Tackling questions on privatised companies
Mar 18, 2016
This week, the anti corruption coalition Executive Director Ms Cissy Kagaba penned a rejoinder. She is of course an activist but I did not know her to miss the bus on topical issues.
By Jim Mugunga
Once again, as has been the case around this period in the politics of our country, we woke up to media reports last week to the effect that Parliament is expected to open a probe into "allegations of corruption and collusion in the sale of more than 130 public assets under the controversy-ridden privatisation policy."
This week, the anti corruption coalition Executive Director Ms Cissy Kagaba penned a rejoinder. She is of course an activist but I did not know her to miss the bus on topical issues. This time around she was out rightly wrong; her letter/ article had falsehoods and in bigger parts selectively cited parts of the law in an attempt to make the "point." Her researchers must have let her down!
Whereas there is nothing wrong with "yet another probe" of the privatisation process if deemed necessary; it is tiring as it is frustrating to note that despite being one of the most documented and debated public sectors; there are persistent and deliberate distortions in relation to its governing laws, guidelines and outcomes.
The matter is not helped by some political actors and some in civil society organisations who either disregard bare facts in order to fulfil personal agenda or merely choose to pick on this otherwise historical venture and its related historical imaginary issues in order to settle political scores.
The so called questions on privatisation are therefore a mere smoke screen. At this point in our political journey they pop up. It is the political actors who pull this one out of the cupboard in order to rattle or silence opponents. Others merely deploy it to seek attention and or personal gain. My view, it's a very tired one. Its sale by date is way past.
However, aware that there is a whole generation that is being deliberately misled by the sweeping statements about the "rotten, non transparent, non accountable and un-investigated" privatisation process; there is once again need to explain it all in general.
There has been multiple investigation of the privatisation process in recent times. The IGG and CID among them. These found no basis into what shaped the allegations and inquiries thereof. Many years ago however, there was a well publicised and focused probe by a select committee of Parliament.
The committee led by Hon Omongole dug deep into processes; sales, use of funds, individuals and companies involved in divestitures among others. It made findings; recommendations including operational and structural changes at the Privatisation Unit (PU).
The PU procedures and processes as well as the actual divestiture law were overhauled. Of course, the report held accountable those it faulted. It is part of the parliamentary record—the Hansard and is hence public and may therefore be accessed.
Other reports authored at the peak of the privatisation process include those by researchers, organisations and academicians. The Uganda Manufacturers Association commissioned an Impact Assessment of The Uganda Privatisation Program a specific study whose findings are on record; Hon William Okecho and the Adam Smith/Ernst &Young authored extensive reports on the process.
In addition, there are critical and highly informative reports by committees of Parliament to which the Ministry of Finance and the PU account. The committees include the Public Accounts; Finance, Economy and Statutory Authorities and State Enterprises (COSASE) among others.
The annual reports that emerge as the Auditor Generals' Office undertakes their mandate is one such useful addition to a haul of literature available to interested parties to study.
This particular report; its comments and observations are part of the annual oversight role this specialised statutory government entity undertakes primarily on behalf of Parliament. It is wrong therefore for any commentators particularly among some civil society organisations to opt to use casual-desktop approaches to write; attempt to inform or pass judgement on the implementation of a process which is evidently so documented without recourse to available literature.
It wouldn't be far fetched therefore for one to believe that the intention for such haphazard write ups is to post mileage that enhances their business sustainability of course at the expense of misinforming non suspecting Ugandans.
The above aside however, it is important to revisit the story of Privatisation now that the so called inquiries demand that we prove we have nothing to hide. The starting point is the reasons why government decided to undertake the privatisation process; why was it implemented in the manner it was and what is the status so far.
Background
In 1985, Government inherited a sick and almost collapsed economy that necessitated multiple approaches to resuscitate. The options that were considered included the promotion of the private sector to play an increased role in trade and investment which had hitherto become the monopoly of the state. Deliberate policies were put in place to trigger off the private sector led growth.
