Museveni reads riot act to officials over UTCL deal

President Museveni has ordered the immediate finalisation of the ROWARD Capital Commercial Broker LLC - Uganda Telecommunications Corporation Limited (UTCL) merger deal by July 14.

In a searing June 24 letter to the ICT minister, Dr Chris Baryomunsi, Mr Museveni expressed shock that “investors who want to rescue UTL have not yet got an agreement from the government”.

“They have now told me that the government is refusing to give support on two factors: the income and staffing levels of the private company that had been made to run our National Backbone without my knowledge and the refusal by the government to assure them of the monopoly of telephone and internet services,” the President wrote.

He added: “The claim by NITA-U (National Information Technology Authority) that information is confidential is wrong if not dishonest. NITA-U allowed somebody to use our National Backbone without my knowledge. What was he doing with the platform? What is he earning? What rent was he paying to NITA-U and why? I demand to know why anybody would have a problem with this.”

Regarding senior officials in the Ministry of ICT and NITA-U declining to grant the merged ROWARD-UTCL company monopoly of government and Internet services, Mr Museveni wondered: “What is the problem with that? Have we not ordered all public servants to use Uganda Airlines?”

“I now give all concerned three weeks from today to conclude this agreement,” the letter, copied to Attorney General Kiryowa Kiwanuka, Finance Minister Matia Kasaija and others, reads in part.

The President’s directive, sources familiar with the discussions told Daily Monitor, is a culmination of his frustration, inside and outside meeting rooms, over a likely attempt by technocrats to scuttle the $225m (Shs830b) capital injection in the new telecom company.

This newspaper detailed in April the length and breadth of discord among technocrats and how the deal had sparked off infighting involving senior officials and brokers with political connections. The fight pitted the NITA-U leadership against their supervisors in the Ministry of ICT.

NITA-U is the statutory body mandated to coordinate government IT services.

Dr Baryomunsi did not answer our repeated calls for comment on the matter. NITA-U officials also declined to respond to our inquiries.

The deal

On December 22, 2023, ROWARD and UTCL signed a joint venture agreement including share subscription and allotment agreements at State House, Entebbe, transferring 60 percent shareholding in UTCL to the former.

Mr Chaher Al Taki signed on behalf of ROWARD while ICT minister, Dr Baryomunsi and Mr Henry Musasizi, the junior Finance minister for Planning, signed on behalf of UTCL.

The transfer of the National Backbone Infrastructure (NBI) to UTCL was among the key terms the government committed to in the December 22 agreement. Other terms included the issuance of a national telecommunications operator licence, negotiation of shareholders and support agreements, and timely modification of the company’s registration at the Uganda Registration Services Bureau (URSB).

These terms are supposed to be completed within three months, ending March 22, to facilitate the ROWARD-UTCL marriage. In turn, ROWARD would invest $25m (Shs92.2b) during the 90-day period, and stagger another $200m (Shs737.8b) over the next three years within the new company domiciled on March 24, 2024.

ROWARD owns a 60 percent stake in the new company, and the ministries of ICT and Finance are co-shareholders in the government’s 40 percent stake.

Seven months later, the NITA-U top leadership, reinforced by top officials in the Ministry of ICT, have been butting heads with ROWARD investors and their lawyers, ABMAK Associates.

The then Auditor General, Mr John Muwanga, was required to conduct a forensic audit of the NBI and e-Government Infrastructure (EGI) before being transferred to ROWARD-UTCL, but sources indicated that has also met roadblocks along the way.

Sources indicated that NITA-U informed the audit team they did not know the NBI reach and needed more time to ascertain the fibre cable’s termination points across the country.