Ugandan National Airlines: A bird not made for flying

The Ugandan National Airline Company is the sort of State Owned Enterprise (SOE) which is the epitome of everything done wrongly. The company was launched with grandeur. As socialites and others was on the maiden journey. The airline was aiming for the skies and for the moons.

However, the way it was launched. The stakeholders, the shareholders-structure and everything else was put into the question. Just the questionable way of ownership and secretive deals was a detriment from the get-go.

This company was launched in 2019, but now by 2021. The Board of the Company is either on-leave or suspended. What we do know is that its a mess. Where the company had the opportunity to pay civil servants to get favourable reports of the standing of it (stated in the Confidential Report of 27^th January 2021). Though the Auditor General gave it a bad report. Where the company already was only earning 10% of projected revenue. Meaning the company had a 90% shortfall of revenue. That was the OAG Report February 2021 saying about the company.

Now, there is leaked a Confidential Report of 27^th January 2021, which is showing more dire needs too. The report for instance states that members of board is promoting self-interests, instead of safeguarding the interest of Ugandan Airlines. There members of the management team who tries to find way of invoice loading or other money-making schemes from the Airlines. Procurement managers worked directly with people in the government ministry to find ways of making money out of the airline. That means the company culture is wicked already.

What is also striking is that officials from the ministries in the contracting processes, but these officials didn’t understand aviation or the supply chain of an airline. That’s why the airline didn’t have proper boarding passes in the beginning. This also resulted in procurement of high prices, lack of supplies and ensuring the services needed. The lack of expertise and people with knowledge of the aviation industry was also a burden on the company.

That plus the lacking funds needed to keep the company is showing how this has been a cash-cow for the officials, the board members and everyone running the company. Everyone have been able to pull the tenders, the procurements and the services to get a quick buck. The state owned company has become a fountain of coins.

The Uganda National Airlines Company Limited is clearly run like a bird with no wings. It is a reason why its an expensive flashy bird, but not really ready to fly. The wings are clipped off and it’s just a spending spree with no end.

The reports of the reckless spending, the operational costs and the arrears from previous years are just growing. Only by the time of 2019 the company lacked UGX 133 billion shillings. Funds required in the budget year of 2020/21 is close to UGX 219 billion shillings. The state budget is already creating a shortfall of UGX 101 billions shillings. The budget was UGX 117 billion shillings. The arrears of the airlines is already as high as UGX 219 billion shillings, which will cover the last two years arrears. This shows how bad things are…

The state run company is clearly not only mismanaged, but been a corrupt fantasy-land.

This bird shouldn’t fly. It isn’t a dream, but a corporate nightmare. Peace.

OAG Report put Uganda National Airlines Company Ltd on blast

The Uganda National Airlines Company Limited (Ltd.) was registered in March 2019, but incorporated on the 30^th 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.

ANC: Statement of Officials of the African National Congress regarding urgent Economic Priorities facing South Africa (06.06.2019)

EFF Statement on Negative Economic Growth under Ramaphosa Leadership (04.06.2019)

Report to the Media on Status of the Revival of Uganda Airlines (10.04.2019)

Uganda National Airlines: Let’s Get It Started!

“Everybody (yeah), everybody (yeah), just get into it (yeah), get stupid (come on)

Get it started, (come on) get it started (yeah), get it started” – The Black Eyed Peas, ‘Let’s Get It Started’ 2003

Well, this week has been revealing in concerning the supposed newly minted airlines in Uganda. Where the state incorporated Uganda National Airlines Limited in January 2018. However, the supposed registration and certification happen this week. The documentation now shows, that the Ministers are owners of the Airline and it’s registered on the 26^th March 2019 and certified on the 27^th March 2019.

Alas, the state has already spent close to $30m USD on it, as they have procured several of planes for the operations and the first are supposed to arrive on the 31^st March 2019. Therefore, the whole ownership and usage of state funds comes into question. As the Report to Parliament confessed that the state and the two ministries only owned 2 shares out of 2 million, until yesterday, when suddenly the Ministers of Works and Transport and Ministry of Finance, Economic Planning and Development suddenly had 1 million shares each, a 50 50 split.

This all seems suspicious and within reason. Because, it has been done in wrong order and ensured to not follow procedures or anything of that fashion. As the State for the second time are infringed to deliver new funds to State Owned Enterprise, even as the ghosts of owners and registration suddenly appears. You can wonder, if they would have done this, if it didn’t get public scrutiny. Because, the scribbling document of ownership only appeared, when the Observer and other media houses questioned it.

This shows that there was something lurking and weird about it all. Where the insiders and the ones operating it, maybe, had shell-companies and significant portfolios, where they could earn the profits of this state owned enterprise. That would not be shocking, even if all the investments, all the funding and procurement have happen directly from the Ministries and with the blessings from above high.