These included; liberalisation, privatisation and removal of restrictions on foreign exchange trade. The lump some of the above efforts, among others, resulted in the development of the very successful Economic Recovery Program (ERP) which took effect in 1987.
In developing the ERP, government recognised the need to undertake a comprehensive reform of the Public Enterprises (PEs) in Uganda with a view of reducing their financial and administrative burden. The PE sector then constituted of 156 enterprises of which 133 were commercially oriented.
A total of 20 PEs were dormant but remained on government books while several others were completely non functional due to low capacity utilisation; lack of equipment; destruction or disrepair, un resolved ownership, operating losses, low productivity and outright lack of investment and operating capital.
Indeed by 1986, the Public Enterprises Sector was heavily dependent on State subsidies from the then overwhelmed treasury to remain semi-operational. Estimated subsidies in 1994 were Ushs.150 billion p.a. (8% of GDP) and yet its contribution to GDP at the time was only 5%. The sector also accounted for one third of the national external debt and servicing that debt was being met by the state.
Implementation of the Privatisation Process
In order to improve efficiency, reduce state subsidies, reposition the PEs as a key player in the economy and encourage private sector investment; in November 1992, Government published the Public Enterprises Reform and Divestiture Policy (Gazette No. 48) and the following year enacted the Public Enterprise Reform and Divestiture (PERD) Act. The purpose was to provide for the legal and institutional framework for implementing the Policy. A total of 113 Public Enterprises grouped in four (4) classes were specified in the Act for purposes of reform and divestiture as follows:
- Class 1 [fully owned by government] 16 PEs
- Class 11 [majority shareholding by government] 24 PEs
- Class 111 [minority shareholding by government] 10 PEs
- Class IV [fully privately owned] 46 PEs
- Class V [ liquidate] 17 PEs
It is clear from the above that government had a clear approach to the privatisation process. Subject to reviews during implementation and technical evaluations; the intention was to partly privatise PEs in classes 11 and 111 while fully privatising those in class IV. The task was delegated to a Sub-Committee of Cabinet, the Divestiture Reform and Implementation Committee (DRIC) with the Privatisation Unit functioning as its secretariat.
The reform and divestiture activities eventually necessitated the unbundling of the power and telecommunications sectors. This led to reclassification and corporatization of some government projects. The portifolio for divestiture hence increased.
To implement the privatization process, various methods were used and these included the following:
- Auction
- Concession
- Debt Equity Swap
- Initial Public Offering
- Joint Venture
- Liquidations
- Management Buy Out
- Pre-emptive rights
- Repossession
- Sale of Assets
- Share sale
The general principle that informed the above methods was to allow various avenues through which broadening ownership by Ugandans would be achieved. Among the guidance that underpinned the above, is the principle to the effect that no specific class of potential purchasers will be excluded from participating from the divestiture process. The methods were to be conducted in an open and transparent manner. By deploying the above methods, it is on record that almost half of all divestitures (52 out of 135) completed so far were purchased and are owned up Ugandans. The bulk of the other half of the privatized companies were disposed of through joint ventures; shares sales or Initial Public Offerings. It is clear from the publicly available records that Ugandans in partnerships with foreigners took advantage of the above methods and extensively floated joint venture companies or took up shares in order to own the former PEs.
Probably the most obvious evidence of Ugandan citizen's participation in the privatization process is through the Initial Public Offers (IPO) done via the stock exchange. Currently figures show that Ugandans are happier participants in the stock exchange founded and facilitated by the PU. The current capitalization of the stock exchange including cross listed companies is approx Ugshs24.7trillion. Domestic counters which account for almost 100% IPO and products related to the privatization process account for over Ushs 4.86trillion. This is in other wards the level of participation enjoyed by Ugandans and others who subscribe to the gains posted by our own securities exchange since it was established.
