State Minister of Finance for Planning, David Bahati, has agreed to pay an annual interest of 24% on a debt he owes to the Parliamentarians Cooperatives Savings and Credit Society.
The Member of Parliament for Ndorwa West in Kabale district will continue paying in instalments until the Shs 121m is fully recovered.
The Parliamentarians SACCO dragged Bahati to court early in February with the hope of recovering the money borrowed in 2012.
Bahati, according to New Vision signed a consent agreement with the SACCO to clear the debt by December 2015.
The consent agreement was presented before Justice Henry Adonyo of the commercial court who later disposed of the case.
According to court documents, he agreed to pay Shs 30m as the first instalment by end of June this year and then pay the balance in six equal monthly instalments of Shs 15.2m from July to December.
The SACCO contended that on July 27, 2004 it entered into a loan agreement with the minister and advanced him Shs 80m.
Bahati further instructed the SACCO to repay Shs 13.6m and Shs 25m he borrowed from Great Cash Solutions and Kenroy Investments, respectively.
The general manager of the SACCO, Methods Mureebe who swore the affidavit said, Bahati also instructed the SACCOs chief accountant to only pay money for one month and defaulted the other months to date.
He also agreed to pay a sum of Shs 6m as costs to the SACCO and its lawyers.
MPs to receive Shs 100m each
Bahati’s progress on debt settlement comes amid reports saying the leadership of parliament has successfully negotiated to get Shs 100m for each member in the 2015/2016 budget.
The money in question, which will cost a tax payer Shs 34bn in all, has been branded a refund for fuel arising out fuel prices raining from Shs 2500 at the start of 9th Parliament to around Shs 3400 currently.
This intervention does not apply to all public officers who are entitled to transport allowance/mileage and have been equally affected by the rising prices.
This comes after the government told off teachers that their demands for the promised salary increment could not fit in 2015/2016 because of resource constraints and it now remains to be seen how they will take this if MPs have managed to get their demands funded under the same “constrained resource envelope”.
It should be recalled that NRM MPs have previously demanded for Shs 300m each in exchange for sole candidature and removal of the infamous age limit clause from constitution.
Government has already presented a Shs 24.1tn Budget for FY 2015/16, up from this year’s 2014/15 budget amounting to Shs 15tn.
However Shadow Minister of Finance, Geoffrey Ekanya, speaking to the media last week, stated that the budget “is going to cause a debt crisis” as government “struggles” to close the gap.
He added: “Inflation will increase to levels beyond those that prevailed in the immediate aftermath of the 2011 general election. We suspect the additional money will be used for electioneering.”
The Permanent Secretary Ministry of Finance, Mr Keith Muhakanizi, has since dismissed Ekanya’s claim.