By Magezi Kiriinjju
According to the chairperson of the Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE), Hon. Joel Ssenyonyi, Uganda Airlines made a financial loss of Shs102bn in the first year of
operations 2020, another loss of Shs164 billion in 2021 and a further loss of Shs232 billion this year.
Granted, COSASE’s work is to examine reports and audited accounts of statutory authorities, corporations and public enterprises and ascertain if their operations are being managed competently. Therefore, nobody is against them probing Uganda airline considering the astronomical loses they are incurring.
But the manner in which COSASE is conducting their investigations into the airline’s profitability or lack of it is akin to torture at best and mob justice at worst.
The only difference is that victims come out alive without visible physical wounds and scars.
We all know that evidence collected through torture is inadmissible in court and mob justice is a crime. I would not be surprised if someone petitioned Uganda Human Rights Commission over torture from COSASE dungeons by overzealous members of parliament.
In fact, as far as Ugandans are concerned, the outcomes and recommendations that may come out of this probe are no longer necessary, COSASE has already corrupted the process by sensationalising their initial findings which have not been proven to be the main cause of the poor performance.
This obnoxious approach by the committee may raise their political status in the constituency
but dents their credibility and denies the public the ability to comprehend the real issues at the airline.
The probing methodology is poorly structured, it’s as if the media is the client not the public hence the tendency for sensationalism.
Even if COSASE knew in advance about the lack of qualifications by some of the top managers, they
should have kept this anomaly to their chests as they dig deep into the crux of the problem causing the financial bleeding.
The feasibility study shows that Uganda Airlines would make loses for around seven years after commencement of operations due to stiff competition from top global players like Emirates, British Airways, Turkish and Qatar airways.
On the African continent, giants like Ethiopian Airlines and Kenya Airways rule the skies as well.
Coupled with the outbreak of covid19 pandemic at exact start of operations, the airline was bound to struggle before breaking even.
Without maligning the airline, COSASE should first inform Ugandans that the carrier was never meant to make profits for some years after launch and covid19 pandemic may have elongated the period.
The public should also know how much money was expected to be lost annually during this period and lastly, that the probe is not about losing money since it’s expected anyway but how much is being lost per year but also that the probe is doing a comparison between the forecasted losses and the actual loses in the last three years of operations.
That means, if the annual forecasted loses are higher than the actual losses being incurred, the airline is
doing well.
All we need is to keep lowering the losses as we push for a breakeven point. But if the actual losses being incurred now are higher than the forecasted losses, then a basis for investigation is established.
As of now, we don’t even know what they are probing. I assume that the first step into a business investigation by an external auditor is not the qualifications of the company accountant but the balance sheet that gives an eagle’s eye into the operations of the entity.
COSASE should first reconcile the balance sheet against two major functions; management and operations. These two components define the success or failure of an organisation and Uganda airlines, being in a delicate and competitive service sector, relies heavily on them.
When paired with cash flow and income statements, balance sheets will provide a clear picture of where the financial hemorrhaging is emanating from.
If the problem is caused by the poor management, then issues of staff qualifications come up very fast.
COSASE can then tell the public about which poor decisions top managers made without appearing to trivialise the findings.
And if the losses are emanating from operations, the committee, with a strong aim of helping the airline can then scrutinize areas like procurement and bidding processes, ground handling services, payments to contractors and
airport parking and loading fees.
All this information can inform both management and parliament on the way forward to minimising losses and
eventually breaking even.
COSASE should also be probing without excitement the fact that Uganda airlines was started to be leveraged by other sectors like tourism and conferencing, exports promotion and transforming Entebbe into an
international metropolis.
Ascertain if these sectors are faring as expected, meaning the airline is delivering on its feasibility study promise by growing them and offsetting its own losses in the process.
And of course COSASE should probe the recruitment and qualifications of the staff.
But if Uganda airlines is found to be performing as envisaged in the concept note, I mean its losing money as expected, empowering other sectors as envisioned and employing Ugandans, but its chief executive officer is not a degree holder as provided in law, then recommend reforms in the law so that able managers are not lost on education technicalities.
Unless the committee is saying its ok to lose money as long as the CEO is a London School of Economics graduate.
My advice to the committee is that first ascertain the real source of the financial hemorrhaging before coming to the media, if it’s due to operations, help management to control costs without compromising standards.
This may entail salary reviews for some staffs and procuring affordable contractors.
But if the source is at management decision making level, then staff qualifications should be scrutinized without appearing to witch-hunt them.
Magezi Kiriinjju
Government Citizen Interaction Centre,
Member of Campfire Ideological Study Group.