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To bail-out Ugandan companies or not?


Should struggling Ugandan businesses be bailed out by government?

Government plans to fork out about Shs1trillion from the public purse to pay off the loans owed to commercial banks and save private businesses, whose assets some banks have already started putting under receivership.

Basing on some of the potential beneficiaries, proponents are hailing the bail out as a pragmatic move to save the economy. Critics meanwhile see it as a form of money laundering – with government cronies helping themselves to public resources.

Proponents appear to be mainly the Who-is-Who in Uganda’s business community and politicians, while opponents appear to be technocrats in Ministry of Finance, policy makers, and regulators.

Those for the bailout, argue that the problems afflicting the companies are not as a result of their internal management problems but as a result of external problems. Amongst these, they cite interest rate escalation, for which they say they say the central bank is partly to blame.

What do you make of it all?



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