URSB on track to position Uganda as a debt restructuring hub

By Bemanya Twebaze

Uganda Registration Services Bureau (URSB) recently hosted a successfully 3rd Insolvency Conference which was held from 13th to 15th November, 2019. We concluded this conference with an ambitious agenda to position Uganda as a leading destination for debt restructuring, the first of its kind in Africa.  

For three days, we had intense discussions with the business community, insolvency practitioners, financial institutions, policymakers and judicial officers on how to rescue struggling businesses in Uganda from insolvency.

I am grateful to all URSB's strategic partners especially the Justice Law, Order, and Sector (JLOS), Judicial Training Institute, Ligomarc Advocates, MMAKS Advocates, Pwc and the Association of Insolvency & Business Restructuring Practitioners of Uganda for supporting our work and making the insolvency conference a success.  

 I also commend the URSB team for stepping up their efforts to serve and sensitize stakeholders on how to manage insolvency and how to improve their corporate governance.  Essentially, insolvency means that a company or individual is unable to pay accrued debts when they are due. In some cases, insolvency arises because businesses are poorly managed. Some businesses in Uganda grow by "accident" or sheer luck and characterized by poor record-keeping and corporate governance and this poses a high risk of insolvency. 

Uganda's insolvency legal regime was created with the objective of keeping more businesses open as opposed to closing them. This is because closing a business has financial implications to the entire economy. Most importantly, the business needs to be given a chance to redeem itself.  When a company is insolvent it can be placed in administration in accordance with the Insolvency Act of 2011 to help it recover from the financial stress. A company can apply for a protective order from Court which ringfences the assets of the company and gives it breathing space restructure its debts and negotiate with its creditors on payment schedules. 

 The whole idea of placing a failing business under administration is to turn it around and make it a profitable entity. Uganda's insolvency law focuses on helping businesses take on from where they fail.  Countries such as Singapore and the UK have become debt restructuring hubs which have made them globally competitive. We need to equip all stakeholders and modernize our insolvency legislation to make Uganda a debt restructuring hub which will ease doing business thus making the country attractive for investment. 

To move a step closer to building a robust insolvency ecosystem, URSB has strengthened its partnership with the judiciary to ensure participation in international trainings such as INSOL Institute Judicial Colloquium to equip them with the best practices on the resolution of insolvency disputes. During our second Insolvency Conference, we launched the Association of Insolvency & Business Restructuring Practitioners of Uganda with whom we have worked closely to organize this the third insolvency conference aimed at making Uganda a debt restructuring hub. Insolvency 

Practitioners who are entrusted with the responsibility of managing insolvency estates must be willing and able to focus on reviving insolvent businesses.   I, therefore, urge all stakeholders who attended the insolvency conference to sensitize their counterparts on how to avoid insolvency and if it sets it, how to use the business rescue mechanisms we have highlighted during the conference.

We commit to continue with these engagements to make Uganda a debt restructuring hub. 

The writer is the Registrar General, Uganda Registration Services Bureau