The Minister of State for Planning, Ministry of Finance, David Bahati has backtracked on his earlier comments that the Petroleum Fund had been depleted, now saying the Fund has some money in it.
Bahati said these on Tuesday, January 21 while appearing before Parliament’s Budget Committee where he had been summoned to present the 2020/2021 National Budget Framework Paper.
The Minister said, “The Petroleum Fund isn’t empty, there is Shs70bn in our fund and we use this fund according to law, we follow the laid down procedure and we have never picked this money without the knowledge of parliament.”
It should be recalled that last week, Bahati while appearing before the Finance Committee said that the Petroleum Fund had been depleted and there was no money that would be drawn from the Fund to support the budget as has been the case in the recent years.
The Petroleum Fund (Fund) is established by section 56 of the Public Finance Management Act (PFMA), 2015 and the Fund serves as a depository for all revenues accruing to government from petroleum and related activities. Disbursements from the Fund are through an appropriation to either the Consolidated Fund or to the Petroleum Revenue Investment Reserve Account.
The Petroleum Fund is managed by Bank of Uganda and the Fund operates three accounts including; a dollar and shillings accounts and a third account is in New York to facilitate the investment of revenue.
The Minister’s earlier revelation followed a question posed by Henry Musasizi, Chairperson Finance Committee who asked Bahati to clarify why in the coming budget for 2020/2021 there wasn’t any allocation made to spend money in the Petroleum Fund as has been the norm in the recent years.
Bahati said, “This year there is no allocation, there isn’t money in the Petroleum Fund, we appropriated it last year, what was there so we can’t get what isn’t there.”
It should be recalled that in the 2018/2019 budget, the government withdrew Shs200Bn from the Petroleum Fund and in 2019/2020, Government also withdrew Shs445Bn from the Fund.
However, in May 2019, MPs on Parliament’s Budget Committee called on Government to contain the appetite for the oily funds before production kicks off with calls to have an investment plan put in place for the utilization of the petroleum funds before the resources are depleted.