Published on 09/07/2024
Lt. Gen. James Mugira, Managing Director of National Enterprise Corporation (NEC), proudly announced that the Army has finally achieved profitability by offsetting a Ugx. 28 billion debt accumulated over eight years.
Addressing the Committee of Commissions, Statutory Authorities, and State Enterprises (COSASE), Mugira shared these insights while responding to the December 2023 Auditor General’s report. This milestone marks a significant turnaround for NEC, reflecting strategic financial management and operational efficiency.

“On a positive note, according to the Auditor General’s 2023 report, four NEC subsidiaries are among the ten government-owned enterprises that made profits during the year under review. As a corporation, over the past 7-8 years, we have managed to reverse and offset an accumulated loss of Shs28 billion. We view this as a significant achievement, and we have started making profits in the last two years,” Mugira stated.
The Auditor General’s report highlighted the financial performance of various NEC subsidiaries. NEC Luwero Industries Limited posted profits of UGX8 billion in 2022/23, up from UGX7.88 billion in 2021/22. Similarly, NEC Construction Works & Engineering Limited recorded profits of UGX5 billion in 2022/23, an increase from UGX4.35 billion in 2021/22. NEC AGRO SMC Limited saw profits rise to UGX4 billion in 2022/23, up from UGX1.64 billion in 2021/22. However, NEC Uzima Limited posted profits of UGX160 million, a decrease from UGX190 million in 2021/22. Despite this drop, Uzima recently secured a lucrative contract to supply water to Parliament, which is expected to boost its profits.
NEC management attributed the profit decline at Uzima to high production costs but noted that they have negotiated for fairer raw material prices for the 2023/2024 fiscal year. Some suppliers have already responded positively, which is expected to reduce production costs.
NEC Farm Katonga Limited, however, continued to incur losses, reporting UGX70 million in losses for 2022/23, though this was an improvement from the UGX250 million loss recorded in 2021/22. The management attributed these losses to animal quarantines and dry spells in the cattle corridor, which impacted cattle sales.
During the session, Lucy Akello, the Amuru District Women Representative inquired if the Army had established business relations with the private sector, highlighting the challenges of relying solely on government partnerships due to payment delays. Mugira responded, “We are dealing with both the government and the private sector. When you see Uzima water in supermarkets, that’s private sector engagement. We are also involved in waste management, which is private. We understand the delays in government payments, but we are patient, and eventually, they pay.”
The Army also took pride in the fact that NEC was one of the few government agencies that had no complaints lodged against it with the Inspectorate of Government, as noted in the bi-annual performance report of the IGG.
NEC was established in 1989 by an Act of Parliament to serve as a commercial arm of the Ministry of Defence to produce goods and services that are beneficial to the Defence Forces and the general public. Its commercial ventures are undertaken through its Subsidiaries and Joint Ventures.