DIVESTITURE TRANSACTIONS AS AT JUNE 30, 2014 BY METHOD OF SALE
|
Enterprise |
Buyer |
Date |
Participant |
Method |
Price |
|
UGX M) |
(USD Equiv. M) |
||||||
1 |
Acholi Inn |
Ms Laoo Ltd |
May-95 |
Ugandan |
Sale of Assets |
235 |
|
2 |
African Ceramics Co. |
Muhindo Enterprises Ltd |
May-96 |
Ugandan |
Sale of Assets |
270 |
|
3 |
Hilltop Hotel |
Three Links Ltd |
May-95 |
Ugandan |
Sale of Assets |
35 |
|
4 |
Hotel Margherita |
Reco Industries Ltd |
Aug-94 |
Ugandan |
Sale of Assets |
365 |
0.4 |
5 |
ITV Sales |
ROKO Construction |
Dec-96 |
Foreign |
Sale of Assets |
320 |
|
6 |
Lira Hotel |
Showa Trade Company Ltd |
Jan-95 |
Ugandan |
Sale of Assets |
250 |
|
7 |
Masindi Hotel |
Ottoman Engineering |
Feb-00 |
Ugandan |
Sale of Assets |
198 |
|
8 |
Mt. Elgon Hotel |
Bugisu Cooperative Union |
May-95 |
Ugandan |
Sale of Assets |
650 |
|
9 |
Mt. Moroto Hotel |
Kodet International |
Nov-94 |
Ugandan |
Sale of Assets |
40 |
|
10 |
NYTIL |
Picfare Ltd |
Mar-96 |
Foreign |
Sale of Assets |
2,132 |
|
11 |
Rock Hotel |
Swisa Ind. Ltd |
Nov-94 |
Ugandan |
Sale of Assets |
300 |
|
12 |
Uganda Cement Ind. - Hima |
Rawals Group of Industries |
Dec-94 |
Foreign |
Sale of Assets |
20,500 |
|
13 |
Uganda Cement Ind. - Tororo |
Corrugated Sheets Ltd |
Oct-95 |
Foreign |
Sale of Assets |
5,900 |
|
14 |
Soroti Hotel |
Speed bird Aviation Services |
Jan-95 |
Ugandan |
Sale of Assets |
150 |
|
15 |
Ug. Consolidated Properties |
GoU |
Apr-99 |
Ugandan |
Sale of Assets |
16,174 |
9.0 |
16 |
Uganda Garment Industries |
Phoenix Logistics Uganda Ltd. |
Aug-00 |
Ugandan |
Sale of Assets |
850 |
0.5 |
17 |
Ug. Leather & Tan'ng Ind. |
IPS (U) Ltd |
Jul-95 |
Ugandan |
Sale of Assets |
1,646 |
|
18 |
Uganda Meat Packers (K'la ) |
Uganda Meat Industries Ltd |
Aug-95 |
Ugandan |
Sale of Assets |
674 |
|
19 |
Uganda Meat Packers-Soroti |
Teso Agric Industrial Co Ltd. |
Nov-97 |
Ugandan |
Sale of Assets |
300 |
|
20 |
Uganda Spinning Mills, Lira |
Guostar Enterprises (U) Ltd. |
1999 |
Foreign |
Sale of Assets |
n/a |
|
21 |
White Horse Inn |
Kabale Develop'nt Company |
Aug-94 |
Ugandan |
Sale of Assets |
600 |
|
22 |
White Rhino Hotel |
Dolma Associates Ltd |
May-95 |
Ugandan |
Sale of Assets |
200 |
|
|
|
|
|
|
|
|
|
1 |
African Textile Mills |
P.S. Patel |
Mar-96 |
Ugandan |
Share Sale |
1,400 |
|
2 |
Agip (U) Ltd |
Agip Petrol International |
May-96 |
Foreign |
Share Sale |
1,675 |
|
3 |
Apollo Hotel Corporation Ltd. |
MIDROC Ethiopia plc |
Mar-01 |
Foreign |
Share Sale |
