Published on 14/10/2024
The Public Accounts Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) has raised concerns about the increasing competition Uganda Posta Limited (Posta Uganda) faces from unlicensed courier companies. This competition is impacting Posta Uganda’s revenue and market share. COSASE is calling for stricter regulatory enforcement to address the issue.
These concerns were raised during debate on the Committee Report on the Report of the Auditor General on the Financial Statements of Uganda Posta Limited for the Financial Year ended 30th June 2023 during the House sitting on Monday, 14 October 2024.
The report was presented by Committee Deputy Chairperson, Hon. Allan Mayanja. The House adopted the report with amendments.
Mayanja highlighted that unlicensed operators now dominate 60 percent of the country’s courier business, according to data from the Uganda Communications Commission (UCC).
“The rise of unlicensed courier companies is not only causing a loss of tax revenue for the government but is also squeezing out legitimate operators like Posta Uganda,” Mayanja, also the Nakaseke Central County MP, said.
In the last fiscal year, according to the report, Posta Uganda’s sales revenue fell by 6.29 percent, with significant drops in key services such as bag rentals (down by 64 percent) and post shop sales (down by 68 percent).
Mayanja emphasised the urgent need for stronger regulatory enforcement to curb the impact of these unlicensed operators. He called for the UCC to take stricter action to ensure a level playing field for Posta Uganda.
In addition to regulatory challenges, the report underscored the financial difficulties facing Posta Uganda. The company has seen a 22.31 percent increase in its reliance on an overdraft facility, despite a small rise in after-tax profit from Shs0.179 billion to Shs0.397 billion.
“Posta Uganda is facing severe liquidity challenges, and without capital injection, it will struggle to meet its financial obligations,” Mayanja warned.
Various MPs voiced their concerns over the state of Posta Uganda during the debate.
Hon. Christine Kaaya (NUP, Kiboga District Woman Representative) criticised the use of the COVID-19 pandemic as an excuse for the poor financial performance, pointing out that the year immediately after the pandemic saw better results.
Hon. Faith Nakut (NRM, Napak District Woman Representative) expressed concerns about mismanagement at Posta Uganda, saying, “Posta Uganda needs re-engineering and a change of vision.”
Hon. Jonathan Ebwalu (Indep., Soroti Division West) called for a government commitment on when retirees of Posta Uganda would be paid, noting that their liability amounts to Shs11.673 billion, verified by the Auditor General for 373 claimants.
The committee recommended that this amount be paid within six months of the report’s adoption.
Hon. Mathias Mpuuga (NUP, Nyendo-Mukungwe Division) reiterated that the management crisis at Posta Uganda needs urgent resolution and urged against simply dissolving the agency.
“These agencies serve a purpose, including providing employment. The solution lies in improving management,” he said.
Hon. Frank Kabuye (NUP, Kassanda County South) also stressed the need for deeper investigations into Posta Uganda, reiterating the call for a forensic audit to get to the root of the management problems that have plagued the company.
Read Also: Posta Uganda Calls For Urgent UGX 5.5 Billion Revamp
The Leader of the Opposition, Hon. Joel Ssenyonyi, described Posta Uganda’s issues as a management problem. He pointed out that the company faces payables of Shs20.4 billion, court awards totalling Shs45 billion, and payroll liabilities of Shs3.2 billion.
“How can you expect Posta Uganda to deliver when its staff are not even being paid?” Ssenyonyi said.
Speaker, Anita Among, sought clarification on the state of Posta Uganda’s receivables and payables.
“Where are these receivables coming from, and why have they not been claimed?” she asked.
She agreed with the proposal that the board reassess its strategy, and resolved to set up an ad-hoc committee to scrutinise Posta Uganda in-depth.
The committee will be chaired by Hon. Faith Nakut, with Hon. Moses Aleper (NRM, Chekwii County), Hon. Herbert Tayebwa (NRM, Kashongi County), Hon. Xavier Kyooma (NRM, Ibanda County North), Hon. Elijah Mushemeza (Indep., Sheema County South), and Hon. Karim Masaba (Indep., Industrial Division, Mbale City) as members.
“I need an in-depth scrutiny of this institution so that we can hold the shareholders and the Minister accountable,” said Among.
The ad-hoc committee is expected to carry out a thorough review of Posta Uganda’s operations, with its findings likely to inform future decisions about the company’s governance and financial recovery.
Read Also: Posta Uganda Calls For Urgent UGX 5.5 Billion Revamp
