A recent audit of Uganda's public corporations has unveiled a mixed financial landscape, with some entities thriving while others face mounting losses.
The report, which assesses 20 of the country’s 41 profit-oriented state enterprises, underscores the need for stronger operational strategies and financial management practices across the sector.
The audit reveals that while all public corporations are mandated to either operate commercially or deliver services, profit-oriented entities are specifically expected to generate profits and contribute dividends to the government.
However, the government’s consolidated financial statements are lacking essential performance metrics, such as profitability, return on assets, liquidity, and debt analysis.
To address this gap, the auditor general conducted an independent evaluation based on audited financial statements.
Of the 20 entities analyzed, 13 reported profits or surpluses. Leading the pack were the Uganda Electricity Transmission Company Limited (UETCL), which posted a profit of Shs82.25 billion, followed by the Uganda Electricity Generation Company (UEGCL) with Shs54.28 billion, and the Uganda Civil Aviation Authority with Shs32 billion.
These strong performers contributed positively to government revenue.
On the other hand, several entities showed alarming declines in their financial health. The National Housing and Construction Company Limited saw a dramatic 90.5% drop in profits, from Shs34.59 billion to Shs3.27 billion.
Similarly, the Uganda Railways Corporation, Kilembe Mines Limited, and NEC Farm Katonga Limited reported worsening losses, raising concerns about their long-term viability.
Despite these challenges, some entities managed to reduce their deficits. The Uganda National Oil Company and Uganda National Airlines Company Limited both managed to cut their losses by 78.4% and 26.5%, respectively, signaling improvements in revenue generation and cost management.
The audit report highlights the serious implications of persistent losses, which can hinder an entity’s ability to meet its financial obligations and invest in future growth. Such losses also risk undermining service delivery and overall economic performance.
To address these issues, the auditor general recommends that public corporations adopt clear strategies for improving their operations and financial management practices.
This includes focusing on cost reduction, increasing revenue generation, and, for entities severely impacted by losses, considering recapitalisation through the Ministry of Finance, Planning, and Economic Development (MoFPED) to restore financial stability.