32,040 |
18.0 |
4 |
Blenders (U) Ltd |
Uniliver Overseas Holding BV |
Aug-94 |
Foreign |
Share Sale |
494 |
|
5 |
Comrade Cycles (U) Ltd. |
Uganda Motors Ltd. |
Jan-97 |
Ugandan |
Share Sale |
0.00 |
0.00 |
6 |
East African Distilleries |
Intern. Distillers & Vintners |
Nov-92 |
Foreign |
Share Sale |
731 |
0.6 |
7 |
Kibimba Rice Co. Ltd. |
Tilda Holdings |
Sep-96 |
Foreign |
Share Sale |
1,524 |
|
8 |
Kinyara Sugar Works Ltd |
Rai Holdings |
Oct-06 |
Foreign |
Share Sale |
61,547 |
33.5 |
9 |
Lake Victoria Bottling Co. Ltd |
Crown Bottlers (U) Ltd |
Feb-93 |
Ugandan |
Share Sale |
6,460 |
|
10 |
Lake Victoria Hotel (PHASE 1) |
Windsor Ltd |
Aug-95 |
Foreign |
Share Sale |
2,794 |
|
11 |
Lango Dev. Co. |
Sunset International Ltd. |
May-98 |
Ugandan |
Share Sale |
100 |
|
12 |
Motorcraft and Sales Ltd. |
Andami Works Ltd. |
Sep-96 |
Ugandan |
Share Sale |
200 |
|
13 |
N I C Ltd (60%) |
Insurance Group of Nigeria |
Jun-05 |
Foreign |
Share Sale |
6,308 |
3.6 |
14 |
PAPCO Industries Ltd. |
Praful C. Patel |
Feb-99 |
Ugandan |
Share Sale |
100 |
|
15 |
SAIMMCO |
Steel Rolling Mills Ltd. |
Sep-99 |
Ugandan |
Share Sale |
202 |
|
16 |
Stanbic Bank (U) Ltd. |
SBIC Africa Holdings Ltd. |
Dec-96 |
Foreign |
Share Sale |
6,939 |
|
17 |
Total (U) Ltd |
Total Outre Mer |
Mar-96 |
Foreign |
Share Sale |
5,646 |
|
18 |
Transocean 1998 (U) Ltd |
Coin Ltd. |
Jul-01 |
Ugandan |
Share Sale |
361 |
|
19 |
TUMPECO |
GM Company Ltd |
Aug-94 |
Ugandan |
Share Sale |
1,129 |
|
20 |
Uganda Commercial Bank |
Stanbic Bank |
Feb-02 |
Foreign |
Share Sale |
21,900 |
|
21 |
Uganda Fisheries Enterprises |
Nordic-African Fisheries Co. |
May-95 |
Foreign |
Share Sale |
1,100 |
1.1 |
22 |
U G M Co.(Phase 1) |
Greenland Investments Ltd |
Dec-96 |
Ugandan |
Share Sale |
5,336 |
|
23 |
Uganda Industrial Machinery |
F.B. Lukoma |
May-97 |
Ugandan |
Share Sale |
7 |
|
24 |
Uganda Pharmaceuticals Ltd. |
Vivi Holdings |
Jul-96 |
Foreign |
Share Sale |
1,528 |
|
25 |
Uganda Telecom |
Detecom |
Jun-00 |
Foreign |
Share Sale |
50,975 |
33.5 |
|
|
|
|
|
|
|
|
1 |
Agricultural Enterprises Ltd |
C D C |
Oct-93 |
Foreign |
Joint Venture |
12,700 |
|
2 |
NEC Pharmaceuticals Ltd. |
Haupt Groupe |
Dec-99 |
Foreign |
Joint Venture |
|
1.5 |
|
|
|
|
|
|
|
|
1 |
Associated Match company |
Madhvani Group |
Jun-01 |
Foreign |
Pre-emptive right |
0 |
|
2 |
Bank of Baroda |
Bank of Baroda (India) |
Jun-99 |
Foreign |
Pre-emptive right |
2,500 |
|
3 |
Barclays Bank of Uganda Ltd |
Barclays Plc |
