By Edwin Muzahura
Wonders never cease in the Pearl of Africa!
Reading through the papers and tens of companies and investors need Government bail out to keep in business or afloat because they failed to pay their loans or financial obligations.
Reason being advanced is the unconducive business environment, war in Sudan, cost of capital bla bla.
But also intriguing is that some of these fellas have received Government concessions before but are in trouble again.
Whereas I appreciate the need to have Ugandan Companies thriving in business within the Country and the region, this must be done either through National Companies and if they are private companies, they should be able to be competitive with the best of business practices.
The companies listed may be able to have access to some powerful offices and owned by powerful chaps but it doesn’t mean that the small and medium scale companies are having it any better.
They are operating in the same environment with high power costs, limited market, high taxes, high cost of capital etc only that they may not have the same voice or representation.
Most of the owners of these companies are some of the richest Ugandans and either individually or their companies have invested in huge real estate projects that consume alot of this borrowed Capital which they can only recover over a long time and they then turn to Government for bail outs!!! Really?
Even if Government gave them free bail outs in trillions without the business environment changing or improving, they will be back soon with the same begging bowl.
The answer is in improving our micro and macro economics within the Country and the region and Government efforts should be focused on those areas not crediting private owned companies with public resources where UNRA is halting construction of some roads due to lack of enough budget support, health facilities in dire need and lecturers going without salaries.
These companies must meet their obligations, financial and otherwise like all other business men or companies.
Sembule steel mills was here and collapsed without Government support. National Companies like Uganda Airlines, Uganda Commercial Bank etc were wound up for not making business sense and were actually Government owned. So what’s is special about these companies.
If any body receives Government bail out by capital injection, they must sell shares of ownership to Government but not freebies and their management must be changed and supervised by professional firms like Ernest and young, PWC etc so that they don’t fall again because most of them are run by individuals without any structures and business models or governance.
So no free bail outs at all. Bail outs are a bad culture and encourage abuse of business.
It’s normal for companies to wind up as others emerge in a competitive environment.
Otherwise all Ugandans and Companies are operating in the same environment unless it’s a National bail out!