The
Deputy Speaker of Parliament, Jacob Oulanyah, has said that businesses in
Uganda collapse due to unexpected events in the financial sector and has called
for mergers to help them survive.
Oulanyah said that mergers and
acquisitions are a subject that ought to be embraced by entrepreneurs to keep
their businesses operational despite financial constraints.
“There are many companies in Uganda with big potential that have fallen because
of small gaps that can be easily sorted out through mergers and acquisitions;
and Crane Bank is a good example,” Oulanyah said.
Oulanyah
added that Uganda does not have an established indigenous capital base that can
facilitate local investments, which many a time inevitably close due to harsh
financial times.
“That is why there should be cheap financial options by Government that can
offer bailouts to our local investors through mergers and acquisitions of
promising companies,” Oulanyah added.
The Deputy Speaker said this while meeting officials from the Africa Management Services Company (AMSCO), who paid a courtesy call on him on Tuesday, 23 July 2019 in his boardroom to introduce the first edition of the Mergers and Acquisition Summit Africa scheduled for October 2019.
Oulanyah said that the loans system in the country often disadvantages many enterprises due to the stringent repayment policies.
“Knowledge on mergers and acquisitions will go a long way in supporting business entities that do not perform well,” he said, adding: “The ordinary people cannot compete with Government because banks favour issuance of treasury bills more than ordinary loans.”
Pius
Ngoga, an Associate Consultant at AMSCO, said that Africa as a continent has
lagged behind despite being a primary target for potential merger or
acquisition transactions by bigger international companies.
“This is a platform for the entire African continent to come together to
discuss how it can exploit such opportunities and thus the participation of
major stakeholders like Members of Parliament will be key,” said Ngoga.
The
summit will be hosted by Uganda for the first three years and thereafter, be
hosted on a rotational basis, which Ngoga says is attributed to East Africa’s
growth as an investment hub for local and international enterprises.
“East Africa has become the primary target for mergers and acquisitions and
that is why this summit is being held in Uganda that has a peaceful environment
which attracts investment,” Ngoga added.
The Summit scheduled to take place at the Munyonyo Commonwealth Resort will bring together major stakeholders from Europe, Asia and Africa with an aim to promote knowledge on essentials to execute successful mergers and acquisitions for African investments.
By Drake Nyamugabwa
