Report: Shs1m lost to corruption every hour

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Uganda loses at least 9.144 billion shillings annually to corruption conduits in private and public institutions, the Inspectorate of Government has found.

Broken down into its constituent parts, the figure translates to an hourly loss of just over Shs1m or Shs25m each day.

In an empirical study – the first of its kind – launched by the Inspectorate of Government in 2021 to establish the cost of corruption in Uganda, it was discovered that 23% of the government’s annual budget is lost to vice. The study, which was funded by the German government, used, among other things, a “red flag” methodology to analyze public procurement spending.

“Overall, estimates on the cost of corruption are considered to be lower than the reality in Uganda since some costs are in-kind, while others are not measurable due to lack of data,” the report said. , whose data was collected from February to December 2021. , states in part.

Speaker of Parliament Anita Among on Thursday voiced her fears over the colossal sums lost to corruption.

“It’s really absurd because when we allocate money and we give money to the government, the government [then] says there is no money but money is being siphoned off to the tune of 9.14 trillion shillings,” Ms Among said, adding: “As IGG (Inspector General of Government), you still have a lot of work to do.

Ombudsman Beti Kamya says there is a need to “rebrand the war” on corruption making it more people-centric, especially as the Inspectorate of Government is understaffed.

“We are limited by lack of funds and staff as we have around 400 employees. The level of corruption is really high and the 400 people are just a drop in the ocean,” Ms. Kamya said.

The report states that the costs of corruption that impact everyone as long as they are “not attributable to any specific group” amount to 339 billion shillings per year. He adds that “savings from eliminating corruption in Uganda have the potential to significantly improve the delivery of public services to citizens”.

The datasets in the report were collected, inferred, and categorized into two broad categories: direct and indirect costs. Direct costs meant “the cost to citizens who are required to pay a bribe to obtain a public service”, while indirect costs meant costs attributed to corruption but were difficult to estimate during the research .

The direct costs of corruption have been recorded via salaries paid despite absenteeism, which is estimated at Shs 2.3 trillion per year and loss of environmental resources leading to corruption cost of Shs 2.2 trillion every year .

Corruption in contractual royalties related to natural resources such as oil (858 billion shillings), bribes paid to judicial officials (762 billion shillings) and corruption in procurement processes (614 billion billion shillings) also stood out as a metaphorical sore thumb, as did corruption in the health care and education sectors.

“In total, the cost of corruption in health care amounts to almost 191 billion shillings per year and in the education sector, about 278 billion shillings per year,” the report reveals.

Other direct costs of corruption were recorded in security mainly during bribery of security personnel, with findings detailing that each Ugandan paid an average of Shs 56,779. This equates to a grand total of 91 billion shillings per year.

Regulatory implementation processes, as well as procurement and budgeting also contribute to the direct costs of corruption in the country, as do user fees for public services.

“The level of corruption in the water and electricity utilities, together with the corruption costs of unpaid utility charges to the government contribute to a total loss of nearly 478 billion shillings,” the report reveals.

The choice of indirect costs are the net losses of net foreign direct investment inflows totaling 18.5 billion shillings, a limited supply of labor which reduces the participation rate by 320.5 billion shillings. working population, paying out 763 billion shillings for the corruption of judicial officers, as well as high interest rates. that prevent small and medium-sized enterprises from submitting loan applications. Losses due to misdeclaration and under-declaration of value added tax by companies have been estimated at 136 billion shillings.

The findings of the empirical study are sure to bring both a sense of loss and shock. This is particularly the case when considered in the context of budgetary allocations to the various sectors and sub-sectors highlighted by the study.

For example, the 726 billion shillings that would have been distributed to judicial officials in the form of bribes in 2019 dwarfs the 393 billion shillings earmarked for the administration of justice in the budget for the financial year 2022/2023.

Similarly, the budget allocation for natural resources, environment and climate change was Shs 617 billion in the 2021/2022 budget. This is dwarfed by the 2.2 trillion shillings that were lost to corruption in 2019 alone.

While the current budget shows that 1,231 billion shillings have been committed for the implementation of a “development plan” in the country, up to 2,300 billion shillings are lost due to corruption in the form wages paid despite absenteeism.

The ombudsman believes that this inaugural study which looks at the granular details of corruption is more useful than internationally commissioned surveys such as Transparency International’s Corruption Index. Mr. Kamya is confident that the study shows that corruption in Uganda is deeply rooted. She, however, resists the temptation to label it endemic, instead emphasizing the need to change the mindset of Ugandans “so that people can adopt the capacity to reject corruption”.

“The challenge is mainly in corruption because the population has accepted corruption as a way of life,” she told The Sunday Monitor in an interview on Friday, adding: “People should know they have a right to good service. They should replace this way of accepting corruption with a sense of entitlement.

Ms. Kamya recommends that emphasis be placed on strict enforcement of laws, adding that this would close some major loopholes exploited as vectors of corruption. The ombudsman’s office currently emphasizes out-of-court settlement of cases, as such processes (plea negotiations, etc.) save government resources and time wasted in lengthy and drawn-out litigation.

Ms Kamya revealed that her office commissioned the report because the government “needed a scientific basis” on which to base programs aimed at tackling the vice of corruption in the country.

“We wanted to know which sector is the most corrupt and where the money mainly comes and goes from,” Ms. Kamya said, adding, “It has now given us a clear target and we are saying next year we want let this figure come”. down.”

The Government Transparency Institute (GTI) pointed to the empirical study that was conducted in 2021. A nonpartisan think tank, GTI was founded in 2015 “to provide an independent, research-driven voice to the causes of transparency, anti-corruption and good governance.

Mihály Fazekas, founder of GTI and holder of a doctorate from the University of Cambridge, was the principal investigator of this project, working in tandem with Isabelle Adam and Olena Nikulina.

The main objective of the study was to “generate empirical data on the cost of corruption in Uganda”. He achieved this using a number of methodological approaches. In addition to using a “red flag” methodology, the research also benefited from reviews of relevant literature, secondary survey data, as well as qualitative methods such as interviews.

Wages paid despite absenteeism – 2.3 trillion shillings

Loss of environmental resources – 2.2 trillion shillings

Corruption in contractual fees – 859 billion shillings

Corruption of judicial officers – 762 billion shillings

Corruption in public procurement – 614 billion shillings

What the fight against corruption can save

Security – 4.2 trillion shillings

Education – 3.4 trillion shillings

Agriculture—Shs. 760 billion

Water and environment—Shs. 654 billion

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