Prime
Govt should buy Simba Group debt
Elizabeth Royal Apartments in Kololo, Kampala, is another of Mr Bitature’s properties that Vantage Mezzanine Fund II partnership is seeking to auction.
What you need to know:
- The principles of political economy must be brought to bear.
The entrepreneurs journey to build businesses is fraught with many setbacks. The Simba Group and its chairman Patrick Bitature now find themselves in one such.
Lest we forget, it is entrepreneurs who create jobs in the economy, they bring services that would not be available and pay taxes that make governments function. Simba Group has done all these in Uganda for the past three decades. The company has also built assets worth over $150 million.
However, the accumulated debt of more than $30 million now threatens its existence. The government of Uganda should not allow the Simba Group to sink. It’s bad for the economy, especially indigenous ownership of Uganda’s economy, not to rescue Simba Group. Responsible governments and functional economic systems all have mechanisms in place to rescue economies and entrepreneurs in distress.
In 1990, Mr Donald Trump (former US president) owed banks in America $900million. The US banking and economic system did not destroy Mr Trump by seizing his properties and throwing him in jail - instead the loan was rescheduled under a realistic arrangement.
By 2000, Mr Trump was out of debt and as we all know, went on to become the 45th President of the United States. When it was clear in 2009 that the American economy was on the verge of collapse, President Barack Obama and the United States Congress authorised a rescue package worth $831 billion. It saved the American economy and thousands of jobs.
The Obama administration first focused on rescuing the economy. The administration did not go first after the white collar crooks who had meddled with the US economy.Back home, in spite of Mr Bitature’s mistakes, it is pertinent that the government by executive action considers to rescue Simba Group.
This is possible by buying out Simba Group debt and putting the productive assets of the company, such as hotels, under trusteeship management, until the company settles its indebtedness to the government. Such action will save jobs in the economy and help retain the little indigenous ownership of the local economy.
Actually, beyond Bitature, what is on trial is Uganda’s economic system and its capacity to address economic contradictions at a national level. These cannot be addressed by mercantile reasoning. Rather, the principles of political economy must be brought to bear.
Joe Nam, [email protected]
