Financial Struggles Plague Uganda’s Five-Star Pearl of Africa Hotel

Legal Experts Discuss Upcoming Auction of Pearl of Africa Hotel
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In the spotlight this week, after nearly ten years since its grand opening, is the Pearl of Africa Hotel in Uganda. The five-star hotel, located on Nakasero Hill in Kampala, has recently been advertised for sale as a means to recover debts owed to a financial institution.

Back in 2007, as Uganda prepared to host the Commonwealth Heads of Government Meeting (CHOGM), there was a pressing need for additional lodging facilities. This led to the expedited construction of hotels, including the Pearl of Africa Hotel, funded by Sudanese businessman Hamid Mohammed.

However, even before construction began, controversy arose. Aya Group, owned by the Aya brothers, had not purchased the land for the hotel but instead received it as a government donation. This land was also home to the Uganda Broadcasting Corporation and the Information ministry.

Questions were raised about the execution of a performance bond and the impact of UBC’s relocation on its signals. Financial concerns surfaced as well, with Aya Group facing difficulties and legal disputes, including unpaid legal fees and loans secured from the Industrial Development Corporation.

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President Museveni eventually became involved, expressing interest in the project’s progress. Despite delays, he praised the Aya brothers for utilizing underutilized government property.

The hotel finally opened its doors in October 2013, employing many Ugandans. However, it faced ongoing challenges, including financial crises, unpaid taxes, and lawsuits from service providers.

Additionally, a debt from South Africa, which had enabled the hotel’s construction, went unpaid. In 2021, Aya Group temporarily halted the sale of the hotel by the Industrial Development Corporation, citing breaches in financing agreements.

Recently, the liquidation process of Aya Investments Uganda Ltd began, with the appointment of an official receiver and provisional liquidator, Mr. Robert Mugabe, by the Uganda Registration Services Bureau.

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