Government-owned enterprises post sh151b profit

Government-owned corporations posted a profit of sh151b, promising better service provision to Ugandans in the face of lean economic times.

An analysis done by the Auditor General’s office on profitability of 18 public corporations and state enterprises, discovered that up to ten entities made profits or registered surpluses in the year under review.

Top on the list of public profit-making entities was Uganda Electricity Transmission Company Limited (UETCL), which posted a profit of sh37.7b. This was followed by Uganda Electricity Generation Company (UEGCL) with a profit of sh27.9 and NEC Luwero Industries Limited, which posted a profit of sh7.9b.

“It was also discovered that Mandela National Stadium registered a surplus of sh78.8b from sh1b posted in the previous year on account of government support of sh80b received during the year,” reads the report of the Auditor General to Parliament for the financial year ended June 2022.

The report further says that in comparison with the previous year, a number of state enterprises and corporations including Uganda National Oil Company (UNOC), Uganda Electricity Distribution Corporation Ltd (UEDCL), Uganda Civil Aviation Authority (UCAA) and Uganda Broadcasting Corporation (UBC) recorded significant reductions in losses from the previous year. 

“Additionally, entities including NEC Luwero Industries Limited and NEC Farm Katonga Limited registered improved profit positions of over 100% from the previous year. This was mainly attributed to the recovery of the related industries from the negative effects of COVID-19,” further reads the report. 

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 Government.

Losses posted

On the other hand, some public entities got a hit from the COVID-19 lockdowns and recorded huge losses. Following the pack was Uganda National Airlines Company Limited, which posted a higher loss of sh266b from sh164.6b recorded in the previous year.

“This was on account of low industry recovery from COVID-19 effects, which slowed down the Airline’s expansion efforts into new markets like China,” says John Muwanga, the Auditor General.

He added that Uganda Electricity Transmission Company Limited (UETCL), Uganda Electricity Generation Company Limited (UEGCL) and Uganda Printing and Publishing Corporation (UPPC) registered reduced profit positions by over 60% from the previous year.

“This was attributed to foreign exchange losses (UETCL), delayed commissioning of Karuma HPP (UEGCL) and stiff competition in the market (UPPC),” further says the report.

Other loss-making enterprises included Uganda Railways Corporation, which amassed a loss of sh32.3b, Uganda Air Cargo Corporation, with a loss of sh9b and Kilembe Mines, with a loss of sh2.4b. 

By the late 1980s, Uganda's large public enterprise sector had become a major drain on the Treasury and a bottleneck to the country’s economic growth. 

To address this situation, in 1993, Government embarked on a major privatization and public enterprise reform programme, and by 2005 the initiative was largely complete and most public enterprises had either been privatized, reformed, or closed down.