UDC to list government-owned firms on stock market
Former Coffee Marketing Board head offices in Bugolobi, Kampala. The defunct government enterprise may be rejuvinated soon. PHOTO STEPHEN WANDERA
What you need to know:
Funding. The corporation is supposed to be capitalised with Shs500 billion though it is yet to receive the money.
Kampala. Uganda Development Corporation (UDC), the government development and investment arm, plans to rejuvenate ailing and defunct public companies before listing them on the stock market.
According to UDC executive director Emmanuel Mutahunga, the move, if actualised, will allow the general public to buy stakes in rejuvenated government-owned firms.
Presenting the UDC 2017/18-2032/33 strategic plan at a retreat in Lweza, Wakiso last week, Mr Mutahunga told members of the parliamentary committee on trade, tourism and industry that the corporation will conduct detailed studies of all the government owned-firms to rejuvenate those that are strategic in the growth of the economy.
He said the studies to be undertaken will include privatised firms too.
Those that are not doing well will be considered for reinvestment.
He said: “We shall invest in our companies and once they are back on their feet, we shall then float shares to the general public in an Initial Public Offering.”
UDC is charged with promoting and facilitating industrial and economic development in the country, with its major function being to improve investment in key sectors of the economy.
It can also take over, manage, promote and facilitate entities in which government has interest.
This is in addition to promoting, funding or guaranteeing financing of any task either in the country or outside Uganda among other mandates.
Nature of investment
State minister for Trade Michael Werikhe Kafabusa, in an interview, said there is no problem with UDC reviving ailing or defunct government firms.
He, however, stressed that priority will be investing in sectors that are perceived to be high-risk or not attractive by the private sector.
He said emphasis is on agro-processing, manufacturing and industrialisation plus areas whose initial capital requirements are high and risky, but important for the country’s development will be considered first.
Funding gaps
During the retreat, UDC revealed although the law stipulates that the corporation should be capitalised with Shs500 billion, that has not happened.
According to Mr Alex Ruhunda, the chairperson of the Parliamentary Committee on Trade, Tourism and Industry, since UDC didn’t have a strategic plan it was difficult to make a case for it for the required money.
He said it would be a disaster to have that money without a plan. But now that there is a plan, he said they will push for its recapitalisation starting next financial year.
With the strategic plan in place now, Mr Mutahunga said he is now ready to make a case for the need to industrialise the economy and solve the unemployment question.
Privatised firms
Some of the privatised firms include;
Uganda Spinning Mills, Nile Breweries Ltd, East African Distilleries, Uganda American Insurance, Shell (U) Ltd, Lake Victoria Bottling Co. Ltd, Uganda Securiko Ltd, Agricultural Enterprises Ltd, Uganda Tea Corporation Ltd, TUMPECO, White Horse Inn, Blenders (U) Ltd, Hotel Margherita, Mt. Moroto Hotel, Rock Hotel, Uganda Cement Ind. -Hima, Lira Hotel, Soroti Hotel, Hilltop Hotel, Uganda Fisheries Enterprises, Mt. Elgon Hotel, White Rhino Hotel, Uganda Leather and Tanning and Uganda Meat Packers Ltd, among others.
