It’s time to cut our losses on many govt projects
What you need to know:
The issue:
Government projects
Our view:
The economics is not working and losses at most of these white elephants will continue to grow.
The International Specialised Hospital Lubowa, Atiak Sugar Works Ltd in Amuru District, Munyonyo Commonwealth Resort and Conference Centre, the list is endless.
Why would a heavily indebted poor country (HIPC) like Uganda continue to throw away tax payers’ shillings on projects that were to derive zero value.
The answers are many. Some people, including State employees and legislators who make these decisions benefit through backdoor deals, government is trapped and can’t get out and so forth. We wish not to speculate.
We, however, implore you our dear reader to reflect on what we think is an important question.
Are these enterprises, and we use enterprises sparingly, drivers of our country’s progress? Is it time to cut our losses?
Isn’t it time Ugandans have a serious conversation on the relevance and benefits of these projects. Are the enterprises in the interest of Ugandans?
Projects like the Uganda Airlines can still be granted the benefit of a doubt but one needs to just look at South Africa and Kenya to know where we are headed. The hope for economic growth and sustained development seems just that. Hope.
We are open to an evidence backed challenge but for now, it is our position that we are not getting value for money as tax payers. There is overwhelming evidence.
The Auditor General (AG) reports are a gold mine of the loss yet we continue to invest.
In the 2021 report, for example, the AG sampled eight investment projects worth Shs191.5b as of June 30, 2020 including Soroti Fruit Factory, Kigezi Highland Tea factory, Kayonza Tea factory, Mabale tea factory, Luweero Fruits Factory, Moroto Cement Factory, Isingiro Fruit Factory and Atiak Sugar Factory.
Only one out of the eight selected projects was dully subjected to the planning process representing 12.5 percent.
As a result of ineffective planning, the AG notes, two projects failed to take off while there was a change of scope, cost and implementation strategy for the other five investment projects.
The economics is not working and losses at most of these white elephants will continue to grow.
Government is expected in the Financial Year 2022/2023 to issue more promissory notes to that Lubowa hospital to a tune of Shs319.5b. No matching works. Nothing.
There is no recovery in sight. Prospects for a turnaround are bleak. The current trends in most of these projects portend more government bailouts and guarantees.
