The National Social Security Fund (NSSF) management has clarified to Parliament that the purported purchase of Nakigalala land has not yet taken place, and the UGX 400b that Minister Betty Amongi claimed was used to purchase one piece of land was actually budgeted for 2 pieces of land – one at Nakigalala and another at Nakawa following a proposed partnership with Uganda Police.
The minister of Gender, Labour and Social Development Hon. Betty Amongi had earlier claimed that NSSF budgeted to purchase land at Nakigalala at UGX 400 billion whereas she had obtained a valuation of UGX. 246 billion for the same.
While appearing before the Parliament Committee investigating corporate governance failures at NSSF headed by Mbarara City South MP Hon Mwine Mpaka, NSSF management led by Ag. Managing Director Patrick Ayota refuted the Minister’s claims.
“The prospect of the acquisition of the Nakigalala land has been ongoing since 26th February 2019. The Fund’s Management evaluated the prospect, via the established processes and procedures, and initially deemed it attractive but was mindful of the risks and the need for thorough due diligence. A provision for UGX 250 billion, including VAT and other contingencies, was made initially in the 2019/2020 budget paper. The Fund considered the purchase subject to resolution of all the legal due diligence issues and compliance with the procurement regulations,” Mr. Ayota said.
NSSF Chief Investments Officer, Mr. Gerald Kassato further clarified that as part of the Fund’s efforts at sourcing for new land, on 9th August 2021, NSSF received a letter from the Inspector General of Police (IGP) requesting a meeting to discuss a potential partnership with the Fund for the development of key infrastructure for a potential purchase of approximately 40 acres of police owned land in Naguru.
“A budget of UGX 150 billion including VAT and contingencies for the Naguru land (including existing developments) then informed a budget estimate of UGX 150 billion. The budget amount for both Nakigalala (UGX 250b) and land at Naguru (UGX 150b) informed the total amount of UGX 400 billion for “Strategic land Purchases” in the FY 2022-2023 budget paper that was submitted to the Minister of Gender for approval”, Kassato also told the committee.
Former Managing Director (MD) Richard Byarugaba also confirmed the same information while facing the committee and insisted that what was indicated in the budget was “purchases” for 2 pieces of land and not “purchase” for a single piece.
Mr. Ayota also told the Parliament Committee that it is important to note that the land has not yet been purchased and will follow all due diligence if at all the Fund goes ahead to undertake the transaction.
“The Fund uses a zero-based budgeting methodology meaning that all spend in the year must be anticipated and budgeted for otherwise without which, no procurement can be undertaken. The budgets reflect an intention to deploy resources on strategic and operational activities, in practice, due to the lengthy due diligence and approval processes, it does not always happen. In the case of Nakigalala, the due diligence reports indicate numerous claims on the property and the transaction is on hold until further notice” Ayota said in his submission to the Parliamentary Committee.
The Ag. MD affirmed that the Fund will have to go through the process of approvals before the final decision is made.
“The Board has not yet approved the procurement of the Nakigalala land pending the completion of the due diligence process per the Board’s earlier directive. The due diligence process has not yet been concluded mainly due to multiple claims on the land which have not yet been resolved by the potential vendor,” he said.
Other members of the committee investigating the Fund include Workers MP Hon Charles Bakkabulindi Hon Karim Masaba (Industrial Division, Mbale City), Hon Michael Kakembo (Entebbe Municipality), Hon Fortunate Nantongo (Kyotera District Woman), Hon Laura Kanushu (Persons with Disabilities), and Hon Amos Kankunda (Rwampara County).