Ministry of Trade PS Saves Taxpayer Billions by Renovating Historic Farmers House
The Media is awash with stories of government agencies failing to pay rent or being in huge arrears.
In this light, Geraldine Ssali, the Permanent Secretary of the Ministry of Trade, Industry, and Cooperatives (MTIC), made a decision that landed her in trouble with legislators. She chose to use the funds initially allocated for renting office space to renovate their offices instead.
However, some legislators disagree with this move, arguing that paying rent would be a better option than spending money on renovations. The MTIC has been located in the same building, the historic Farmers House, for over three decades.
The Ministry submitted a request for a supplementary budget to the Ministry of Finance, Planning, and Economic Development (MoFPED) in the first quarter of FY 2021/2022 for critical unfunded priorities, including improving staff working conditions by securing accommodation at a cost of UGX. 5 billion.
However, the funds were approved in August 2021, and the actual release of the funds was made by MoFPED at the end of the financial year in April 2022 as part of fourth-quarter cash limits.
The Ministry was left with two options: either to procure rental space for office accommodation or renovate the dilapidated Ministry Offices/Farmer’s House owned fully by the Government of Uganda under Uganda Property Holdings Ltd.
In view of the annual cost of UGX 5,083,864,788/= in rent every year, representing an increase of non-wage cost by 127.27%, Ms Ssali realized that it was more financially viable to renovate the existing work space at Farmer’s House.
The Ministry engaged Uganda Property Holdings Limited, Ministry of Works and Transport, Office of the President, and Ministry of Housing and Urban Development on the possibility of renovations, undertook feasibility studies and inspections, and received authority from the Ministry of Finance, Planning, and Economic Development dated 20th May 2022, to utilize the funds for renovations and overhaul of the Office space.
“Upon establishing through a structural integrity test that Farmers House is in good standing and could even accommodate an extra floor, and applying the test of reasonable skill empowered on me by Section 45 of the Public Finance Management Act 2015, it only becomes reasonable to renovate the premises as opposed to costing the Government of Uganda an extra UGX 4,942,264,788 /= per month (saving 97.21%),” Ms Ssali explains.
Furthermore, it was explained that the resources expended on renovation are to be recouped monthly by the Ministry while in better and cheaper premises, making it a cost-effective solution for the Ministry.
Renovating, improving, and adding value to Farmers House, which was built way back in 1964, will not only benefit the taxpayer but also create better service delivery for them, as Farmers House has been the home of the Cooperatives department for more than 30 years.
The Government of Uganda is currently undertaking rationalization of Government Agencies under the RAPEX program. In the next three years, MTIC shall be home to an additional 3 Government Agencies: Uganda Warehouse Receipting Systems Authority (UWRSA), Uganda Export Promotions Board (UEPB), and Uganda Free Zones Authority (UFZA).
This, according to the Ministry, would mean that in addition to the 5,000 square meters initially quoted as needed, MTIC would need an additional 1,615 to 2,500 square meters, which would translate to more than UGX 8 billion spent on rent annually. Renting would not have been a cost-effective method, and it would not achieve the government objective of saving monies on rent or rationalizing resources.
“By exercising a great degree of skill and diligence expected of an Accounting Officer under Section 45(2) of the Public Finance Management Act 2015, it is only wise to renovate Farmers House to not only save Government resources but also have premises in good standing that are cheap enough not to be costly to taxpayers. This will enable the government to achieve the objective of rationalizing Government Agencies in its true spirit,” the ministry head adds.
The decision to renovate instead of renting new office space aligns with the government’s goal of promoting cost-effective and sustainable use of public resources.
This also demonstrates the Ministry’s commitment to being a responsible steward of public funds, as well as its willingness to prioritize the well-being and safety of its staff.