Profitability Assessment of Uganda’s Public Corporations and State Enterprises

Profitability Assessment of Uganda’s Public Corporations and State Enterprises

The Auditor General of Uganda, Edward Akol, has recently published a report evaluating the financial performance of 20 out of the 41 profit-oriented public corporations and state enterprises. This report, covering the year ending December 2024, reveals that 13 of these entities posted profits, thereby highlighting their ability to generate revenue and remit dividends to the government.

The assessment underscores the importance of these entities in contributing to the national economy. The profitable entities demonstrate effective management and operational efficiency, which are crucial for their sustainability and growth. The report also provides insights into the challenges faced by the loss-making entities, emphasising the need for improved governance and strategic interventions to enhance their financial performance.

The Auditor General’s report provides a valuable tool for policymakers and stakeholders, offering insights into profitability trends and informing decisions regarding the allocation of resources and the management of public corporations and state enterprises. The findings of this report are expected to drive efforts towards enhancing the efficiency and profitability of these entities, ultimately contributing to the overall economic development of Uganda.

The assessment not only highlights the successes but also draws attention to the areas that require improvement, ensuring that public funds are utilized effectively and efficiently for the benefit of the nation.

Top-Performing Public Corporations and State Enterprises in Uganda

The Auditor General of Uganda, Edward Akol, has recently published a report that examines the financial performance of various public corporations and state enterprises. Among the 20 profit-oriented entities assessed, several have demonstrated exceptional profitability, contributing significantly to the national economy. The following entities have been identified as the top-performing ones:

1. Uganda Electricity Transmission Company Limited (UETCL):
   • UETCL was the top-performing entity, generating profits amounting to UGX 82.25 billion. This outcome serves to emphasise the efficacy of the company’s managerial practices and operational efficiency within the electricity transmission sector.
2. Uganda Electricity Generation Company Limited (UEGCL):
   • UEGCL has been identified as a leading entity in the electricity generation industry, with a profit of UGX 54.28 billion. The company’s capacity to generate significant revenue underscores its strategic importance within Uganda’s energy sector.
3. Uganda Civil Aviation Authority (UCAA):
   • UCAA reported profits of UGX 32 billion, reflecting its strong financial performance in the aviation sector. The aforementioned profitability is indicative of effective governance and operational excellence.
4. Mandela National Stadium:
   • The stadium recorded a profit of UGX 18.66 billion. This outcome is indicative of the stadium’s effective management and its role as a pivotal venue for sporting events and occasions in Uganda.
5. National Enterprise Corporation (NEC) Luwero Industries Limited:
   • NEC Luwero Industries Limited has reported profits amounting to UGX 10.65 billion. This substantial financial gain underscores the company’s considerable impact on Uganda’s industrial sector.
6. NEC Construction Works and Engineering Limited:
   • The entity in question reported profits of UGX 5.46 billion, thus demonstrating its strong performance in the construction and engineering industry.
7. NEC AGRO SMC Limited:
   • NEC AGRO SMC Limited has reported a profit of UGX 4.34 billion, indicating a prosperous period of operations within the agricultural sector.
8. Insurance Training College:
   • The institution’s financial performance, evidenced by its profits amounting to UGX 1.824 billion, is indicative of its effective management and noteworthy contribution to the insurance sector.
9. Uganda Printing and Publishing Corporation (UPPC):
   • UPPC, which had previously incurred losses, reported profits amounting to UGX 1.04 billion in the most recent period, thereby signifying a turnaround and enhanced financial performance.
10. Nile Hotel International Limited:
    • The hotel reported profits amounting to UGX 1.02 billion, indicating its successful management and operations in the hospitality sector.
11. Uganda Property Holdings Limited:
    • This entity realised a profit of UGX 638 million, indicative of its effective management in the property sector.
12. NEC Uzima Limited:
    • NEC Uzima Limited has been revealed to have made a profit of 520 million Ugandan shillings, thus demonstrating its role in contributing to the industrial sector of Uganda.

It is evident that these top-performing entities exemplify the considerable revenue-generating and national economic contribution potential of public corporations and state enterprises. Their documented success stories are widely regarded as exemplars, inspiring other entities to aspire towards enhanced financial performance and operational efficiency.

• Loss-Making Public Corporations and State Enterprises in Uganda

  The Auditor General of Uganda, Edward Akol, has recently published a report that examines the financial performance of various public corporations and state enterprises. While certain entities have exhibited exceptional profitability, others have reported substantial losses, giving rise to concerns regarding their governance and efficiency.