Oct-98 |
Foreign |
Pre-emptive right |
5,000 |
|
4 |
BAT Uganda (PHASE 1) |
BAT Investments Ltd. |
Sep-99 |
Foreign |
Pre-emptive right |
|
7.0 |
5 |
ENHAS |
Efforte Corp, G/Airlinks & SN |
Apr-98 |
Ugandan |
Pre-emptive right |
4,300 |
3.8 |
6 |
Kakira Sugar Works |
East African Holdings Ltd. |
Jul-00 |
Foreign |
Pre-emptive right |
3,500 |
|
7 |
Lake Victoria Hotel Ltd (Ph. 2) |
The Windsor Ltd. |
Aug-00 |
Foreign |
Pre-emptive right |
2,962 |
1.8 |
8 |
Rwenzori Highland Tea Co. |
Finlays Groups |
May-02 |
Foreign |
Pre-emptive right |
1,450 |
|
9 |
Steel Corporation of E A Ltd |
Muljibhai Madhvani & Co. Ltd |
Jul-00 |
Foreign |
Pre-emptive right |
363 |
|
10 |
Uganda Libyan Arab Holding |
Preemptive |
Apr-08 |
Ugandan |
Pre-emptive right |
1,685 |
|
11 |
Sugar Corpn. of Uganda Ltd. |
Mehta Group |
Dec -09 |
Foreign |
Pre-emptive right |
1,720 |
|
12 |
Cable Corporation |
Mehta Group |
Dec - 09 |
Foreign |
Pre-emptive right |
1,720 |
|
13 |
UGMA Eng. Corporation |
Mehta Group |
Dec -09 |
Foreign |
Pre-emptive right |
1,440 |
|
|
|
|
|
|
|
|
|
1 |
BAT Uganda (PHASE 2) |
Public |
Jun-00 |
Ugandan |
I P O |
4,609 |
|
2 |
DFCU Bank |
Public |
Jul-04 |
Ugandan |
I P O |
10,100 |
|
3 |
New Vision P & P Co (20%) |
Public |
Sep-04 |
Ugandan |
I P O |
9,200 |
|
4 |
Uganda Clays Ltd. |
Public |
Oct-99 |
Ugandan |
I P O |
1,460 |
|
5 |
National Insurance Company |
Public |
Mar-10 |
Ugandan |
I P O |
7,270 |
|
|
|
|
|
|
|
|
|
1 |
Dairy Corporation Ltd |
Sameer Agric. & Livestock |
Aug-06 |
Foreign |
Concession |
|
0.5 |
2 |
Mweya Safari Lodge |
Madhvani Group |
Aug-95 |
Ugandan |
Concession |
1,821 |
|
3 |
Nile Hotel International Ltd |
Serena Tourism Promotion Svs |
Jan-04 |
Foreign |
Concession |
2,340 |
1.2 |
4 |
Second National Operator |
MTN |
Mar-98 |
Foreign |
Concession |
6,664 |
5.0 |
5 |
Ug. Electricity Distribution Co |
Umeme |
May-05 |
Foreign |
Concession |
10,765 |
1.4 |
6 |
Uganda Electricity Generation |
Eskom Enterprises |
Nov-02 |
Foreign |
Concession |
993 |
0.5 |
7 |
Uganda Railways Corporation |
Sheltam Railway Company |
Oct-05 |
Foreign |
Concession |
3,479 |
2.0 |
8 |
Uganda Seeds (Kasese) |
Lease/concession |
Sep-05 |
Ugandan |
Concession |
326 |
2.0 |
9 |
Ug. Seeds Masindi & Kisindi |
Lease/concession |
Sep-05 |
Ugandan |
Concession |
273 |
|
10 |
ULI Ltd - Kiryana Ranch |
Ziwwa Ranchers |
May-02 |
Ugandan |
Concession |
850 |
|
11 |
ULILtd - Kyempisi Ranch |
Royal Ranchers Ltd |
May-05 |
Ugandan |
Concession |
391 |
|
