Plans by the Ugandan government to bailout distressed companies to the tune of more than $400 million have sparked a backlash. The figure is roughly the same as the country’s health budget.
There has been lots of criticism from the public, including suggestions that it is a hand-out for those close to the government.
However, President Yoweri Museveni says it is important to support businesses which contribute to the economy.
Dokolo Woman MP Cecilia Ogwal has weighed in the debate on a proposal to bail out 65 distressed companies as symptomatic of government’s misplaced priorities.
Ogwal was last evening speaking at a public debate on the proposal to fork out 1.3 trillion Shillings of taxpayers’ money to select 65 reportedly struggling companies and individuals. The proposal, fronted by an economist, Dr Ashie Mukungu, has since drawn the public ire, forcing the government to backtrack on the matter.
Using the analogy of an alcoholic father, Ogwal said the proposed bail out is like a drunkard who prioritizes booze ahead of other needs, regardless of how much money he has.
Ogwal added that to understand why only 65 companies and individuals have been selected, one needs to dig and find out the invisible hands behind them. She said that it is absurd that the government is not even bothered about problems like food insecurity affecting some parts of the country.
Ogwal also cited teachers, doctors, young people and women as groups that are not being helped by the government.
Ogwal said the government segregates which companies or individuals to bail out or not, citing Uganda Commercial Bank and the Cooperative Bank that went belly up as the government looked on not bothered.
Ogwal said even her grain milling company was crashed by the government. Her company was at one time the biggest grain miller in Uganda. She cited businessman Bassajjabalaba who was bailed out with lots of taxpayers’ money and yet many others were left to collapse.
Patrick Tumwebaze, the Executive Director of Uganda Debt Network said the bailout proposal, points to challenges in the economy which is likely to affect foreign direct investments. He said there is a need to review the performance of the economy, review macroeconomic policies and deal with the high interest rates.
Dr Fred Muhumuza also said there is a need to restructure the way the distressed companies are run, as well as corporate governance of the private sector.