With all of this in the open. It seriously question the operation, the ownership and who really controls the company as whole, because its hard to believe the two ministries does it. As it was incorporated in January 2018, but was registered shareholders yesterday, a year and two months after. Which is suspicious at best, if not revealing of how the state operates in this matters.

We can play along and act a fool, but that doesn’t change the remaining questions, the lack of trust and also the lack of protocol. As the state have toyed around spent fortunes on establishing, procuring and investing in the company, while it has been a ghost and non existing entity, which could be someone’s secret bank-account.

Certainly, this is not over and will leave a giant paper-trail that somehow will be resolved in the State House and by whoever the benefactor whose project this is. Because, that is the rule of the day and how these things are under this Presidency. It is common knowledge, but never really said or revealed, unless, family members of the President owns it or runs it. Peace.

URSB: Uganda National Airlines Company Ltd Certified today (27.03.2019)

A fresh report states the sketchy things about the ownership of the Uganda National Airlines Company Limited!

“Hold fast to dreams,

For if dreams die

Life is a broken-winged bird,

That cannot fly.” – Langston Hughes

Today, there was tabled a report on the 26^th March 2019, reported titled: “Report on the Budget Committee on the Supplementary Expenditure 2 for FY 2018/19” especially the vote – “Vote 016 MOWT – USHS 280.046 For Financing Costs of Uganda National Airline”. In this report there are vital information coming up. That I will address, but also show, as it proves how the state plans to invest the taxpayers money on the airline, but also what sort of finance it has already.

The government clearly have already invested money into it, but doesn’t have ownership in it. That is what the report says. It shows intent of investing more in it, but not actual ownership of it. However, not claiming it, which is weird, but that is what they do. They are buying planes for it and investing in it, but not owning it. That is what they are initially saying. This is really rare and weird.

Here is the quotes from the report that matters in my sense:

“The Government of Uganda has injected approximately 29.9 USD million into this company but has only 2 shares allocated to it”

“Ministry of Works and Transport has requested for on additional Ushs 280,046,77 6,933 to cater for investment costs of the Uganda National Airline”

“The Ministry of Finance, Planning ond Economic Development indicated that it was to use proceeds from MTN licence amounting to USD 60 million (approximately UGX 222 billion) to portly finance Uganda National Airlines”

“The shore capital of Uganda National Airlines Company Limited is 200 million divided into 2 million shores of UGX 100. Of the 2 million shares only 2 shares worth UGX 200 to Minister of Works and Transport as well as Ministry of Finance, Planning and Economic Development. This makes both ministries to be minority shareholders holding only 0.0001% of the shores. At the moment the owners of the 99.97 shares are unknown. The owners will only be determined when the Directors decide to allocate the shares. It was asserted that the minority shares will be floated to the public. However contention arose as to whether the minority shareholders can float what they do not own. lt was however asserted that this move was undertaken to limit the liability of government. Hence a concern pertaining intension of government to establish o company that it already roles 10 be huge liability from the onset”

As you see, the $30m been invested in the Airline already. The Government and Ministry of Works and Transport, that they need more funds. Also, telling their lack of the shares in the company, while also planning to use licencing funds from MTN to cover the spending on the Company. Which later, in the Report states they will not, but I added to prove how the state spend the revenue it is getting.

The Uganda National Airlines is clearly not well-managed or well prepared, as it is a pile of expenditure, but not allocated what it needed. Since, the state is in need of more after spending millions already. As the first planes are coming in the coming week. Therefore, the National Resistance Movement and the ones behind it is clearly playing games.

They are spending public funds on a possible Uganda National Airline Company Limited, when they arrive. Since the report turned public the GCIC have claimed this in response to the report delivered. Which clearly shows the significant stature of the ownership in question.

They are claiming this:

“ CLARIFICATION: There has been misleading information regarding shareholding of Uganda Airlines Company LTD. The company was incorporated on 30th Jan, 2018. The company has 2 million shares. Minister for Works was allotted 1 million shares & Minister for Finance, 1 million shares. 3/3: In July, 2018, the management of the company allotted the entire shares of the company as follows:

1. Minister of Works & Transport (represented by Hon. Monica Azuba Ntenge)- 1 million shares.

2. Minister of Finance (represented by Hon. Matia Kasaija) – 1 million shares” (GCIC, 27.03.2019).

This is countering the facts in the report, that even before the ink is dry. Before the time and test of the knowledge given by the Ministry and the Government itself. So why does the GCIC have other indications and facts, than the report. You can wonder who gave them and where it is from? Why wasn’t this given as facts to Parliament and signed of by the Members of Parliament then?

Well, this will be played out in real-time. This is not a fan-fiction, West-Wing drama, no this is real live events of the operations and investing in the resurfaced Airline Company. This shouldn’t be that tricky or played out like this, but it is because the state and the ones involved in it. Because, there must be some loose ends, which is not yet caught. It will eventually. Peace.

