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Mbabazi, NSSF land deal: The unanswered questions

By the time we went to press, Security minister Amama Mbabazi, his business partner Amos Nzeyi—key witnesses in the parliamentary investigation into the NSSF land purchase in Temangalo had testified. The board and top managers of the fund testified earlier.

But a month into the search for answers to the now controversial deal, the probe has instead raised more questions as new information is unearthed. It is these lingering issues that will define the outcome of the probe.
 
Acreage

There has been no clear answer as to how much land NSSF bought from Mbabazi’s company, Arma Ltd. and Amos Nzeyi.
While the NSSF board chairman, in a statement to the committee, stated that the Fund bought 414 acres, the Fund’s Managing Director, Chandi Jamwa, told the same committee thus: “As per the GPS (surveying technology) the total acreage is 463.87. As per the titles, the total acreage is 490.47 acres. And this is the point I am trying to make that although legally we have acquired 490 acres; we only paid for 463 because that was the correct measurement”.

While Jamwa thought he had cleared the matter of the acreage, Amos Nzeyi last week introduced a new angle instead leading to more confusion. He stated: “The total acreage is about 543 acres out of which NSSF purchased 463 acres…but I have a Memorandum of Understanding with NSSF to the effect that they return to me 104 acres.”

The constant increase and at times decrease and confusion in surveying methods means NSSF went ahead to pay for a big chunk of land without ascertaining its exact size.
And if true that Nzeyi signed a MoU that requires the Fund to return to him 104 acres–– as the businessman claimed but without proof–– then it means NSSF paid an extra Shs 2 billion for ghost land. That may also imply that the Fund actually bought 359 and not 463 acres it claims.

Value

Before it purchased the land, NSSF hired three private firms to assess its value. They estimated an acre in the area to be between Shs 14 million and 18 million. But the Fund ignored their advice in preference for the “open market” price, settling for Shs 24 million per acre.

Mbabazi has since argued that if Akright was willing to pay Shs 28m for and former minister Jim Muhwezi’s land nearby, then Shs 24 million per acre in Temangalo is indeed a fair price.
Mbabazi’s arguments are quite compelling when you consider that land in Uganda today provides the best return on investment within a short time.
However, questions about squatters, swamps and the revelation that the land is not one consolidated block, still beg for satisfactory answers to prove that there was value for money in this deal.
 
Therefore, if NSSF actually bought more than 400 acres 20kms outside Kampala, it is a good acquisition in business sense. Even if NSSF didn’t develop the land, it would sell it twice as much within a short time considering the current dynamics of land in and around Kampala. But with all the encumbrances mentioned, is it value for money?

Procurement rules

Were procurement rules followed?
Edgar Agaba, the executive director of PPDA, the body that regulates procurement in public institutions, told the MPs that he first learnt of the Temangalo transaction from the press.
NSSF bosses said they saw no need to follow the PPDA Act because the Fund has a data bank of “unsolicited” land offers. NSSF further said that this particular transaction was not procurement but an investment. This means that it had nothing to do with PPDA. But PPDA’s Edgar Agaba thinks otherwise. Who is right?

The NSSF will find it difficult to extricate itself from charges of wrong-doing here, and as Agaba pointed out, if such a transaction involving billions of shillings was not subjected to public scrutiny, there is a possibility that many other things went awfully wrong.

Cover up

Was there an attempt to cover up Mbabazi’s involvement in the transaction?
This appears to have been the case, especially when the NSSF board recommended that Arma Ltd, through which Mbabazi owned land that he sold to NSSF transfers its power of attorney to Nzeyi.
A board member, Claudius Olweny had already cautioned that it was not right for the Fund to transact business with a minister. Olweny later said his position was quoted out of context. It has since emerged that it was not even Arma Ltd that was paid but Mbabazi. Yet the NSSF board and managers at first claimed not to know that Arma Ltd belonged to Mbabazi.

Influence peddling doesn’t have to be obtained on gunpoint. It is all about power relations. A new NSSF MD has to be vetted by security organisations before being appointed to the position. Mbabazi is not only Minister of Security but also one of President Museveni’s closest confidants. It’s natural that if he went to Jamwa peddling his land, the MD would think about the safety of his job, before making a decision.

Encumbrances

Is the land free of encumbrances?
According to the NSSF officials, one of the major reasons they purchased this piece(s) of land was that it was free of encumbrances. Jamwa said: “Before we bought the land it was surveyed by geomaps. There were no squatters, the drainage is good, it is 13 km from Kampala and it is near the Northern by-pass.”

His point was modified by Mbabazi who last week told the committee that, “There are only four bonafide occupants occupying four acres.
On his part, Nzeyi said that he gave part of the land to a neighbouring school and some to an epicenter. But this was after an understanding with NSSF that those institutions should retain their portions of land after the transactions.

A tour of the same land by the MPs revealed that the land in fact has squatters. Musungu, the Managing Director of Geomaps, the company that surveyed the land, said that at least 20 acres of land was swampy. Mbabazi maintains that these are fish ponds and challenges MPs to another tour to the land to ascertain this.

NSSF, Mbabazi and Nzeyi were dishonest in the sale agreement when they stated that the land was free from any encumbrances when it is clear there are many. There appears to have been a rush by the parties to finalize the deal. In fact, Mbabazi and Nzeyi say they needed money urgently to recapitalise their bank, the National Bank of Commerce.

Unsolicited?

Who made the first move? How did Amama Mbabazi know that NSSF wanted land and how did NSSF know Mbabazi had land? Mbabazi says Amos Nzeyi did all the selling on his behalf.
NSSF say they have a data base of unsolicited land offers from where they chose this particular piece of land. But MPs were surprised to learn that some board members were not aware of the existence of this data bank.
 
Nzeyi said he was telephoned by one Kizito, an investment officer at NSSF, expressing interest on behalf of NSSF to purchase the land. We might never know how the buyer and seller linked up as this has remained a secret.

Conclusion

The contradictions have been many and so are the unresolved questions. Yet all the committee can do is to just make recommendations to Parliament.
What is clear though is that the board and management of NSSF may bear the biggest blame for flouting procurement rules and putting billions of shillings of people’s savings into a venture fraught with question marks.
 
Mbabazi and Nzeyi maintained that they are innocent because they were willing sellers to a willing buyer. So if NSSF did not follow the right procedure when it purchased their land, it was not their fault. But as President Museveni told Mbabazi during a meeting of NRM’s Central Executive Committee last week, a leader should be above suspicion.

In the absence of answers to many questions, the matter has since been politicised with Mbabazi claiming some members of the ruling NRM party, in which he is Secretary General, want to pull him down using this saga. He mentioned Jim Muhwezi, a former Minister of Health, himself facing charges of abuse of office, as the leader of the group.
Mbabazi and his supporters claim that Muhwezi is working with MPs, Henry Banyenzaki, Sanjay Tanna and Theodore Ssekikuubo to discredit him. In turn, MPs Barnabas Tinkasimire, Sam Lyomoki and James Kakooza have come out strongly in Mbabazi’s defence.

But crying politics is no defence as long as the facts bear out the allegations.
Irrespective of what Muhwezi or Tinkasimire say, the main issue is what Mbabazi has said in respect to the NSSF transaction. What he has done so far is to blame NSSF while at the same time he has said it is Nzeyi who handled the transition on his behalf.

ekiggundu@observer.ug

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