Kampala – Uganda Development Corporation (UDC), a venture body established as a wholly owned government entity with the mandate to facilitate the industrial and economic development of Uganda is reportedly embroiled in
massive, practically unthinkable, corruption scandals, Red pepper exclusively reports.
According to security sources, UDC’s Executive Director Patrick Bitonder
Birungi, the former director Development Planning at the National Planning
Authority (NPA) is reportedly in trouble over various corruption scandals
at the Corporation with the latest manifesting at Soroti Fruit factory.
Established by the UDC Act Chapter 326 of 1952, Laws of Uganda, to makeong-term investments in strategic sectors of the economy in order to stimulate industrial and economic development and thus spur private sector growth, the corporation’s success has been frustrated by alleged diversion of funds, abuse of office among other irregularities by Top Officials.
A former economist lecturer at Makerere University, Dr. Birungi replaced Emmanuel Mutahunga who had been the acting executive director for about two
years up to April 2019.
UDC registered several successes in promoting local industrial development in the 1950s and 1960s and was augmented with the addition of newly nationalized industries in the early 1970s. The corporation collapsed between 1980s and 1990s as privatization took center stage before it was entirely phased out in 1998.
Several economic experts and stakeholders argue that UDC has seen sad days ever since Birungi took over after the latter allegedly failed to return its lost glory, facilitated by hiring of incompetent staff.
At the outset, the corporation under the leadership of Dr Birungi has been working with no substantive Board of Directors since late last year.
The three year term of the Board headed by Hamu Mugenyi expired in October 2020 however sources at the corporation accuse Birungi of frustrating the process to seek a new appointment of the Board.
It also alleged that since the expiry of Mugenyi’s tenure, officials at UDC have been doing transactions without the Board approval and without following the proper procedures.
‘’This has given Top Officials at UDC the influence to conduct all illicit acts which are unhindered. Investigations are being conducted in connections with initiatives that UDC is involved in on behalf of government including; The Teso Fruit Factory, Kalangala Infrastructure Services, Vehicle Assembly and Manufacturing (Kiira Ev Project), a Fruit Processing Factory In Luwero among Others have reportedly been crumbled ’’,
revealed a Source.
It is further said that lack of coordination between UDC and the Government agencies due to alleged poor leadership is costing the country billions of Shillings in revenue.
A source from UDC also intimated to Red pepper that there is unobstructed gross mismanagement of the Corporation resources where prejudice, nepotism, unfairness and abuse of office are reportedly eating up the institution.
‘’The matter will soon be at the table of State House Anti-Corruption Unit. There has been a lot of Discrimination and abuse of office, where those who act professionally are witch hunted by the Top management,’’ added our Source.
It is alleged that the matter reached President Museveni, following gross mismanagement of funds at Soroti Fruit factory.
Museveni reportedly ordered for the immediate investigations of Birungi into the unsubstantiated use of the agency funds.
The big man instructed his team to start investigations into claims that various projects have stalled under UDC and many have been clandestinely
‘’With the absence of the Board, all procurements are now only being done by Birungi’s office and he is happy about that. And as a result, Books of Account have not been audited for some time now as Birungi shelves all responsible documents to avoid raising a red flag’’, a source said.
It should be remembered that UDC received over Shs5.4billion for the operationalisation of the Soroti Fruit factory, but it was until late 2020 that the factory started operating.
In fact, the Parliamentary Committee on Agriculture, Animal Industry and Fisheries is planning to summon Dr Birungi and other UDC officials over mismanagement surrounding Soroti fruit factory.
After his appointment at the helm of UDC, Birungi was handed the first task to deliver Soroti Fruit Factory and make sure it is processing juice at its
UDC however failed to conduct its supervision and implementation role to ensure that the fruit factory which is a government-donor funded project kicks off on time. It took several interventions of Parliament to push Birungi’s UDC to start processing juice. Furthermore, the factory is operating below capacity due to shortage of fruits. Apparently, the factory is deliberately not buying fruits from the local farmers, leaving them with sacks of fruits rotting.
Whereas the factory was founded to support the fruit farmers in Teso, the same farmers are complaining that the factory does not buy their fruits because of officialdom.
‘’Officials buy fruits from other regions for kickbacks a matter that has left farmers here impoverished and regarding the government as unserious to
its promises’’, added a source.
Other sources indicate that for the Soroti Fruit factory, Birungi reportedly dissolved the Board and assumed all the powers after the factory requested for Shs16.7bn from Parliament to operationalise the factory.
Of late, the factory has been industrial sugars for mixing into the juice concentrates at an inflated price of Shs4, 900 per Kg yet the market price is Shs1, 900. This means that the factory officials under the management of Birungi take Shs3, 000 per Kg of sugar. It appears that management deliberately blocked business partners who wanted to buy the juice concentrates in order to improve output and investment.
Efforts to get Dr.Birungi were futile by press time, however, stakeholders have threatened to petition Parliament, State House Anti-corruption unit
and the office of the IGG to intervene in the matter.