Finance Ministry Takes over Three Agencies

In a move to streamline operations, the Uganda Parliament has approved amendments sending three government agencies—the Uganda Microfinance Regulatory Authority (UMRA), the Privatisation Unit, and the Non-Performing Assets Recovery Trust—back to the Ministry of Finance, Planning, and Economic Development.

The decision followed the passage of three rationalisation amendment Bills in a parliamentary session held on Wednesday, 6th November 2024.

While presenting the Tier 4 Microfinance Institutions and Money Lenders (Amendment) Bill, 2024, Finance Committee Chairperson Amos Kankunda highlighted UMRA’s challenges in fully executing its mandate. "The authority has licensed numerous money lenders and Tier 4 microfinance institutions under its mandate, but it has not been adequately resourced during its eight years of operation," Kankunda noted. He stressed the need for increased regulation, especially with new financial services like Parish Development Model SACCOS emerging across the country.

Nathan Nandala-Mafabi (FDC, Budadiri County West) revived a proposal to place Tier 4 institutions, including SACCOS, under the jurisdiction of the Bank of Uganda, arguing that the Bank of Uganda should manage financial institutions. Otuke County’s Paul Omara, however, contended that the Bank would require a new department to handle such responsibilities effectively.

The Attorney General, Kiryowa Kiwanuka, recommended further study of this proposal during the rationalisation process. In line with the restructuring, the Ministry of Public Service announced the creation of a new Microfinance Tier 4 Management Department within the Ministry of Finance to absorb UMRA's functions.

Additionally, the Public Enterprises Reform and Divestiture (Amendment) Bill, 2024, will integrate the Divestiture Reform Implementation Committee’s functions into the finance ministry, eliminating redundancy following the Privatisation Unit's dissolution.

The Finance Committee also mandated a comprehensive report on divestiture proceeds, covering account details in commercial and development banks. Furthermore, with the passing of the Non-Performing Assets Recovery Trust Act (Repeal) Bill, 2024, Parliament voted to dissolve the Trust Tribunal, transferring any remaining cases to the Office of the Attorney General to cut administrative costs, aligning with the government's rationalisation policy.