Posta Uganda head officers in Kampala. PHOTO/ COURTESY OF POSTA UGANDA ON X
Parliament in the past workweek unearthed displeasing findings eating up the already crippled Posta Uganda, whose management is choking in billions in unsettled arrears.
The six-member Ad-hoc committee chaired by Napak Woman MP Faith Nakut has since discovered that Posta Uganda operates illegally considering its license expired three years ago.
The committee's interfaces with various stakeholders, including the Uganda Communications Commission (UCC), Ministry of ICT and National Guidance, have shown that Posta Uganda management and its board periodically endorse salary increments despite its financial struggles.
In the first interface held on Monday afternoon at Kingdom Kampala, UCC officials reported to the committee that Posta Uganda's mail and deposit license expired in 2021.
In the revelation to the committee digging into financial pitfalls sinking away Posta Uganda, the head of legal affairs at UCC, Mr Abdul Salam Waiswa, said the government's mail outlet also shoulders a Shs1.7 billion burden as unpaid license fees accumulated since 2017.
“We are ashamed to say this… their license expired in 2021 and we have repeatedly told them, please apply for renewal of your license. Amid all your challenges, you can’t continue operating. These letters are many, but we have been telling them, please apply for a license so that we deal with other operational issues because you can’t operate effectively without a license,” Mr Waiswa said.
Mr Waiswa, however, advised against the closure of Posta Uganda and instead advocated for a financial bailout.
“As UCC, we know that Posta is our operator locally here. So we can’t be seen internationally that we have closed postal operations because if we do, we must be able to present to Universal Postal Union, whoever else we have designated,” Mr Waiswa said.
He added: “In fact, in one of the meetings at Parliament, we were being blamed for not closing Posta Uganda because of the debt and not having a license, but we are aware of the international obligations, the critical and strategic role they play, that is why sometimes our hands are tied. How do we balance the two?”
In the same interaction, legislators also reported that Posta Uganda has not cleared Shs1.2 billion in rental tax and Shs1.4 billion VAT arrears to the Uganda Revenue Authority (URA).
When he interfaced with the same committee at Parliament on Wednesday afternoon, State minister for National Guidance Godfrey Kabbyanga Baluku confirmed that his ministry had not remitted part of its share capital arrears totalling Shs15 billion.
“In 1998, it was around Shs5.5 billion. Now, if you look at the share capital needed, it would be around Shs15 billion. So it is true that we have not yet paid this share capital but we have submitted to the Ministry of Finance which is the majority shareholder,” Mr Kabbyanga said.
He added, “Every year we plan for that and it is never given, so it is our wish that this committee makes a very strong recommendation, that you cannot complain about Posta not performing when you are not capitalising it.”
Posta Uganda, which is jointly run by the Ministry of Finance (99 percent share) and Ministry of ICT (one percent share) could be falling out of the government's grip.
This is after Mr Karim Masaba (Industrial Division Mbale MP) pressed on allegations that Posta Uganda had been doled out to an unidentified investor.
In response, the principal engineer at the Ministry of ICT, Mr Paul Odoi, only confirmed that the deal was inked but declined to divulge details.
"Ministry of Finance has 24 percent and ICT has 16 percent,” Mr Odoi said, adding that the undisclosed investor has 60 percent.
In addition to the colossal arrears, it was established that its board members revised their salaries upwards.
"When you look at the current board, four of the members are former Members of Parliament. And one of the challenges we have found so far is that there has been a weakness in the management of Posta Uganda,” Mr Masaba noted.
He added, “They have been getting overdrafts and in the last two years alone, it is over Shs2 billion. And part of this is to pay for their remuneration. That means they are requesting an increment without having money. So they are getting more into debt to increase their remuneration.”
In response, Mr Kabbyanga said, “One thing that informed us to appoint them is that they are men and women of integrity. Being a former Member of Parliament does not mean you don't have integrity and can't take over any responsibility. We looked at their experience, and exposure skills and then we appointed them. Therefore, I have no regrets of appointing former Members of Parliament.”
Remuneration of the board is normally proposed by the board, and if they give justification that they have money to pay, the ministry approves.
Mr Masaba wondered, for instance, why Posta Uganda staff pocket Shs93 million annually and yet they cannot plan for Shs37 million required for license fees.
“The airtime allowance is Shs93 million and that is for one year. If they decided to cut the airtime allowance by maybe half they would have the money required to pay the license,” Mr Masaba said.
Remedy
Mr Waiswa was also quick to indicate that the government has held several meetings to find a middle ground.
“We have had internal conversations in UCC that maybe if Posta Uganda continues in this state, we may come up with a strategic recommendation to consider that route. Unfortunately, with that route, you are empowering another person. Some of the entities that will compete for that role will be international operators like DHL and that comes with obligations, you must have a universal presence and the private sector can’t absorb all. That is why as UCC, we are trying to handhold Posta Uganda to meet its obligations both locally and internationally,” Mr Waiswa said.
UCC executive director Nyombi Thembo asked the committee to push for Parliament's intervention, reasoning that the entity holds vast opportunities for the government to exploit if given a financial bailout.
“They need somebody to leverage them, they can’t do it on their own. The re-engineering that we are talking about required by the Post Office has enormous financial resources which they can’t get, so a third party has to assist them... Money has to be put in Posta Uganda if we are to have it. The government has to make a decision and if they are to come to us, we shall tell the government that yes, we need the Post Office to be there,” Mr Nyombi said.
The committee is yet to schedule a meeting with the management of Posta Uganda although the exact date is yet to be confirmed.
Background
The current probe commenced after Speaker Anita Among on October 14 instituted a six-member team to dig into the financial distress in which Posta Uganda is trapped.
This followed a report by the Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) that inquired into the findings raised in the 2022/2023 Auditor General Report.
The committee is tasked to premise 10 terms of reference that are supposed to inform the investigations and later report back to the House with specific recommendations to the entity.
