State firms costing Ugandans heavily
Saturday January 04 2020
Uganda Railways Corporation is among the worst performing. FILE PHOTO | NMG
More than half of Uganda’s public enterprises are costing taxpayers heavily in losses and would be better managed under public-private partnerships, says a new report by the Auditor-General.
According to the report, only 14 out of the 29 state enterprises analysed made profits in 2018, with Bank of Uganda, National Social Security Fund and National Water and Sewerage Corporation posting profits of $114,531,000, $64,829,100 and $13,776,200 respectively.
The worst performing were Uganda Railways Corporation, Uganda Electricity Transmission Company Ltd and Civil Aviation Authority with losses of $25,121,300, $20,259,100 and $5,672,550 respectively.
“There is a need for government to improve on supervision and monitoring of these entities by introducing performance-based contracts with clear targets. In addition, the government could also explore public-private partnerships,” read the report.
In addition to making losses, a number of companies are unable to meet their long-term debt.
“Four state enterprises had debt ratios of more than 50 per cent, implying that their total assets were insufficient to cover their total debt. These were Uganda Electricity Distribution Company Ltd, Uganda Electricity Generation Company Ltd, Uganda Electricity Transmission Company Ltd and National Water and Sewerage Corporation,” said AG John Muwanga.
All the state enterprises are independently managed, but are expected to operate efficiently, make profits and pay dividends to the government.
“Out of the 17 profit making enterprises, only New Vision Printing and Publishing Company proposed a dividend payout amounting to $540,243,” said Mr Muwanga.