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NSSF Should Have Bought More of Umeme’s Shares [opinion]

The National Social Security Fund (NSSF) has bought shares worth Shs 70bn in, what some naively perceive as the beleaguered, Umeme.

The NSSF now owns 14 per cent of the electricity distribution company. Strangely, a few have not welcomed the decision and the NSSF line ministry made a public announcement dissociating itself with that particular decision! It is incredible!

Two of the contenders for the social fund’s top office are known to me and I am obliged to wish them well, even though I agree with veteran journalist Andrew Mwenda that that office carries a poisoned chalice!

On one of his late-night interviews after NTV news, Mwenda joked that the CEO of NSSF is so constrained he would not be able to buy safety pins!

Seeing that the recruitment of this office-holder is tedious and long drawn out, it seems senseless to leave him so powerless!

Indeed we should be asking very different questions! To begin with, why did NSSF buy only Shs 70 billion worth of Umeme shares? Without a doubt, NSSF is the richest corporate in the country.

If it were to close tomorrow, a few banks would definitely collapse. Could the NSSF have been able to buy all the billions worth of shares that were offered? Yes it could! That is where an enquiry is needed!

A lot of ‘hating’ has also been directed at Andrew Mwenda for saying what is obvious regarding Umeme! Why would one blame Umeme for their contract? Every organisation would love to have such a juicy concession, of course.

Should we then sit back and watch Umeme reap the fruits off their favourable concession? Certainly not! We must demand whatever is promised: more connections, more of the pay-as-you-go Yaka Yaka, bigger, better infrastructure, more investment, fewer losses and better retail service!

Instinctively, Ugandans would love to have their own electricity supply company even though Uganda does not own much. And whatever we own does not work well we own Mulago hospital and others!

Some say that Umeme rushed to sell shares to foreign companies, either fearing or fighting against a poorly-thought-out parliamentary resolution. That should not matter. One should be able to sell what is theirs. Why was Umeme allowed to ring-fence bulk shares for international companies, seeing that they required permission for that? Did the NSSF CEO’s office fail to lobby for the purchasing of all shares because of the alleged weakness?

If NSSF had bought all the shares on offer, Ugandans would have taken a huge slice of ownership of Umeme, and this is what we want! Perhaps this is what the Umeme shareholders wished to avoid – and they succeeded?

Whatever the economic experts may say, Umeme must be a profitable company worthy of shareholding investment. Its general manager is usually in the media reassuring clients that they are making profits, improving infrastructure and paying taxes. Some people believe him because the company was able to shell out shares to the tune of Shs 34bn in just a month’s time!

Incredibly, all these new investors are forking out money for a company with a lifespan of 12 years. Yes, in 12 years’ time, the Umeme concession will expire. Many times in Uganda, we are noisy in the manner of that clicheacute about tins. There is a lot we do not know!

Only about 14 per cent of Ugandans have access to electricity and Umeme has 600,000 metered connections. Over 90 per cent of their clients are domestic customers, but it is the eight per cent industrial customers that provide the bulk of Umeme’s profits.

The NSSF figures are not rosy either! Only about 20,000 companies qualify to subscribe with NSSF – companies with five or more employees. Just over 50 per cent, about 12,000 companies, actually pay. The detail is even more worrying: of the 1.3 million registered workers, only about 400,000 are active!

Here is what we must shout and scream about. Has the investment of $224m reported by Umeme been verified? Another $440m is committed by end of 2018. How will we verify that too? Why is it that only 14 per cent of the more than 33 million Ugandans have electricity? When can we get to 50 per cent? Why are there so few companies with five or more employees?

Twelve years is the time at which children sit for PLE. It is not that long! Have we made plans for post-Umeme in 12 years’ time or should we plan to moan about their next contract?

The author is one of the founding Kigo thinkers.

Source : The Observer

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