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Vaccine factory owner seeks Shs2.2t bailout
Mr Mathias Magoola (right) speaks to the minister for Science and Innovation, Dr Monica Musenero (2nd right), and other officials at Dei Biopharma manufacturing facility in Matugga on March 22, 2023. PHOTOS/SYLIVIA KATUSHABE
What you need to know:
- Mr Mathias Magoola says government support will enable him complete work on a plant in Matugga, north of Kampala.
A Ugandan entrepreneur who gained national attention when he, in the company of then Speaker of Parliament Rebecca Kadaga and a moustached American guest, told President Museveni that they had discovered a Covid vaccine at the onset of the pandemic, is seeking $600m (Shs2.2 trillion) government bail-out.
Mr Mathias Magoola, the proprietor of Dei Bio Pharmacy Ltd, said he requires the cash to complete construction of a pharmaceutical company in Matugga, north of Kampala.
Speaking to a group of visiting ministers at the incomplete facility yesterday, Mr Magoola said he had received $100m (Shs370b) of an expected $400m (Shs1.4t) from Equity Group Holdings and other financial institutions, but his luck ran out when Bank of Uganda (BoU) informed the funders to stop disbursements and instead reclaim their money.
BoU sucked in
The central bank, according to the entrepreneur, told the financiers that he had diverted from milling to pharmaceuticals, which was a business plan riskier and different from the original.
We were unable to independently verify these claims. It also remained unclear if the government had guaranteed the loan or why BoU, which is the financial sector regulator and banker to the government, intervened.
President Museveni accompanied by then Kenyan Deputy President William Ruto, now President, launched construction of the Dei Bio Pharmacy in July 2021 to make biological drugs and mRNA vaccines.
Mr Museveni at the time said the investment would help Uganda, and Africa, tap into the “pathogenic economy”, a moniker coined for financial gains from communicable diseases.
In their meeting at the onset of Covid in 2020, Mr Magoola and his American guest claimed to have found a jab for coronavirus and that it killed all viruses and bacteria. Since that proclamation, which came as nations scrambled for a solution to the pandemic, nothing tangible relating to vaccines has come from the claimants.
Now Mr Magoola says the works of the factory in Matugga have progressed to 90 percent and a $600m (Shs2.2t) bail-out would enable him finish the construction, import and install machines and start vaccine and drug making.
Part of the new credit line would be used to repay the Shs370b picked from Equity Group Holdings and other unnamed lenders.
We were unable to reach out to the principal financer for this story, but according to information on its website, the institution offers “integrated financial services that socially and economically empower consumers, businesses and communities”.
Purpose
When operational, the Dei Bio Pharmacy plant is built to manufacture an unnamed Covid-19 vaccine, cancer and antimalarial drugs, among others, Mr Magoola said.
He did not indicate whether he has invested his own resources and, if so, how much before picking the Shs370b loan that he said he failed to service due to pandemic disruptions.
The bailout request ostensibly for making, among others a Covid jab, comes a day after this newspaper reported that government scientists admitted making Covid vaccine may take Uganda between 15 and 25 years.
This is a significant drawback from their initial more optimistic assessment that a vaccine would have been ready by end of 2021, which is what the President subsequently drummed up in nationally-televised addresses.
Sources told this newspaper that once in a tight corner, Mr Magoola reached out and tabled his financial relief request to Dr Monica Musenero, the minister of Science, Innovation and Technology, who in turn briefed Cabinet colleagues.
Ministers visit
That briefing then led to the visit by the ministers to the plant site to appraise themselves of current progress of works and evaluate whether the bailout is justified.
“Equity as a group had pledged up to Shs1.5t ($400m) for this project. When we were still withdrawing from that cheque, our regulator here (Bank of Uganda) writes to Equity, saying that it seems the project is risky. Secondly, Magoola diverted the money from the milling business to a small pharmaceutical project,” Mr Magoola told the visiting ministers.
He added: “The regulators are accusing us of diverting money from the milling business … was very unfortunate. My financier wrote to BoU, informing them that they know my project and asked them to go down and see [the project works], but BoU refused.”
Equity terminated the cash flow and demanded a refund, the entrepreneur said, catching him unawares.
“Before we were sabotaged, we were comfortable and we were doing our project on our own but because of the sabotage, we got hit and know the story very well, but I don’t want to go into that because we are looking for a solution,” Mr Magoola said.
This publication was unable to verify Mr Magoola’s allegations against the entral Bank. When we contacted last evening, the BoU spokesperson, Ms Charity Mugumya, said she was held up in a function and promised to respond within the 24 hours. However, by press time she had not responded.
Ministers impressed
Minister Musenero yesterday said the project is worth supporting as it’s the only facility in Africa that the United States Food and Drug Administration (FDA) approved. We could not independently verify the claims.
She noted that when once operational, drugs made at the facility will be sold in any part of the world due to expected high quality.
“It is going to make our country the leading country in pharmaceuticals on the continent if it begins works. The government is going to figure out how they will get engaged with him,” she said.
Justice and Constitutional Affairs Minister Norbert Mao said he was impressed by the project and rallied colleague ministers to support the idea of the government bankrolling remaining project works.
He promised to be the ambassador of the project until it gets money for completion as it will fetch money for the country.
Among other ministers that visited the facility were Gen Katumba Wamala (Works), Mr Raphael Magezi (Local Government), Ms Harriet Ntabazi (State for Trade) and Ms Hellen Asamo (State, Disability).
