Compensation claims for livestock grabbed by President Yoweri Museveni’s National Resistance Army fighters soon after they took power in 1986 has pushed the amount of money the Uganda government could potentially pay out in court awards to Ush4.2 trillion ($1.43 billion), more than a quarter of the national budget, an investigation by this newspaper can reveal.
Of the figure, about Ush3.6 trillion ($1.22 billion) is potentially compensation for livestock grabbed by the victorious army in the north, east and north-east of the country.
Documents seen by The EastAfrican show that the Ministry of Justice and Constitutional Affairs has notified the Treasury of the figure as contingent liability for ongoing civil litigation against the government.
Some of the cases have been decided in favour of litigants and are awaiting the outcome of government appeals, while others are estimated costs of the lawsuits and compensation demanded. While the actual figure could be significantly lower, it could also be higher, depending on the decision of the courts in each case.
The Permanent Secretary in the Ministry of Finance, Keith Muhakanizi, who is also the Secretary to the Treasury, has raised a red flag over the size of the potential claims.
“I can’t pay all that money at a go and I am living under the threat of jail,” Mr Muhakanizi said, referring to the individual liability that he would theoretically have to bear, if the government fails to pay. “It is getting out of hand but a court case is a court case.”
Mr Muhakanizi recently announced a supplementary budget of Ush800 billion ($272 million), of which Ush403 billion ($137 million) was to cover a funding shortfall on debt obligations and compensation arising from court cases. The money also included an extra Ush10 billion ($3.4 million) to the Justice Ministry to pay court awards.
Investigations by reveal, however, that the government faces an outstanding court debt bill ten times bigger, and which is equivalent to the combined spending on health, water, education and agriculture in Uganda this financial year.
Most of the contingent liability is for court cases arising from war claims, in particular compensation for livestock that communities in the north, east, and north-east claim to have lost to cattle rustlers and marauding fighters of the victorious rebel group, which has since become the national army, the Uganda People’s Defence Forces (UPDF).
The Justice Ministry has indicated a contingent liability of Ush1.3 trillion ($0.44 billion) — more than this year’s budget on health — for compensation of livestock taken by Karimojong cattle rustlers and NRA fighters from Teso sub-region.
A separate claim for compensation for livestock in the same area has an estimated liability of Ush350 billion ($119 million).
The debt stock also includes an Ush1.2 trillion ($0.41 billion) contingent liability for compensation for livestock taken by the NRA from Lango sub-region, with another Ush600 billion ($204 million) claimed in the same area.
Compensation claims for livestock in other areas are estimated at Ush79 billion ($26.9 million) for Acholi, Ush25 billion ($8.5 million) for Karamoja, and Ush8 billion ($2.72 million) for Kapchorwa.
The post-war livestock compensation claims remain unresolved three decades after the government took power. While many of the stolen cattle ended up in the private ranches of senior regime officials, there are also reports of inflated claims and compensation paid to unaffected parties.
“We need to know who counted those cows and how they came to those numbers,” Mr Muhakanizi said.
A report released in December 2014 by Gulu district chairman Martin Ojara Mapenduzi found that money meant for members of the Acholi War Debt Claimants Association was shared out by ministers and other officials, with very little going to genuine claimants.
President Museveni has ordered a fresh verification of the claims.
The rest of the claims arise from contractual disputes with government ministries and agencies, compensation claims for ranches taken over by the central government to resettle landless people, and Ush150 billion ($51 million) in a pensions dispute with the Uganda Government Pensioner’s Co-operative Society.
The court debts have been rising steadily on the back of a growing culture of litigation, disregard for public procurement procedures, financial mismanagement by contracting government agencies, as well as ever bigger court awards.
In August 2014, Solicitor General Francis Atoke told the Public Accounts Committee of Parliament that the government was not doing enough to quickly clear court awards and interest charged on them, with one account showing that the figure had risen by 200 per cent in a 12-month period.
