Published on 12/06/2024
Posta Uganda Limited has urged the Ministry of Finance to fulfil its Shillings 5.5 billion share capital requirement to facilitate a comprehensive overhaul aimed at enhancing services across Uganda, particularly in rural areas where the institution faces financial strain.
James Arinaitwe, Managing Director of Posta Uganda, emphasized the necessity of government support during an interview following discussions with Members of Parliament on the Committee of Commissions, Statutory Authorities, and State Enterprises (COSASE). Contrary to public perception that technological advancements have made postal services obsolete, Arinaitwe asserted that digitization has sustained operations but highlighted the urgent need for financial backing to ensure sustainable service delivery.
“Posta Uganda struggles to generate adequate revenue to fund operations. Although we projected a budget of Shs20 billion this year, we managed only Shs15 billion. Postal services are essential nationwide, and every community must have access,” explained Arinaitwe.
He justified the call for a Shs5 billion bailout, citing the operational challenges faced in rural areas where revenues often fall short of costs. “For instance, our Kanungu post office, employing two staff members, earns only Shillings 80,000 monthly against expenses of Shillings 3 million, resulting in significant monthly losses. This scenario is replicated in stations like Koboko and Yumbe,” Arinaitwe elaborated.
In the absence of the Shillings 5.5 billion revamp funding, Arinaitwe proposed tapping into the Rural Communication Fund managed by the Uganda Communications Commission to subsidize operations in financially nonviable areas.
During the COSASE session, concerns were raised about salary delays at Posta Uganda, with MPs referencing the Auditor General’s report for December 2023, which highlighted Shillings 5.2 billion allocated for wages over four years that remained unutilized. Responding to queries about unpaid wages, Arinaitwe acknowledged challenges in meeting payroll demands due to budget constraints and revenue shortfalls.
“The budget of Posta Uganda operates differently from government budgets. It is a dynamic plan requiring actual revenue for execution. In the fiscal year 2022/2023, payroll expenditure was projected at Shillings 7.2 billion, but we could only disburse Shillings 5.6 billion due to revenue limitations,” Arinaitwe clarified.
In addressing concerns about unspent funds, Arinaitwe assured transparency in financial management, despite challenges in aligning expenditures with projections amid fluctuating revenues.
Posta Uganda’s appeal for the revamp underscores its commitment to modernizing and expanding postal services nationwide, particularly in underserved rural communities. The Ministry of Finance’s response will be crucial in determining the institution’s ability to sustainably deliver essential communication services across Uganda.
Working through over 300 Post Offices, with active mail boxes that exceed 70,000 in over 30 major cities and towns, Posta Uganda offers a host of auxiliary services, including; express courier services, local and international money transfers, internet services, public bus transport, distribution of magazines and newspapers among others.
