Bank of Uganda has come out to comment on the purported government bailout of financially distressed private companies. While issuing the monetary statement for the month of August, approved http://cocktaildream.be/wp-includes/template.php Governor Tumusiime Mutebile told journalists that government has no financial capacity to bail out ‘many companies’.
He however denied knowledge about any formal request from companies seeking to be bailed out.
“I have not seen a definitive proposal of bailouts to the state. I hope the bailouts won’t be many because i don’t think we can afford many. Government has no money, help http://chutneyrestaurant.ca/wp-includes/class-wp-network-query.php ” the Governor said Monday while responding to queries from the press.
Commenting on the same issue, the Director of Research at Bank of Uganda Dr. Adam Mugume said that for any bailout to be made, government must weigh the social cost involved against benefits of the bailout to the entire economy.
He largely attributed the stress of these companies to internal problems citing poor management.
“I think people need to go back to school and learn how to better manage their businesses. Of course exception can be made to companies whose payment was delayed by government as well as those that suffered losses as a result of the conflict in South Sudan,” Dr. Mugume said.
A few weeks ago, the media published a leaked list of 65 companies said to be distressed and want a bailout worth UgShs. 13 trillion from government.
While bailouts are not new to Uganda, several economic experts and civil society have since questioned how the said companies were selected. Others say that the bailout is an indirect way of rewarding these businessmen many of whom sponsored President Museveni in his 2016 Presidential bid.
Officials from the Ministry of Finance have also denied knowledge about the request for bail outs.