Published on 19/11/2024
Posta Uganda’s license to handle mail and deposits expired in 2021, revealing UGX 1.7 billion in unpaid fees dating back to 2017, Uganda Communications Commission (UCC) disclosed.
Abudu Sallam Waiswa, UCC’s Head of Legal Affairs, informed the Parliamentary Ad Hoc Committee that the company faces severe financial distress. He emphasized the urgency of a government bailout to rescue the nation’s postal service from collapse.
Posta Uganda, once a cornerstone of communication, now struggles to stay afloat amid mounting debts and regulatory non-compliance. The committee must weigh salvaging a critical public service against concerns of mismanagement.
“We are embarrassed to say their license expired in 2021, and we have continuously asked them to renew it. Despite their challenges, they cannot operate without a valid license,” said Waiswa, adding that UCC has sent multiple reminders to Posta Uganda.
The UCC explained its reluctance to close down Posta Uganda due to the strategic role it plays as Uganda’s designated postal operator under the Universal Postal Union (UPU) Convention, which requires member countries to maintain a national postal entity.
“We are aware of our international obligations,” said Waiswa. “We must balance national interest and our UPU commitments, which bind us to have a national operator.”
Should Posta Uganda be unable to resolve its financial issues, UCC may recommend that the government designate a private company as Uganda’s national postal operator, similar to models adopted in Algeria, Egypt and Morocco. Waiswa noted that while international players like DHL might be interested, the private sector may not fully meet the logistical and universal service needs currently covered by Posta Uganda.
During the session, it was revealed that Posta Uganda owes Uganda Telecom UGX 5.5 billion in rent and the Uganda Revenue Authority (URA) UGX 1.4 billion in Value Added Tax and UGX 1.2 billion in rental tax arrears.
Thembo Nyombi, Executive Director of UCC, urged Parliament to support Posta Uganda by bailing it out and helping it re-engineer its operations to tap into Uganda’s growing logistics sector. “They need financial leverage and investment to redefine their business. Posta Uganda’s logistical role is essential, and it should not be left solely to private entities,” said Nyombi.
He also emphasized that UCC has refrained from enforcing penalties on Posta Uganda’s licensing lapses due to its status as a national asset, adding, “This is an important national operator, and we must support it.”
The UCC officials also recommended Posta Uganda look to Posta Tanzania as a model for operational excellence, highlighting Tanzania’s success in logistics for critical sectors, including examination delivery and medical supplies.
Committee Chairperson Faith Nakut echoed the call for government intervention, stating, “Uganda’s postal services must be preserved. This investigation will guide re-engineering efforts to decide on the necessary government actions.”
The Ad hoc Committee was formed by Speaker Anita Among in response to a report by the Auditor General, which pointed to significant management gaps within Posta Uganda, including UGX 20.4 billion in unpaid liabilities, UGX 45 billion in court awards, and payroll liabilities of UGX 3.2 billion.
