Business

Kasekende: Companies Being Vetted for Potential Bailout

Dr Loius Kasekende addressing journalists at Mbarara University grounds on Friday (Photo: Joshua Nahamya/ChimpReports)

Government is scrutinising private companies seeking a trillion-shilling bailout, more about http://dchnf.dk/wp-content/plugins/woocommerce/includes/class-wc-order-factory.php a senior central bank official has revealed.

Deputy Bank of Uganda governor Dr Louis Kasekende said meetings are underway to establish potential beneficiaries.

“As regulators of the banking industry, drugs http://consumersafetywatch.com/wp-admin/includes/ms-admin-filters.php we shall also sit and follow the right procedures to decide who should get a bailout,” said Kasekende.

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He made the remarks on Friday during celebrations marking the central bank’s 50th anniversary in Mbarara town.

Kasekende was responding to Forex Bureau Chief, Philip Katamba who sought an explanation on the widely publicised bailout plan.

“Actually I am pleased with the public which is already discussing this matter and now realises its implications,” said Kasekende.

He further stated that in “unforeseen circumstances like drought, government can come in to bailout strategic companies.”

He, however, maintained that no specific company was recommended for a bailout.

“We don’t know what type of bailouts to give to whom. Let’s wait and be patient,” said the deputy governor.

Government has repeatedly denied reports of a bailout plan, saying only companies which are yet to receive payment for their supplies will be paid.

Government further said Ugandans/firms which supplied foodstuffs to South Sudan would be paid with the understanding that Juba pays back Kampala.

Secret plot

But recent communications by government officials indicate plans are indeed underway to bail out struggling companies.

According to a letter dated June 17, Prime Minister Ruhakana Rugunda requested Finance Minister Matia Kasaija to “facilitate urgent, transparent, bold, and deliberate/cautious action on the agreed measures regarding the restructuring of non-performing loans of distressed businesses.”

He further wrote: “Please note that there is a need (a) to clarify the magnitude of the problem; (b)  identify and prioritise the businesses to target; (c) identify the level of funding required; (d) the potential sources of funding and (e) an acceptable criteria for the potential bailouts.”

Officials say Rugunda’s letter shows government’s intent to bail out companies on the verge of collapse.

The companies attribute their financial woes to high interest rates; an unstable shilling, poor performance of the economy and sidelining of local content in multi-billion-shilling infrastructural projects.

Meanwhile, Kasekende urged private companies to always consider insurance for their businesses instead of waiting for bail outs from government during harsh economic times.

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