“These companies that want this money, have they explored all the available avenues?"
The Anti-Corruption Coalition Uganda wants Parliament to compel government to come up with a clear position regarding the bailout of some debt-burdened city businesses.
Over the past couple of weeks, a list has been circulating, indicating a select number of city tycoons who need financial relief to avoid their businesses from being closed.
Cissy Kagaba, the executive director of the Anti-Corruption Coalition Uganda, says there must be clear procedures for assisting such business people because bailing them affects the national treasury.
She is also questioning whether the struggling businesses have looked into all other possible channels.
“These companies that want this money, have they explored all the available avenues in order for them to be sustained? Because the ideal would be you try all options, and has actually government put them to task to explore all other options before they give out our money? Because this is our money,” she says.
“And the ideal would be either liquidate, because we are operating in a capitalistic economy. Of course our president was saying that he doesn’t believe so much in a capitalistic economy but again, we also know that the way the economy is running is more of a capitalistic economy and we cannot keep changing goal posts as and when these issues are going to affect us.
“But again, we need to ask ourselves ‘where is the money going to come from?’”
Some of the companies that have been reported by local media over the past weeks to be needing bailout include Simba Group owned by Patrick Bitature, Hotel Sejovalo located along Rubaga road, Roofings Ltd on Entebbe Road, Club Silk in industrial Area, Steel Rolling Mills, among others.
They have been understood to require over sh1 trillion to reinvest in their operations to avoid shutting down.
Amid the bailout talk, there have been questions over where the bailout money would come from. There had emerged claims that the National Social Security Fund (NSSF) intended to give out some workers' funds to the government to be extended to the over 60 struggling companies.
But NSSF managing director Richard Byarugaba refuted the allegations, saying that under the Uganda Retirement Benefits Regulatory Authority Act 2011, the Fund is barred from investing in any company not listed on the Uganda Securities Exchange (USE) as a known profit-making company.
Meanwhile, the Central Bank also refused to relax the current regulations governing lending by commercial banks, in response to a proposal by the Government to relax the regulations as part of a package of measures to rescue financially distressed local companies.
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