 Industry |
"Access
to capital for investment", says Mr. William Muhaire, acting executive director of Uganda Investment Authority, "has been
made easier by the opening of the Uganda Securities Exchange, with dealings in East
African Development Bank bonds and Central Bank Treasury bills".
When the listing takes off on the exchange it is expected that the
Jinja-based Grain Milling Company Ltd, will be the first to be followed by other recently
privatised companies, including the Uganda Commercial Bank. But the government’s most
ambitious project yet is the privatization program which offers very attractive
opportunities for private entrepreneurs. Currently the country’s communication
network is lined up for the biggest sell-off. This is in line with the government's aim of
phasing out all direct and indirect subsidies to state-owned enterprises over the next
four years.
In 1992 about 107 enterprises were state-owned and were heavily
subsidized -US$208m in 1995-5 or 8 % of GDP which was equivalent to five and half times
recurrent spending on health and twice the outlay on education.
"Misgivings about privatization have given way to support"
says Michael Opagi of the privatization directorate, "thanks to the demonstration
effect - the public are seeing the benefits, greater productivity, and greater
efficiency."
So far the government has divested either all or a majority of its
shares in 72 public enterprises out of 123 slated for full divestiture. By June this year,
it intends either to have divested all its shares or to have relinquished management
control to strategic investors in 95 enterprises. The remainder should be sold off by June
1999. "We have moved assets of more than U.S.$1 billion to private sector" said
Leonard Muganwa, executive director of Enterprise Development Project, which oversees the
program.
| Significantly, the return of the Uganda-Asians have provided a huge
boost to the economy. One such family has returned to engage in the rebuilding of Africans
largest conglomerate. The Madhvanifamily
were among the first to have taken advantage of Museveni governments decision to return
the Asians assets to their owners. When they came back, they rebuilt a conglomerate which
ranges from brewery to sugar factories and tea estates. The family business has since been
expanded by investments in tourism and extended their business activities in neighbooring
countries in Africa. They recently launched their assault in the acquisition of the
largest hotel in Lusaka, Zambia.
In 1972 the Estate produced approximately 85,000
metric tons of sugar but political event forced the management of the Estate to leave the
Group and the production slumped until it came to a complete standstill in 1979. Mayur
Madhvani, executive director, remembers those times as the darkest period in the life of
the Madhvani group. The company currently employs over 7,500 individuals on a permanent
basis and at full development it would employ 9,000 individuals, and as Mayur Madhvani
said "we also care about social development, we provide health assistance, schools
and recreational activity at a modes cost so that our people can learn how to manage their
own budget"
No wonder the phenomenal contribution by the Madhvani Groupto the Ugandan economy no wonder led President Clinton
to visit the group’s facilities at Jinja during his recent trip to the country. |
Introduction
