As the Uganda government spends billions of shillings in campaigns to bring more foreign investors to the country, some of those here are crying of foul play by making a raft of allegations against the top managers of the Uganda Investment Authority (UIA), the lead agency responsible for investments.
In August, government on the advice of UIA Board cancelled several leases it had granted to both local and foreign investors in Namanve Industrial Park, and immediately announced it was repossessing the plots lying idle.
The UIA board had held meetings on February 20, 2017 and March 30, 2017 in which they agreed to withdraw the leases, despite investors’ pleas that UIA extends them. The investors, according to the lease terms, were supposed to develop their plots measuring 58.48 acres in total, within five years.
However, sources say that having repossessed the said land, UIA has since embarked on the process of giving it to new investors who, according to government, have money but no land for their projects.
A source told EagleOnline that some of the companies whose leases were cancelled by UIA are stuck with loans they had acquired from commercial banks to start developing their plots.
“Before UIA finally canceled leases, there had been prolonged negotiations between UIA and the affected investors to have their licences renewed but UIA was thinking otherwise,” the source said.
He said that some of the top managers at UIA wanted financial rewards from investors before they could renew their leases, even as the latter had given ‘credible reasons’ as to why they delayed projects. “Some people at UIA wanted ‘kick backs’ though they were not straight forward with the investors. Had some of the affected investors given money to the officials, their leases would have been renewed,” he told EagleOnline Thursday.
The investment and privatisation state minister, Evelyne Anite, when asked Thursday by this reporter as to whether she was aware of the investors’ grievances, briefly took time to respond but later said she has never received any complaints related to corruption at UIA.
“We have put an anti-corruption hotline at UIA and investors should use it when a public official asks for bribes from them,” she said.
She said government remains is committed to fighting corrupt public officials, especially those who frustrate investors.
Some of the investors say much as UIA okayed their ejection from the plots, the regulatory agency had failed to construct access roads, water systems and electricity on some plots, which they say was worsened by a poor drainage system because the area is in the swamp.
“How do you start developing a plot when there is no water on it, no road leading to it,” a disgruntled investor who said he was weighing other options in the EAC region, said.
In August, minister Anite said government had provided water, electricity, roads and other incentives to the industrial park and saw no reason to renew leases of investors who had failed to develop the land as agreed with government. At the time she said 200 other investors were waiting to be given the plots, and added that government wants investors who can provide 200,000 jobs in the industrial park.
Also, according to minister Anite, government is in the process of tarmacking the roads within the park under a proposed Shs500 billion infrastructure project, which factors in well with the affected investors’ claims that some plots had no access.
Meanwhile, another source, speaking on condition of anonymity, said that much as close the cancellation of the leases is said to have been a presidential directive aimed at kicking out ‘speculative investors’, it was ill-advised. “No one has enough capital available all the time. Some people were negotiating loans with the banks before they could begin real work, but UIA could not listen to such,” he said.
Gov’t refusal to guarantee investor loans
In a related development, a top manager at UIA told EagleOnline on phone Friday that that some investors had failed to raise cash for investment on the plots and instead wanted government to guarantee their loans by writing ‘letters of no objection’. This, he said, was unfair to government since the investors at first assured government they had the money to put up industrial plants.
“Government could not guarantee some of the loans because banks could come for government land in case investors failed to pay,” he said, adding that discussions are ongoing to help some of the investors get back land.
The official who spoke via phone on condition of anonymity refuted allegations that UIA officials wanted bribes before they could renew some leases.
“Some investors come in the country with a negative mind, thinking Ugandan officials can be bribed. If indeed we asked for bribes, they should have raised the issue with the police,” he said, emphasising that the investors failed to meet their contractual obligations.
The back and forth engagement comes in the wake of Minister Anite saying in August that the President Yoweri Museveni had given waiver instructions on the US$8,000 premium UIA had levied on the investors to fast-track investments. This, the UIA official said, was an opportunity missed by some investors.
In August Hamza Galiwango, the director of land development at UIA , said 180 land titles given to investors free of charge would be reclaimed in six months if the latter fail to develop them as agreed with government.
At the time Galiwango said there were 85 plots under construction, while 130 repossessed plots were reallocated to new investors by government.