12 |
Kilembe Mines Limited |
Tibet Hima |
Sept-13 |
Foreign |
Concession |
|
4.0 |
|
|
|
|
|
|
|
|
1 |
Foods & Beverages Ltd |
James Mbabazi |
May-96 |
Ugandan |
Auction |
670 |
|
2 |
Fresh Foods Ltd |
Eddie & Sophie Enterprises |
May-96 |
Ugandan |
Auction |
1 |
|
3 |
K'la Auto Centre Gomba M. |
Management |
Nov-95 |
Ugandan |
Auction |
110 |
|
4 |
Republic Motors |
Rafiki Trading Company |
Dec-95 |
Ugandan |
Auction |
902 |
|
5 |
Uganda Hire Purchase Co. |
Tadeo Kisekka |
Nov-95 |
Ugandan |
Auction |
24 |
|
6 |
Winits (U) Ltd |
EMCO Works Ltd |
Oct-95 |
Ugandan |
Auction |
103 |
|
|
|
|
|
|
|
|
|
1 |
Gov' Central Purchasing Corp. |
Management and Employees |
Jul-00 |
Ugandan |
M B O |
1,090 |
|
2 |
Printpak (U) Ltd |
Cancelled-Assets owner - Lonhro |
|
Ugandan |
M B O |
0 |
|
3 |
Uganda Hardwares Ltd |
Management |
Oct-95 |
Ugandan |
M B O |
29 |
|
4 |
Uganda Motors Ltd |
Management |
Nov-95 |
Ugandan |
M B O |
804 |
|
|
|
|
|
|
|
|
|
1 |
NH & C C |
Libyan Arab Foreign Inv'nt |
Jun-05 |
Foreign |
Debt-Equity Swap |
|
20.3 |
2 |
Shell (U) Ltd |
Shell Petroleum Co. Ltd |
Dec-92 |
Foreign |
Debt-Equity Swap |
12,790 |
|
|
|
|
|
|
|
|
|
1 |
Nile Breweries Ltd |
Madhvani Group |
Apr-92 |
Foreign |
Repossession |
731 |
|
2 |
Ug. American Insurance Co. |
American Life Insurance Co. |
Nov-92 |
Foreign |
Repossession |
n/a |
|
3 |
Uganda Crane Estates Ltd. |
Buganda Kingdom |
Jun-97 |
Ugandan |
Repossession |
n/a |
|
4 |
Uganda Securiko Ltd |
Securiko (U) Ltd |
Aug-93 |
Foreign |
Repossession |
n/a |
|
5 |
Uganda Tea Corporation |
Mehta Group |
May-94 |
Ugandan |
Repossession |
n/a |
|
|
|
|
|
|
|
|
|
|
Total transactions |
96 |
|
|
|
|
|
|
Liquidations/Strike Offs |
39 |
|
|
|
|
|
|
Total divestiture transactions |
135 |
|
|
|
|
|
Proceeds
As may be seen from the table above, by end of last year, a total of 135 divestiture transactions were concluded. Liquidations and companies struck off the register were 39. From a total 96 PEs therefore, the process so far has generated Shs640, 314bn. Divestiture costs including settlement of terminal benefits total Shs. 567,186bn. An additional Shs. 48,060bn was contributed towards the Energy Fund. The outstanding liabilities majority of which are terminal benefits' claims largely premised on legal claims total Shs239, 125bn. The entire accountability process for the resources generated and spend by the PU is the subject of annual audits and its related audited reports are on record with Parliament of Uganda.
