPs who have run up debts are new in parliament. Ogong has been an MP since 1996, including the five years between 2001 and 2006 when he was also a minister.

So how did Ogong fall prey to the same problem?

He said, without specifying, that his was a case of failed projects.

"You start projects which do not succeed; the casualty rate of businesses here [in Uganda] is high," he told Al Jazeera. In other cases, he said, the MPs get cheated by the people they entrust their businesses with.

Museveni the saviour

The cause of the MPs' debt woes does not seem to matter as much as the effects of the debt crisis, or even as the methods adopted to solve it.

Betty Nambooze, an opposition MP, said Museveni should have let the Chinese bank buy off the legislators' debts instead of trying to bail them out himself.

The President blocked the deal with the Chinese bank because he wanted the MPs to be deeply indebted so that he would control parliament [by giving the MPs money].

- Betty Nambooze, an opposition MP

"The President blocked the deal with the Chinese bank because he wanted the MPs to be deeply indebted so that he would control parliament [by giving the MPs money]," said Nambooze.

But the presidential spokesperson, Mirundi, said that it was an issue of "strategic national importance" to block the deal with the Bank of China.

Mirundi said that he is not in position to officially comment on whether Museveni gave the MPs the money or not, because, it is "a party issue" yet he only speaks for the president. The party spokespeople deny that any money was given out to the MPs.

But Moses Khisa, a political scientist, said that it is hard for the ordinary Ugandan to dismiss the talk about the MPs having received the money as mere rumour.

"Parliamentarians have had a track-record of picking up money from the president under questionable circumstances for now about a decade, since 2005 when they picked up money and deleted the presidential term limits," Khisa told Al Jazeera.

"They passed a supplementary budget towards the 2011 elections and they were each given 20m shillings [then equivalent to about $8,000] purportedly to go and supervise government projects."

Parliament 'compromised'

According to different Ugandan newspaper reports, the MPs have appealed to Museveni for help on a number of occasions. Mirundi neither denies nor confirms this.

But Nambooze said that there is a danger to this; that by the MPs running to Museveni for financial help, "the independence of parliament is compromised".

Although well over two-thirds of the MPs are ruling party members or sympathisers, the current parliament started out robustly, sometimes going against Museveni's wishes.

At some point, for instance, the MPs signed up and recalled the house from recess for an emergency debate on claims of bribery in oil exploration and production deals against Museveni's will.

Nambooze said that Museveni has since brought parliament under tight control.

The ruling party legislators have on a number of occasions received money from the president amidst protests by critics. A few months ago, each of them received "facilitation" to popularise a resolution the MPs made recommending to the party organs that Museveni is not challenged for the party's ticket in the 2016 election.

But the figures involved were in the past much lower than what Oguttu said was handed out to the MPs this time.

Francis Mwijukye, a youth leader in the opposition party Forum for Democratic Change, wants to take the issue to ordinary Ugandans.

"We are organising all Ugandans who have debts to go to the sole giver [referring to Museveni] for a bailout," Mwijukye said. "We shall also be mobilising the people to go to their MPs for money to settle their debts."

In short, Mwijukye - an aide to leading opposition figure Kizza Besigye with whom he has participated in several demonstrations before - is calling on Ugandans to demonstrate over the reported bail-out.

However, he did not say when it will happen. But if Ugandans rise up against the MPs in this instance, they will be just one other source of pressure on the legislators.

Until a few months ago, parliament would guarantee loans to MPs, undertaking to channel the borrowers' salaries through the lending banks.

The Parliamentary Commission has since lifted the guaranteeing of loans by parliament, saying, among other things, that the institution had been turned into a debt collection agent by the lending institutions.

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Source:
Al Jazeera
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