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• The following entities have been identified as experiencing substantial losses:
  1. Kilembe Mines Limited:
     • Kilembe Mines Limited has reported a substantial increase in losses, from UGX 2.39 billion in the previous year to UGX 21.35 billion in the financial year 2023/24. This substantial rise in losses underscores the challenges faced by the company in its operations.
  2. Uganda Electricity Distribution Company Limited (UEDCL):
     • The financial losses sustained by UEDCL escalated from UGX 2.18 billion to UGX 10.92 billion. The company’s financial performance indicates the need for strategic interventions to improve its efficiency and reduce losses.
  3. Uganda Railways Corporation (URC):
     • URC reported losses amounting to UGX 36.34 billion, representing an increase from UGX 35.6 billion in the previous year. These losses, which have persisted, underscore the challenges faced by the corporation in maintaining and operating the railway infrastructure.
  4. National Enterprise Corporation (NEC) Farm Katonga Limited:
     • NEC Farm Katonga Limited experienced a substantial increase in losses, rising from UGX 70 million to UGX 1.9 billion. This substantial increase in losses underscores the necessity for enhanced management and operational strategies..
  5. Uganda National Oil Company (UNOC):
     • Despite ongoing losses, UNOC demonstrated a 78.4% reduction in deficits, from UGX 17.5 billion to UGX 3.78 billion. This decline signifies enhanced revenue generation and effective cost management.
  6. Uganda Airlines:
     • Furthermore, Uganda Airlines succeeded in reducing its losses by 26.5%, from UGX 324.9 billion in 2023 to UGX 237.85 billion in 2024. This decline in losses indicates enhanced financial management and operational efficiency.
  7. Uganda Air Cargo Corporation:
     • The corporation succeeded in reducing its losses from UGX 10 billion in 2023 to UGX 8.21 billion in 2024. This improvement is indicative of the entity’s efforts to enhance its financial performance.

  The findings of the Auditor General’s report raise critical questions regarding the governance and efficiency of these loss-making entities. The ongoing losses continue to deplete public funds, emphasising the necessity for strategic interventions and enhanced management practices to optimise their financial performance. It is imperative to address these challenges to ensure the sustainability and effectiveness of Uganda’s public corporations and state enterprises.

  Improved Performance Despite Losses in Uganda’s Public Corporations and State Enterprises

  The Auditor General of Uganda, Edward Akol, has recently published a report that examines the financial performance of various public corporations and state enterprises. While some entities have reported significant losses, there have been notable improvements in the financial performance of others, indicating effective cost management and revenue generation strategies. The following section outlines the key entities that have demonstrated enhanced performance despite incurring losses:

  1. Uganda National Oil Company (UNOC):
     • UNOC succeeded in reducing its losses by a substantial margin, with a 78.4% decrease from UGX 17.5 billion to UGX 3.78 billion. This substantial decline signifies enhanced revenue generation and effective cost management within the organisation.
  2. Uganda Airlines:
     • Furthermore, Uganda Airlines exhibited enhanced financial performance, evidenced by a 26.5% reduction in losses, from UGX 324.9 billion in 2023 to UGX 237.85 billion in 2024. This decline in losses indicates enhanced financial management and operational efficiency.
  3. Uganda Air Cargo Corporation:
     • The corporation succeeded in reducing its losses from UGX 10 billion in 2023 to UGX 8.21 billion in 2024. This improvement suggests that the entity has been implementing strategic interventions to enhance its financial performance.

  Despite the continued incurring of losses by these entities, the observed improvements underscore the viability of recovery and growth prospects. The reduction in losses is a positive indication that these entities are on the right track to achieving financial stability. It is imperative to acknowledge the significance of ongoing endeavours to enhance revenue generation and cost management in ensuring the sustainability and efficacy of Uganda’s public corporations and state enterprises.

  

  The findings of the Auditor General’s report underscore the necessity of ongoing strategic interventions and effective governance to further enhance the financial performance of these entities. Addressing these challenges and leveraging the gains made will enable Uganda’s public corporations and state enterprises to make substantial contributions to the national economy and ensure the efficient utilisation of public funds.

  Conclusion and Way Forward

  In conclusion, the presentation of the Annual Audit Report by the Auditor General represents a significant step towards enhancing accountability and governance in Uganda. The comprehensive nature of the report provides a solid foundation for the Public Accounts Committees to carry out their oversight responsibilities effectively. It is imperative for the Government to act on the findings and recommendations to ensure the efficient and transparent management of public resources.

  The Auditor General’s report on the profitability trends among Uganda’s public corporations and state enterprises provides a comprehensive overview of their financial performance. While certain entities have exhibited remarkable profitability, others have encountered substantial challenges, resulting in significant financial setbacks. The report underscores the significance of effective management, operational efficiency, and strategic interventions to enhance the financial performance of these entities.

  

  The report’s findings underscore the necessity for sustained efforts to enhance governance and resource allocation within Uganda’s public corporations and state enterprises. By addressing the challenges faced by loss-making entities and building on the successes of profitable ones, these organizations can contribute significantly to the national economy and ensure the efficient utilisation of public funds.

  In the future, it is vital for policymakers and stakeholders to implement strategic interventions aimed at enhancing the financial stability and sustainability of these entities. This should include the improvement of revenue generation, cost management, and operational efficiency. Furthermore, cultivating a culture of transparency and accountability within these organisations is imperative for ensuring their long-term success.The insights provided in the Auditor General’s report can serve as a valuable resource for Uganda’s public corporations and state enterprises as they strive to achieve their financial and operational objectives, thereby contributing to the nation’s broader economic development agenda.

  Uganda Fanatic