Posta Uganda offices/Courtesy photo
Experts have cast doubts on the proposals to bailout Posta Uganda to a tune of Shs19.2Bn, saying this capital injection may not be able to address the looming financial ruin the Company is facing, unless if a private player is brought on board to manage the company with Government.
The call was made by Ronald Olama, one of the former employees of Posta Uganda before the Company was disbanded. He was appearing before Parliament’s Ad hoc Committee that is currently probing the dealings of Posta Uganda.
“I think the Private-Public Partnership brings in a strong foundation of business management. So if you bring in PPP, then we shall bring in innovative and creative ideas of how to run Posta Uganda than Government just injecting in money because if Government just injects in money, we are going to go back to the same problem,” said Olama.
However, Karim Masaba (Mbale Industrial Division MP) wondered which genuine investor would be willing to sink their money in Posta Uganda given its dire economic situation, wondering if Government bails out Posta would increase the Company’s prospects of attracting an investor.
“All the previous people we interacted with, all of them were saying there is no investor out there who is willing to invest their money in a company that is already dying, that is waiting to be buried. But maybe if Government can recapitalize it, it kicks off and begins to make some money, then you bring the investors on board. But at least you have given us a different view from everyone else that we have interacted with. But I am also failing to understand why an investor would come on board to invest in a company that is almost dead,” said Masaba.
The Ad hoc Committee was informed that currently, Posta Uganda’s assets are valued at Shs93Bn, although these are being threatened by the numerous debts the Company has accumulated, especially the Shs45Bn court awards that were recently imposed on the company.
Another witness that appeared before the Committee was Dickens Kagarura who expressed desires to manage Posta Uganda if given a chance where he made several proposals on how Posta Uganda can be revamped including making sure the Company returns back to carrying it businesses it did before it was split into smaller sister agencies like Post Bank and Uganda Telecom Limited.
His proposal prompted questions from Faith Nakut (Napak DWR) noting, “You have explained many proposals for diversification of the business including commerce, logistics and financial services. Post Bank exists, that is why the unbundling happened. If you became the Managing Director, would you bring back all the services that were given to other sister agencies? Do you want Posta Uganda to do every business that exists in Uganda?”
Masaba asked Kakagwa to clarify if Government has failed to run Posta Uganda and this would be reason enough to bring in private investors to help revive the ailing Company.
He asked, “In your view, do you think Government has failed to run Posta Uganda? Maybe it is time we looked at having a PPP or privatizing it or Government selling its share or looking for an investor out there to come and run it because so far, one of the things that have come up is how Government can inject money and recapitalize Posta Uganda. Do you think this is the way to go? Government has injected in money year in year out, but still they are doing quite badly, do you think if we solicited for investors out there, this will help the company perform better?”
Kagarura replied, “I think Government hasn’t failed, but it is the management that has failed, because if the Management has realized that there are certain things that aren’t going well, have they brought it to the attention of Government? And has Government refused? So I don’t think it is Government that has failed, it is the team that has failed because if you have suggestions, you go and put it before Government and say, this is what we have. You empower us and we shall do it. So, have they done that?”
Although he also backed the proposal to have Posta Uganda managed through a Public-Private Partnership, he noted that before the revamp is done, there will be need to put in place a strategic plan whose implementation should be informed by a market survey in order to ensure that whatever Posta Uganda is planning, it is able to be delivered.
