Perennial corruption, Museveni’s family behind Uganda Airlines' dismal performance, not Covid 19

Uganda airlines is managed as a Museveni family affair

About two years ago, Uganda Airlines resurrected its commercial flights in the East African region in what was hoped to be a revival of the older Uganda Airlines which operated from 1977 until 2001. After nearly 18 years of Uganda having no national carrier, Uganda Airlines began flying in August 2019.

In January that year, Ugandan President Yoweri Museveni intervened in a saga after the launch date of what he called "a new baby" was delayed because there were issues. He championed the revamped airlines as a symbol of national pride.

At the time, the Permanent Secretary in the country's Ministry of Works and Transport, Waiswa Bageya, said the revival of Uganda Airlines was in the National Resistance Movement - the ruling party in Uganda - manifesto and national development plan.

Today, Museveni's baby has turned in a $27.4 million post-tax loss for its most recent financial year. John Muwanga, the country's auditor general last week revealed the situation in a report to parliament on the financial performance of a dozen state enterprises.

The airlines has seen losses sharply expand since it was revived, according to the report which highlights the airlines’ performance in the last two years. The report indicates that the national carrier posted a sharp rise in losses in the last two financial years and was unable to realise its planned revenue, yet the expenditure on operations was way above projected costs.

"The company only realised $ 9.9m (10.8 per cent) of the project revenue of $92.8m,” Muwanga's report indicated. As reported, Uganda Airlines incurred expenses that were beyond planned costs and actual revenue with at least $29.2m spent on direct costs while $3.6m was spent on indirect costs.

It accumulated deficits during the 2018/19 financial year, which points to a risk of its inability to meet future obligations or investments. Government officials, however, are more inclined to blame Uganda Airlines’ dismal performance entirely on the Covid-19 pandemic, which is a lie.

Last week, Bageya told the Daily Monitor newspaper that the government was optimistic that the airlines will still break even within set timelines if all factors remain constant. “Covid-19 is what really affected us. Those planes were packed for a long time and we thought they would be the one to start the business before we start international flights, but if all goes well, we are optimistic that in four or five years, we shall break even,” Begaya said.

But Begaya could not dare mention that the airlines is failing because of a combination of perennial corruption and Museveni's family, since the airlines is simply another mismanaged first family affair.

Last December, Museveni acknowledged his fear of Uganda's corrupt officials, noting that the country invested a lot of money and time in the project. During a ceremony to receive the country's first Airbus aircraft, Museveni said: "I congratulate Ugandans for having your own airlines. And to you the staff, I urge you to stop corruption. Don’t allow corruption in the new airlines. I don’t want to hear a smell of corruption in the new Uganda Airlines."

President Museveni with his family pose for a picture aboard one of their "new baby" flights 

Nonetheless, Uganda Airlines failed to implement its business plan in accordance with planned timelines because the business plan was not annualised and timelines within which planned activities were to be achieved were never specified.

It also performed dismally in using its assets to generate revenue with a score of -16.5 percent, far below the acceptable 5 percent score. The airlines was also found to hold the worst interest cover, an indication that it will find it difficult to service its loans.

The reasons the carrier collapsed in 2001 did not go away. Buying brand new aircraft will not help. Political interference - especially by the first family - abandoning proper procedures and due diligence and accommodating nepotism and cronyism are some of the ills taking the airlines down the drain.