Defence Ministry Summoned Over UGX29Bn Air Cargo Arrears, Operational Interference

By Our Reporter

Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) has summoned the Ministry of Defence and Veteran Affairs to explain its failure to pay UGX29 billion owed to Uganda Air Cargo Corporation (UACC) for transporting Ugandan troops to Somalia, and its continued interference in the Corporation’s operations.

The summons were issued by COSASE Chairperson, Hon. Medard Lubega Sseggona, during a session with UACC officials on July 17, 2025, as the Committee considered findings from the Auditor General’s December 2025 report.

Sseggona expressed concern over UACC’s worsening financial position, attributing its loss-making to poor debt collection—particularly from its parent ministry.

“They have so many debts they are not collecting, and that contributes to their losses. But the biggest defaulter is their parent ministry—the Ministry of Defence—which we find unacceptable. We have therefore summoned the Minister and Permanent Secretary to appear before the Committee,” said Sseggona.

According to Auditor General Edward Akol’s report, UACC’s debt recovery mechanisms are weak. The Corporation had outstanding receivables worth UGX20.75 billion as of June 30, 2024, with UGX8.17 billion (39%) of that debt being over five years old.

The Committee was also alarmed to learn that UACC owes UGX38 billion to various government entities, while still seeking recapitalisation from the very government whose agencies haven’t paid for services rendered.

“This should be the last time we are seeing arrears of this nature. You must stop the casual conversations with your parent ministry. If the ministry has input, it is already represented on your board. Its mandate is policy—not day-to-day management. We established you to make money and deliver profitable services to the country,” Sseggona emphasized.

The scrutiny comes months after the Ministry of Defence requested Parliament in January 2025 for an additional UGX381 billion to recapitalize UACC, which is currently grounded. One aircraft was damaged by a bird strike, another is stuck in a war zone in Sudan, and the remaining fleet is too old to operate.

More controversy arose when UACC’s General Manager, Nakibus Lakara, revealed that the Ministry of Defence entered a joint venture agreement with Alpha MBM DWC-LLC without consulting UACC’s Board or Management. The venture, intended to recapitalize the Corporation, has so far delivered no benefits.

MPs were infuriated to learn that the private partner supplied only one of the seven promised planes, then took it back, leaving the Corporation with no operational fleet. Sseggona criticized the imbalance in the agreement.

“For the past year, the joint venture partner has failed to meet its obligations, yet the ministry insists UACC abides by the deal. The partner contributes no equipment, no business ideas—what value do they bring?” he asked.

COSASE has directed UACC to submit a value-for-money assessment of the joint venture, including details of any income generated from the partnership.

Further concern was raised over UACC’s expenditure. Despite an annual budget of UGX8 billion for salaries, board bonuses, and aircraft maintenance, none of its aircraft are operational.

“We gave you money, and you paid salaries. For seven years, your staff have not been working—yet you still deduct and remit Pay As You Earn taxes. What services are being paid for?” Sseggona asked.

Hon. Yusuf Nsibambi (Mawokota South) decried the lack of a functioning air cargo system, calling it a national economic liability.

“This country cannot develop without an efficient cargo system to move goods and people. From what I’ve seen, UACC seems to be operating under the wings of the Ministry instead of independently,” Nsibambi said. “You are not a small entity. UACC is vital to this economy. If there’s no Board of Directors, that situation must not last a week.”