300 Billion to ROKO Over Ambulances? — Analyzing the Decision

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(Adopted from Anthony Natif)

As Ugandans, we collectively share the concerns articulated by Dr. Ayume Charles. The government’s recent actions seem to embrace a reverse privatization policy that channels public resources into private entities without a transparent framework. This strategy appears to prioritize such “investments” over essential public goods like healthcare.

Background

On July 20, 2022, the Minister of State for Finance (General Duties), Hon. Henry Musasizi, introduced a motion for the government to purchase shares in ROKO Construction Ltd, a company with a 54-year history in Uganda, notably known for constructing the iconic Martyrs’ Shrine in Namugongo. The government aimed to acquire 150,000 preferential shares to provide financial support to ROKO, enabling the company to complete stalled government projects due to liquidity constraints.

However, it remains unclear why the government didn’t resolve this liquidity issue by pre-paying on these contracts or settling ROKO’s outstanding invoices. The Minister failed to present a clear valuation report, draft purchase agreement, exit strategy, or roadmap for potential public benefit if ROKO’s shares were to be floated. He simply stated that this “time-bound intervention” would end in five years, with the company repaying the government.

Despite the lack of detailed justification, the proposal faced little opposition, largely because Deputy Speaker Thomas Tayebwa expedited its passage, disregarding public opinion. Even when Hon. Thomas Tayebwa called for a vote, an objective observer might have concluded that the nays had it, yet the proposal still passed.

Counter Proposals and Concerns

Shadow Finance Minister Hon. Muwanga Kivumbi presented counter-proposals, highlighting ROKO’s 27 lawsuits in the commercial court and advising the government to seek a controlling stake. He also reminded the House that ROKO’s majority shareholders are Swiss, not East African, as per the Investment Act. Despite these valid concerns, his arguments fell on deaf ears.

Minister Musasizi acknowledged some potential deal-breakers, such as the company’s weak management structure, but these admissions appeared cosmetic. The government’s decision seemed predetermined.

Then Leader of Opposition, Hon. Mathias Mpuuga, criticized the move as duplicitous, while Hon. Anitah Among, presiding over the debate, suggested the need to support local companies. However, she essentially passed the responsibility to Deputy Speaker Tayebwa, who ensured the proposal’s approval.

The Implications

The government’s decision to bail out a Swiss conglomerate raises questions about prioritizing investments over public health infrastructure. As Ugandans, we now find ourselves debating the logic behind this bailout, especially in light of pressing needs in our healthcare system.

In summary, the move to allocate 300 billion to ROKO Construction Ltd, without adequate transparency and justification, exemplifies a troubling trend. The government’s decision to prioritize a foreign private entity over critical public services underscores the ongoing challenges faced by Ugandan taxpayers.

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