The Government of Uganda (GoU) owns shares in a number of Public Corporations and State Enterprises.
These enterprises, which are independently managed, are supposed to operate efficiently, make profits and pay dividends to the Government. Their financial performance is therefore of interest to the Government.
Whereas some are making some serious money for the government in terms of dividends, others are sleeping on the job.
As usual, the Auditor General made a report for the year that ended June 2023 in which he assessed the profitability of twenty (28) entities out of the 77 Public Corporations and State Enterprises.
Only 14 made profits, the rest slept on the job in comparison with the previous year, 2022.
These include Uganda Electricity Distribution Company which made a loss of sh2bn; Uganda Printing and Publishing Corporation-sh3bn; New Vision Printing and Publishing Company Limited-sh5bn; Uganda Air Cargo Corporation-sh10bn; Uganda Railways Corporation-sh35.17bn; and Uganda National Airlines Company registered a loss of sh325bn. Other loss making entities include Uganda Development Corporation-sh24.8bn; NEC farm Katonga Ltd and NEC Uzima Ltd.
Similarly, the AG assessed the profitability of the 5 financial institutions owned by the government and noted that all the 5 institutions were profitable for the 2 consecutive years. However, the profitability of Bank of Uganda and Microfinance Support Centre Ltd tumbled by 54.03% and 67.5% respectively from the previous year.
Bank of Uganda’s profits dropped from sh502bn in 2022 to sh231bn in 2013. Microfinance Support Centre Ltd profits dropped from sh11.1bn in 2022 to sh3.61bn in 2023.
“I advised the entities to develop clear strategies to improve operations and adopt efficient financial management practices to lower operating costs and increase revenue generation. Government should also consider recapitalizing the most affected entities to revamp their operations,” Muwanga guided in his report.
Here are the bosses behind these loss making firms. Is it the time to crack the whip?
The official government printer Uganda Printing and Publishing Corporation made losses of sh3bn. UPPC operates on tax payers’ money yet it’s supposed to be generating dividends for the government. It is headed by Prof. Sudi Nangoli who was tapped from Makerere University Business School last year. He replaced Kenneth Oluka. Being new on the job, the jury is still out. He must work hard to turn things around in this financial year. UPPC is politically supervised by Minister Babalanda’s Presidency Ministry. UPPC prints all Bills, Statutes and Official Gazette. It also does commercial printing for ministries, government departments and the private sector which all these are revenue avenues. Nangoli must turn things around.
The New Vision Printing and Publishing Company Limited made losses of sh5bn. It is headed by Don Wanyama. He replaced Robert Kabushenga in 2021. Sources say the printing arm is the one making some money. But revenue from Newspapers (New Vision and Bukedde) keeps tumbling and management recently merged Saturday and Sunday Papers into one weekend edition. The same goes for radios and TV stations. Don is aware that his bosses will not tolerate this financial position of the group and soon an axe may come swinging if he doesn’t turn things around.
The Uganda National Airlines Company registered a loss of sh325bn. It is headed by Jenifer Bamuturaki as CEO. She joined in 2022 but controversy surrounds how she got the job and whether she was the right person. There are several petitions before various investigative government agencies challenging her competency while accusing her of excesses and mismanagement. The recent one was parliament’s COSASE Committee report which after a probe recommended that errant managers of the Uganda Airlines ought to be punished over mismanagement of the national carrier but it has never seen the light of the day. She recently said the airline still needs three more years to start making some money for the government. She told auditors that the losses were a result of increase in direct cost by sh140.803bn with major cost drivers being aviation fuel, crew allowances, crew salaries, pilot training and depreciation. Being new on the job, the jury is still out.
UDC is a Uganda government-owned company, established in 1952, that is mandated to promote investment in the country and to manage government-owned investments in private businesses and industries. A lot of money is channeled to UDC to stimulate economic growth through private players. In 2023 it made losses of sh24.8bn. It is currently headed by Dr. Patrick Bitonder Birungi whose ability to head such a strategic body as far as Uganda’s economic agenda is concerned has always been in doubt. It is politically supervised by Minister Mwebesa’s ministry of trade, industry and cooperative. It currently oversees government interest in Soroti Fruit Processing Factory, Atiak Sugar Factory, Kalangala Infrastructure Services Limited, Kigezi Highland Tea Company, Kiira Motors Corporation, Uganda National Airlines Company, Igongo Cultural Centre, Kampala Serena Hotel infrastructure among others.