Economic Freedom Fighters Statement on the Liquidation of African Global Operation Group of Companies, known as BOSASA (18.02.2019)

Chinese Investments in Africa: It is not a free-lunch, the tab has to be paid!

“African leaders should not turn the continent into a giant collector of donations and loans from wealthy nations—they must find other plausible means to help established their economic security so as to minimize poverty. This incoherent blunder on the mainland must be scrutinized.” – Duop Chak Wuol

As The 2018 Beijing Summit of the Forum on China-Africa Cooperation (FOCAC) is scheduled to happen on the 2^nd and 3^rd December 2018, there is time to remember how the Chinese is operating on the African Continent. The Chinese isn’t coming with empty giving hands of donations or even charity. They come with intent of interests and needs of resources from the continent, by offering loans, serving and building through state owned enterprises (SOE) in various of countries, whether it is roads, ports or railroads are built by Chinese Companies, by Chinese Workers and often on Chinese loans. Therefore, they might end up as Chinese owned enterprises, whose vital for transportation and export of needed minerals and whatnot from the continent.

Instead of coming with loans and direct-aid with strings like Western Powers has done over the last few decades, the Chinese are coming with friendly loans, but the Heads of State should know that the Chinese doesn’t play. They want value for money and expect a return, if it doesn’t they might snatch the new crown-jewel or anticipate to get perks from the state. If that is some sort of trade-off or licenses to extract mineral resources or even minor taxation like toll-roads, where the piece of cash will be sent to Beijing and not the capitol of the country where the road is built. That is how these people operate. They are not in it to play or be giving, but gain advantage and have the upper-hand.

This can be shown by what the State Media in China writes in Xinhua Net wrote today and what a CARI report on the same funds are saying. The Chinese portray the funding as investments on the Continent, as the funds are most likely pushed as loans, which burdens the states and that they have to repay. Loans are not given, but issued because of lack of direct funds to build those infrastructure and investments done. So, what I am saying isn’t mere speculation, but a narrative that has to sink in.

Chinese Investments:

“China’s investments into Africa surged by more than 100 times from 2000 to 2017. In the past three years, annual Chinese direct investment into Africa was about 3 billion dollars on average. By the end of 2017, China’s investments of all kinds into Africa totaled 100 billion dollars, covering almost every country on the continent” (Li Xia – ‘Facts & Figures: China-Africa ties: cooperation for shared future’ 02.09.2018 link: http://www.xinhuanet.com/english/2018-09/02/c_137438845.htm).

Chinese Loans:

“From 2000 to 2017, the Chinese government, banks and contractors extended US $136 billion in loans to African governments and their state-owned enterprises (SOEs). Angola is the top recipient of Chinese loans, with $42.2 billion disbursed over 17 years. Chinese loan finance is varied. Some government loans qualify as “official development aid.” But other Chinese loans are export credits, suppliers’ credits, or commercial, not concessional in nature. China is not Africa’s largest “donor”” (China Africa Research Initiative – ‘DATA: CHINESE LOANS TO AFRICA’ Version 1.1 August 2018).

They might try to conceal the reality, just like make-up is used on the face to fade the age or even marks that shows stress or pimples. However, the Chinese cannot be able to lie about their intent. They would not offer these sums of cash, without expecting a turnover or even profits. The Chinese wouldn’t allow all these billions of US Dollars spent on these nations to be spoiled and lost on the streets of Lome, Harare, Addis Ababa or Nairobi. They anticipate a return on the loans, either straight cash or getting pieces of the built infrastructure to advance the value of the Belt and Road Initiative (BRI).

That the Heads of State in Africa should be concerned as they are getting in debt traps, instead of being in cycle of positive growth, they are getting new loans to pay the old ones. They are using the same creditor to secure new loans on top of the old-debt. That is how it will continue, until a point where they cannot pay the defaulted debt and the Chinese would then come to snatch something of value to recoup the failing debt. Because they don’t want to write-off the big money without having anything in return. That is what the Chinese has done in Sri Lanka and might start elsewhere. There might be soon more control of port in Djibouti or railroad of Kenya, even the Ethiopia-Djibouti railway line too. As they want their value of money.

They might be all smiles and photo-ops in Beijing these days, the smiles and added loans to dozens of countries. The added “investments” and deals struck, but the Chinese will not do so without getting something in return. To think otherwise, is to be naive and think they don’t have an agenda by doing it.

There is nothing like a free-lunch and the people will learn that, the Heads of State will not directly pay the debt, but the states will do so. Maybe not in this decade or next 5 years, but sooner or later. The bill for the coffee and biscuit will come. Than it is all eaten, but tab still has to be cleared. Peace.