Where Ugandans have a stake, we need to see those contracts

Makerere University Kampala could be onto something huge. Uganda’s most prominent public institution of learning has decided to convert one of its idle assets into a money-making machine.

According to this week’s New Vision newspaper, Makerere University, together with some private investors, intends to build a hotel, apartments, and a convention centre on roughly 840 acres of its land. The university says the projects will supplement its revenues from the student’s tuition.

It is a refreshing development for an institution that has in the past been dogged by strikes from both the students and the lecturers. From what is publicly known, the National Social Security Fund, Uganda’s biggest financial institution, and a number of Chinese firms have shown interest in investing in Makerere’s projects.

This process has to be supported. If the projects are successful, other institutions could be encouraged to toe the same line and put up commercial projects. Think more jobs created, tax revenues generated. Also, for Makerere, this could ease the pressures from the different fights over money that the university has had to grapple with previously. This could be a new dawn for Makerere University.

A dark regulatory cloud, however, looms over projects such as Makerere University’s business schemes as Uganda grumbles over certain sections of the Public-Private Partnership Bill that is supposed to govern these ventures. The bill is crucial as it would guide investors on how they would be treated if they decided to bring in their capital and partner public institutions.

A number of plans, such as the issuance of an infrastructure bond, which would attract more than $500m into Uganda’s economy, remain on the shelves partly because the country does not have a PPP law in place. A massive housing project on Police land in Nsambya, which is worth $500m, hangs in the balance because a unit to regulate PPPs has not yet been created.

Sometime back, Parliament passed the Public Private Partnership (PPP) Bill, 2012. The act was then sent to President Yoweri Museveni to append his signature. He refused. Apparently, Museveni was not happy that the act required all public-private partnership agreements to seek Parliamentary approval before work started.

Instead, Museveni argued that placing these agreements under the scrutiny of the legislators would take time and thereby hurt investment prospects. The president believes the attorney general should be the right person to either endorse or reject the agreements.

Museveni is right only in as far as the amount of time the Members of Parliament take to debate and pass certain documents. What Museveni did not say is that Uganda’s Parliament is filled with a certain crop of legislators whose grasp of simple tenets of commercial contracts is deplorable. Lest we forget, three thirds of the legislators belong to the ruling party.

Regardless, we have to oppose Museveni and support Parliament in its quest to look at these contracts. There are a few legislators in the house who are brilliant enough to point out loopholes in the contracts that could come back to haunt the country. We need to give these legislators that opportunity to be our watchdogs. But we also have to find ways to make our Parliament do its work and reduce the delays.

History shows Uganda has signed some contracts with private companies that have left the public short-changed. For example, about eight years ago, Uganda entered into a contract with a South African company called Sheltam to build the Uganda Kenya railway line.

As part of its contribution, Uganda guaranteed money to Sheltam. However, it took the country more than a year to discover that they had entered into a terrible deal and that Roy Puffet, the man behind Sheltam, was a journeyman who barely did any work but later walked away with one fat payoff cheque.

There are more of such examples that there is not enough space to exhaust them all. The issue here is that Uganda, where corruption is deeply rooted, needs all avenues to expose any form of cheating.

This week, I was part of 40 journalists and tax campaigners from several countries including Hungary, Pakistan and the DR Congo, who, under the UK’s Bureau of Investigative Journalism, wrote to Jean-Claude Juncker, the European Union’s Commissioner, to ensure Europe introduces public registers of beneficial ownership.

The registers would help countries such as Uganda to know who owned the companies it intends to do business with, and tackle any practice of illicit finance.
The fight in Europe is on. It would be sad if Uganda’s president got his wish to deal with public private partnerships within the closed doors of State House under the sleepy eyes of a lame-duck attorney general.

jeff@observer.ug
Twitter: Jeff_Mbanga

The author is the business editor of The Observer