KAMPALA — The Patriotic League of Uganda (PLU) has asked the Ministry of Finance and other government agencies to halt an alleged US$14 million (about Shs52 billion) payment linked to Presidential Advisory Committee on Exports and Industrial Development (PACEID) chairman Odrek Rwabwogo, pending clarification of the committee’s legal status and the circumstances surrounding the claim.
Kasambya County MP David Kabanda, who also serves as executive secretary to PLU chairman Gen Muhoozi Kainerugaba, said the organisation wants government agencies to suspend dealings with PACEID until questions concerning its establishment, financing, staffing and accountability are resolved.
Hon. Kabanda was conveying a position attributed to Gen Kainerugaba, who has publicly described PACEID as an illegal entity and questioned the legal framework under which it operates.
According to Hon. Kabanda, while the President has constitutional authority to create, abolish or merge government departments and agencies, such institutions should operate within an appropriate legal and administrative framework providing for staffing, funding, governance and accountability.
He questioned PACEID’s position within that framework, including who serves as its accounting officer, how its staff are recruited and paid, who finances its offices and where it submits financial accountability.
Dispute over Shs52bn claim
The dispute has intensified over allegations that Rwabwogo is in line to receive about US$14 million from the Ugandan Government in relation to the supply of helicopters and other materials to South Sudan.
Hon. Kabanda alleged that the transaction involved Thomas Farm Company Limited, which he said is associated with Rwabwogo. He questioned why Uganda’s Treasury would be responsible for the payment if the alleged supplies were made to the South Sudanese government.
He further questioned how a company whose registered activities he described as being related to milk could have become involved in a transaction involving helicopters and supplies.
He said information reaching PLU indicated that the Ministry of Finance was preparing to make the payment and called for the transaction to be stopped.
However, the specific US$14 million claim, the contractual arrangements surrounding the alleged helicopter supply and the legal basis for Uganda’s responsibility for the payment had not been independently established from the material available for this report.
South Sudan debt history
The dispute has also revived the history of Uganda’s involvement in supplying commodities to South Sudan during the country’s civil war.
In 2018, Parliament recommended that Government pay outstanding arrears of about US$41 million, equivalent to Shs150 billion at the time, to 10 Ugandan companies that had supplied maize and sorghum to South Sudan.
The companies, operating under the Uganda South Sudan Grain Traders and Suppliers Association Ltd, reportedly supplied maize and sorghum worth about US$56 million to 10 South Sudan states between 2008 and 2010 under the Strategic Grain Reserves Suppliers arrangement.
According to the material provided, Rwabwogo’s Thomas Farm Limited was reportedly not among the original 10 beneficiaries but later claimed to have supplied helicopters and spare parts during the conflict.
It is this background that PLU is citing in its demand for the alleged payment to be blocked.
Rwabwogo defends PACEID
Rwabwogo has rejected the allegations and defended the legal status and work of PACEID.
Speaking to journalists on Tuesday, he said PACEID was established on March 16, 2022, with a mandate to open export markets for Ugandan products, before being placed under the Office of the President on May 25 of the same year.
He said the committee’s mandate could only be terminated by the President, who created it, and that President Yoweri Museveni had told him that no such termination order had been issued.
Rwabwogo said PACEID had been working on improving food safety and export compliance, negotiating transport and infrastructure arrangements and facilitating low-cost financing for companies with confirmed export orders.
He also claimed that PACEID had surpassed its initial target of generating US$6 billion in exports, contributing to an increase in Uganda’s exports from about US$4.5 billion after the Covid-19 pandemic to approximately US$13 billion.
He said the organisation was entering a second phase focused on establishing aggregation, cooling and drying centres across 18 zones to address supply constraints affecting exporters.
Wider questions over PACEID
The controversy has expanded beyond the alleged payment to questions about PACEID’s institutional mandate, its involvement in trade diplomacy and the private business interests of its chairman.
Hon. Kabanda questioned PACEID’s reported involvement in appointing or deploying trade envoys, arguing that Uganda’s Ministry of Foreign Affairs and diplomatic missions are responsible for the country’s external relations.
PLU has also called for government agencies and local governments to stop dealing with PACEID until its legal status is clarified.
Meanwhile, Gen Kainerugaba has accused the committee of corruption and threatened arrests of individuals he said were involved in wrongdoing. He has also criticised media organisations that have provided PACEID officials with platforms to respond to the allegations.
Rwabwogo, who is married to President Museveni’s daughter, has defended PACEID and its work, while the committee has rejected accusations that it operates outside government structures or misuses public resources.
PACEID was established as a presidential initiative aimed at promoting Uganda’s exports and industrial development. Its activities have included efforts to address challenges facing exporters, promote Ugandan products in international markets and support investment and value addition.
The emerging dispute has therefore placed renewed focus on the legal foundation, financing and accountability of presidential initiatives, as well as the procedures through which public funds are committed and paid.
Any decision on the alleged US$14 million payment is likely to attract further scrutiny given the size of the claim and the competing positions surrounding the transaction.