A new report has revealed that government is threatening to deplete oil revenues from the Petroleum Fund even before production kicks off.
The Report of Budget Committee on 2019/20 budget estimates released this week further adds that government is spending the funds without an investment plan which is contrary to the Public Finance Management Act 2015.
Presenting the report to Parliament, Budget Committee Chairperson, Amos Lugoloobi said his Committee discovered that the Government had not put in place a Petroleum Investment Framework as envisaged by the Public Finance Management Act 2015, to guide the Investment of funds from the Petroleum Fund.
“Government should without delay put in a place a Petroleum Investment Framework to guide the investment of Funds from the Petroleum Revenue Investment Reserve,” Lugoloobi said.
The Committee recommendation followed evidence before Parliament that showed that as of end of December 2018, the value of the Fund stood at Shs288.74bn (Shs1 trillion), with documents indicating that the reduction in the fund value from Shs470.4bn (1.76 trillion) reported in June 2018 was due to the transfer of Shs200bn to the Uganda Consolidated Fund to finance the FY 2018/19 budget.
“It is noted that the fund is not growing because there is high appetite to utilize petroleum funds to finance the budget. However, it is not clear what the money from the Petroleum Fund is spent on contrary to Section 59(3) of the PFMA 2015,” Lugoloobi told Parliament.
Additionally, the Committee also faulted Uganda Revenue Authority for holding onto Shs2.5bn due to the Fund as a receivable as at 31st December 2018, with the MPs warning URA from holding Petroleum funds or remitting the funds directly to the consolidated fund.
“Petroleum funds collected by URA, PAU and any other government agency should be submitted to the petroleum fund without undue delay,” the Committee Chairperson added.