The Uganda Youth Democrats (UYD), the youth wing of the Democratic Party, has called on the government to roll out uniform strategies in business bailouts.
The call comes after reports that the government is set to give businessman Patrick Bitature a relief package of shillings 240.9 billion.
UYD president Ismail Kirya said the system of bailing out businesspeople should not be discriminatory.
“They should not just look at bailing out friends, relatives and in-laws of this government,” he said.
Kirya welcomed the idea of bailing out Bitature but termed it “discriminatory”.
He said the government should not only concentrate on specific people but every businessperson (those with collapsed businesses) as well when giving bailouts.
“Many businesses including Maganjo, WBS, Sembuule and others are still struggling with untold debts,” Kirya added.
He urged the finance ministry to provide the criteria people should follow to receive relief packages for their businesses.
Background
Last week, Cabinet approved a request to bail out Bitature in a process that involved the purchase of the Electromax power plant in Tororo district which he proposed to the Government.
This was after the International Chamber of Commerce Court of Arbitration in London, reportedly ordered Bitature, his wife Carol Nzaro, and four of their companies to pay South African lender Vantage Mezzanine Fund, $66m (about shillings 247 billion).
The funds are, therefore, intended to serve as a lifeline for Bitature, who finds himself mired in debt.
Analysis
The UYD’s call for uniform business bailout strategies is timely and important. The government should not be seen to be favoring certain businesses or individuals over others when it comes to bailouts.
The government should also be transparent about the criteria it uses to determine who is eligible for a bailout and how the amount of the bailout is determined.
It is also important to note that bailouts should only be used as a last resort. The government should first focus on creating an environment that is conducive to business growth and success.
