Parliament queries UDC’s capitalization of private companies
Members of the Budget Committee have asked the Committee of Tourism, Trade and Industry to examine the viability of investing Shs269 billion in several private enterprises through the Uganda Development Corporation (UDC).
The trade committee chairperson, Hon Mwine Mpaka, on Thursday, 20 January 2022 presented his committee report on the National Budget Framework Paper for the Financial Year 2022/23 – Financial Year 2026/27 before the Budget Committee.
According to Mpaka, under the manufacturing programme, the sector faces a shortfall of Shs548 billion in unfunded priorities of which Shs269.4 billion is required for the capitalisation of enterprises under UDC.
Some of the projects include; Shs 60 billion for road construction by capitalising two road construction firms, Shs10 billion for a cocoa processing plant in Bundibugyo district, Shs10 billion to the Masaka Fruit Factory, Shs21.9 billion for the expansion of the Soroti Fruit Factory and procurement of an orange line, Shs5.5 billion for coffee processing in the capital, Kampala, and Shs5.5 billion to the Soluble Coffee firm in Wakiso district to procure land and factory construction.
Others are Shs2 billion for Mabale Growers Tea Factory Ltd as working capital, Shs10 billion to Kyarushozi Tea for master planning and procurement of machinery, Shs1 billion for coffee grading and roasting in Masaka district, Shs30 billion for grains value addition, and Shs 50 billion to Moroto-Ateker Cement Factory for civil works among others.
Mpaka revealed that the Government had shares in some of the benefiting enterprises.
However, members of the Budget Committee tasked Mpaka and the trade committee to investigate and ascertain the ownership of the companies, the shares that Government has if any and the viability of those investments among others.
“Would you take interest in getting to know the particular owners of each of these companies in terms of the shareholders and directors, the share capital as stated in the memorandum of association for you to know if it is viable,” Hon Wilfred Niwagaba (INDP, Ndorwa County) asked?
Ignatius Wamakuyu Mudimi (NRM, Elgon County) who chaired the committee also tasked the committee to look at the viability of investing in these enterprises but also the owner.
Sheema Municipality MP, Dickson Kateshumbwa, tasked the committee chairperson to explain the Shs 4 billion capitalisation for a steel processing factory in western Uganda, and yet there are reports that there is no capacity for this. He also sought to know who owned the factory and how they got selected.
The District Woman MP Amolatar, Agnes Atim Apea questioned what informed the investments and inquired whether they are aligned to the National Development Plan.
“UDC should be interrogated more to ascertain the choice of these investments, who decides where UDC invests, some parts of the country are not represented,” Apea said.
Patrick Nsamba (NUP, Kassanda North) said UDC is now becoming a conduit for mismanagement, he asked if the challenge of the governance of UDC has been resolved before the money can be sent.
Mpaka informed the committee that they have already been examining the shares of government in all these agencies. However, he said the process takes time, adding that with a new board at UDC, operations are going to improve.
He committed to share proposals on how to support only viable enterprises when they next interface with the Budget Committee.