The Uganda National Airlines Company Limited (Ltd.) was registered in March 2019, but incorporated on the 30th January 2018. That was done with shares both in the Ministry of Works and Transport (MoWT) and Ministry of Finance and Planning & Economic Development (MoFPED). That happened after scrutiny of it was all operating and who was really owning the company.
With that in mind, the statements or quotes from the Auditor General Reports of February 2021 isn’t helping the company either.
As it states this:
“Whereas Government had invested a total of UGX 934,840,887,000 and reflected it as an investment in the Treasury records at Ministry of Finance, only an amount of UGX200,000,000 was shown as Share Capital in the company statements, the rest of the amount was shown as Share Application Funds. The processes for recognition of the Government investment in the company have not been undertaken to enable appropriate treatment and reporting in the company’s books of account” (Office of the Auditor General, February 2021).
This here proves the problematic aspect of ownership and hows it still not operative. The Company is still not addressing the “owners” and what sort of role the government have in it. Still, the government is providing funds for it and investing in it. But… we cannot know who is owning it and what percentages the state has. That is obnoxious… and outrageous at this point.
It doesn’t help that this is the current results of the company:
“The company was unable to realize its planned revenue, yet the expenditure on operations was way above projected costs. The company only realized US$ 9,985,495 (10.8%) of the project revenue of US$92,863,811. On the other hand, the company incurred expenses that were beyond the planned costs and its actual revenue. For example; the company spent US$29,220,933 on direct costs, US$3,606,965 on indirect costs. As a consequence, the company incurred a net loss of US$27,477,513 in the year” (Office of the Auditor General, February 2021).
The company projections was clearly out of whack, but it also came in a year of the pandemic. So, the help of tourist and tourism to gain passengers went in the wind. However, the company is a pit-fall of money loss and wastage of public funds. They have spent money they don’t have and earned mediocre or nearly nothing while having huge bills. That is not a good way of running business.
It is also striking about who will pick up the bill and who will write-down the losses of this company. As the government involvement and unsure owner structure should make people question whose role is it to pay for the costs, which the company have created last year.
The Auditor General quotes isn’t strengthening the company nor its projections. Only that its a money pit and someone has to cover it. It has a higher burn-rate of cash than what it earns. That is a company running towards bankruptcy. One way or another. The government can save it again. It can save it another time too. However, how much value does it add and what services is the public gaining from such a company?
That is for someone else to answer, but there is no proof of now. That the state or the Republic needs this. It is a vanity project and flying high without money for gas (jet-fuel). Peace.