Three government agencies, the Uganda Microfinance Regulatory Authority (UMRA), the Privatisation Unit and the Non-Performing Assets Recovery Trust have been sent back to the Ministry of Finance, Planning and Economic Development.
The three rationalization amendment bills were considered and approved by Parliament sitting on Wednesday, 06 November 2024.
While reporting on the Tier 4 Microfinance Institutions and Money Lenders (Amendment) Bill, 2024, the Finance Committee Chairperson, Hon. Amos Kankunda, observed that UMRA has not been able to fully execute its mandate.
“Whereas the authority managed to licence several money lenders and tier 4 micro finance institutions under their mandate, it has not been adequately resourced for the eight years it has been in operation,” Kankunda said.
He added that newer financial services like Parish Development Model SACCOS and similar interests across the country require increased and robust sector regulation.
FDC, Budadiri County West, Hon. Nandala Mafabi reignited a proposal to house the management of Tier 4 institutions including SACCOS, under Bank of Uganda.
“In 2016, the Finance Committee agreed that this function should to go to Bank of Uganda, but government proposed that we create a law to handle Tier 4 institutions. Even if it is small, the person responsible for money is Bank of Uganda,” Nandala-Mafabi said.
Otuke County Representative, Hon. Paul Omara however, counter-argued that Bank of Uganda would require a new structure to manage these institutions.
“If you say that you take that function to Bank of Uganda, they will not accept unless you engage them and they have a specific department that will handle it,” said Omara.
The Attorney General, Hon. Kiryowa Kiwanuka advised that the proposal be should be studied as the House capitalises on the rationalisation process.
According to the Ministry of Public Service, a new department called the Microfinance Tier 4 Management Department will be created in the Ministry of Finance, to take up all the functions of UMRA as provided for under the Act.
Relatedly, following the dissolution of the Privatisation Unit, the Public Enterprises Reform and Divestiture (Amendment) Bill, 2024, will enable the mainstreaming of the functions of the Divestiture Reform Implementation Committee to the Ministry of Finance, in a bid to eliminate duplication of roles.
The committee also tasked the Minister for Finance to present a comprehensive report to Parliament, on divestiture proceeds including among others, details on accounts held in commercial banks and development banks for proceeds from divested companies.
Meanwhile, following a vote to pass the Non-Performing Assets Recovery Trust Act (Repeal) Bill, 2024, the Finance Committee called for a special audit of the Trust since its inception.
“The committee further recommends that the Non-Performing Assets Recovery Trust Tribunal be dissolved with immediate effect and all pending cases, if any, be transferred to the Office of the Attorney General to further cut administratrative costs in line with the rationalization policy of government,” Hon. Moses Aleper, the Deputy Chairperson of the Finance Committee said.