In 2021 Birungi was dragged to two Anti-Corruption bodies over alleged abuse of office.
Through his lawyers of M/s Kiiza & Co. Advocates, the petitioner told State House Anticorruption Unit and the IGG, that there was mismanagement of Government Funds by the Top Officials at the Corporation.
The petitioner cited the Shs 1.2 Billion spent on constructing tarmac roads within the Soroti fruit factory which were not accounted for, citing alleged unobstructed gross mismanagement of the Corporation resources where prejudice, nepotism, unfairness and abuse of office are reportedly eating up the institution.
Other claims included inflating the prices of fruits supplied at the Soroti Juice Factory and poor performances at other UDC manned Institutions like Kiira Motors Corporation, Soroti Fruit Processing Factory and Uganda National Airlines Company.
Bank of Uganda’s profits dropped from sh502bn in 2022 to sh231bn in 2023. The bank operates without a governor. It is deputy governor Michael Atingi-Ego who calls shots there. Could the absence of the governor be having a bearing on the bank’s profits tumble? Sources say Atingi-Ego is among those eyeing the full governor job. However, such losses continue to cast a doubt on his abilities.
Recently Ego has been at war with his junior and senior staffers over a proposed restructuring exercise. While the bank has succeeded in achieving its core function of macroeconomic stability, its corporate governance remains in the spotlight, analysts opine.
Atingi-Ego, through audit and consulting firm KPMG, initiated an organisational structure review between June and February 2022. KPMG’s report recommended phasing out jobs deemed redundant. This was challenged by senior staffers led by executive director for supervision Tumubweine Twinemanzi. The staff aggrieved by the restructuring petitioned the President, claiming that it targeted those loyal to late Governor Emmanuel-Tumusiime Mutebile while rewarding those loyal to Deputy Governor Dr Michael Atingi-Ego.
Bank of Uganda has since halted the implementation of the staff restructuring programme. In a statement issued on 07 August, 2023, BoU said implementing the new structure, which was slated to start on August 1, 2023, had been paused to allow the Board of Directors to review and address some key issues raised by the staff.
Microfinance Support Centre Ltd (MSC) profits dropped from sh11.1bn in 2022 to sh3.61bn in 2023. MSC is premised on two mandates: To extend affordable micro-credit funds to qualifying Ugandans with a focus on agriculture and the active poor; and to offer business development services to build capacity in enterprise and financial management. A lot of money is channeled there. It is currently headed by John Peter Mujuni as the Executive Director. He has been there for some time but somehow keeps getting off the hook and bounces back. MSC has over time been buoyed by allegations of corruption, office abuse and unfair recruitment policies. For instance in 2020 the Anti-Corruption Court has remanded three top officials of the Microfinance Support Centre to Kitalya government prison for alleged embezzlement of 10 billion Shillings meant for teachers. Mujuni was one of them but later exonerated. Last year over 12 staff were suspended following a shs50bn dubious loans saga. MPs have also since accused MSC of irregularities in the disbursement of emyooga funds.
The Uganda Electricity Distribution Company Limited is a parastatal company whose primary purpose is to distribute electric power to domestic and commercial end-users in Uganda, at and below 33 kiloVolts. This role was sub-leased to Umeme for a 20-year concession that ends in 2025. It made a loss of sh2bn in 2023. It is headed by Mwesigwa Paul. Is it time to show him exit? He says the loss was a result of unclaimed depreciation charge disallowed by ERA in order to keep the power tariff low.
Uganda Railways Corporation made a loss of sh35.17bn. The loss was attributed to sharp increase in the administrative expenses which included contract staff salaries, legal expenses, consultancy and engineering design studies which increased from shs19.286bn in 2022 to sh31.208bn in 2023. CPA David Musoke BulegCPA David Musoke Bulega is currently Ag. Managing Director. URC has been buoyed by allegations of corruption and illegal recruitment. At the height of several scandals there in 2022, its board and MD Stanley Ssendegeya were relieved of duties. Last November, Ssendegeya was charged and remanded to Luzira prison on charges of forgery, uttering false documents and giving false information. He is currently out on bail.
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