Outstanding
A total 25 PEs remains to be divested in accordance with the PERD ACT. There has been efficiency and performance improvement that have been registered in some of these companies as a result of rigorous reforms and performance monitoring. There is an on-going process to rationalize; reclassify and reposition some entities in line with new national policies and interests. Companies that fall under this category despite being in the PERD ACT include National Water and Sewerage Corporation, National Enterprise Corporation, Uganda Air Cargo and Uganda Development Bank among others.
Other benefits
The achievements of the policy may be analysed from two broad aspects. The Micro level achievements that focus on the improved performance of the divested and/or reformed enterprises and the Macro level impact that looks at the contribution of the policy to other areas of the economy.
Micro level
As earlier stated, 96 divestitures have to date generated Shs640, 314bn. In addition, government role in commercially oriented Public Enterprises has substantially reduced hence increasing private sector participation. The process has also brought in some proceeds that are being applied to settle part of the sector's liabilities.
Privatised Public Enterprises capital investment has greatly increased due to major investments made after divestiture. The Telecommunication Sector for example has attracted over USD 850 million in investments in both post and telecom infrastructure. Similar trends have been noted in the transport, hospitality, agricultural and industrial sub sectors. At the enterprise level, this is a major shift from the situation where public enterprises had to seek government funding to meet their operating expenses.
Efficiency and production improvements were registered in the majority of the sectors. There is clearly documented evidence in the agricultural sector, hotels, banking and the telecommunication and communications services sector. The 2010/11 Posts and Telecommunications Market Review Report by Uganda Communications Commission indicated that the share contribution of the two arms of the subsector to GDP increased from 5% in 2009/10 to 6% during 2010/11. That level of contribution to GDP is higher than what the entire Public Enterprises Sector was contributing to GDP at the inception of the Policy.
In addition to cutting down on the sector's dependence on the National budget, Privatised and reformed enterprises contribution to financing the government budget through payment of taxes that has gone up. Taxes paid by the privatised enterprises account for approximately 70% of the top taxpayers in the country. These are either divestitures, liberalisation and or, reformed enterprises.
Macro level
The implementation of the policy has also had profound positive impact on macro aspects of the economy:
Private sector development
Liberalisation of the sectors that had hitherto been state monopolies resulted into increased competition and benefited the emerging private sector in terms of improving their performance particularly in the services, agro-processing and manufacturing sectors. As a result of the dismantling of price controls, commercialization of Public Enterprise activities and their eventual privatization, the Ugandan consumers have also benefited from the availability of increased variety and higher quality of goods and services at more affordable prices.
Along side acting as a key catalyst for Foreign Direct Investments, the privatisation process has acted to deliberately ensure spread of ownership of Public Enterprises amongst Ugandans. The process facilitated the establishment of the Capital Markets Authority (CMA) and Uganda Securities Exchange (USE) in Uganda. The Program has supported growth of capital markets in Uganda from a maiden market capitalisation of UGX 1.46 billion in 1999 to the current capitalisation of UGX 12.7 trillion as at end June 2011.
Improved management and accountability
Public Enterprise restructuring has led to improvements in management as well as service delivery and accountability. A number of privatised enterprises have complied with strict accounting and reporting standards qualifying them to list on the stock exchange while those that are still under government control have had their accounts brought up to-date and most public enterprises now have fully constituted and functioning boards.
The reforms in various sectors (formerly controlled by quasi monopoly Public Enterprises) have resulted in the establishment of autonomous regulatory agencies. The agencies are playing the role independent amperes in setting rules for market players and in the process safeguarding and promoting standards and stakeholder interests.
The role of Parliament
It is in order to point out that whereas the privatization process was an initiative of the executive in the formative years, it is well documented that at the peak of its implementation Parliament was a key participant through the cabinet subcommittee, DRIC. Prominent Members of Parliament namely Musumba and Mwandha played a key role and guided divestiture decisions and implementation until the operating procedures were reviewed by the same Parliament in the year 2000. Parliament introduced divestiture guidelines which are currently part of the PERD ACT.
The writer is a senior public relations officer and spokesman of the Ministry of Finance, Planning and Economic Development