Accompanying him before parliament was Dennis Bireije, director for civil litigation in the Ministry of Justice, who told MPs of outstanding court awards that continued to attract daily interest.
He gave an example of Ush12 billion ($4.1 million) awarded to a stationery firm in June 2001 but which increased by Ush7.2 million ($0.002 million) per day due to an annual interest rate of 22 per cent. Another case, Adonia Tumusiime v/s Attorney General, attracted interest of Ush18 million per day.
In a telephone interview with The EastAfrican, Mr Bireije said although the escalating awards were a source of “worry”, government lawyers were not to blame for losing the cases, or for the failure to pay them off.
“Ministries enter into contracts and don’t pay or honour their part of the contract so the other parties take us to court and we find that we have to pay, including damages and interests,” said Mr Bireije. “It is a problem of having weak cases [to defend].”
According to the official, part of the problem is that government agencies that breach contracts and trigger compensation claims do not have to pay the money out of their budgets, a position the Ministry of Justice wants changed.
“We have written a Cabinet paper to say that the respective ministries should pay the award out of their budget if the court rules against them,” he said. At the moment these ministries don’t feel the pinch when [Ministry of] Justice settles their debts.
Mr Bireije said compensation awards arising from torture claims were another problem but one whose perpetrators go unpunished under the current system where all claims are paid by the Ministry.
He said: “When an army officer or a policeman tortures someone ad government is sued and forced to pay, nothing happens to them. If the relevant institution, say Police or the Army, were to pay out of their budget, they would go the extra mile to sanction the responsible official. At the moment they don’t even know that the person they tortured took government to court and got money.”
Some government officials are in favour of borrowing a long-term, low-interest debt to settle the outstanding sums once and for all, and avoid them increasing by lieu of interest charged on outstanding payments.
However, Mr Muhakanizi is opposed to the idea. “We cannot borrow beyond what we are already borrowing,” he said. “It would destroy the economy.”
The Finance Ministry mandarin said he is working to ensure that ministries get all the money they are allocated in the budget in order to stop them from defaulting on their contractual obligations. However, this, Mr Muhakanizi said, is dealing with the symptom, and not the cause of the problem.
“We should look at the causes of these court cases and the amounts that are being awarded; what were the causes of the court case in the first place?”
The growing size of court awards has contributed to the large debt. For instance, in February 2013, Severino Twinobusingye, a lawyer close to former prime minister Amama Mbabazi was awarded Ush11 billion ($3.74 million) in costs after successfully asking the Constitutional Court to declare that Parliament did not have the authority to force Mr Mbabazi and other ministers, then adversely named in corruption allegations in the House, to go on forced leave pending an investigation.
Mr Twinobusingye’s lawyers had asked for Ush20 billion ($6.8 million) and in justifying the award Court Registrar Eriasi Kisawuzi claimed the petition was “one of a kind given the novel issues on parliamentary democracy and constitutionalism it involved”.
The registrar shot down arguments by the losing government lawyers that the matter had taken only four hours to plead at a cost of about Ush30 million ($0.0102 million). The compensation was later referred to a review on appeal by the Office of the Attorney General but it is not clear whether it has since been paid.
Court awards have a dubious record in Uganda. In the early 2000s the government lost billions of shillings to a racket involving government officials and lawyers, in which they connived with private firms to reinstate compensation claims that should have been time-barred, and made fresh claims against the government.
In 2004, the Inspector General of Government found that a law firm associated with a government minister at the time had connived with state lawyers to win several big compensation claims against the government, part of the $120 million paid out between 1999 and 2003 in such cases.
In at least one case, the IGG’s office found the almost half of the compensation awarded had been “shared among key officials in the Ministries of Finance, Justice and the lawyers involved”. Some of the money was reported to have been spent on campaigning for the government during election time.
The sharp rise in the contingent liability arising out of court awards is parallel to a sharp rise in Uganda’s public debt as the country borrows heavily to finance investments in energy and transport infrastructure as well as raise salaries for public workers.