A section of members of the public have questioned the rationale behind government injecting shs578bn as bail out Dei Pharmaceuticals, a vaccines factory in Matugga, Wakiso district.
Documents presented by the Ministry of Finance on April, 19 to Parliament for a shs1 trillion supplementary budget, shs578 billion of which will go towards the private factory.
“Shs 578.4 billion will be allocated to the Ministry of Science, Technology and Innovation to support strategic pharmaceutical industrial investment under DEl Bio pharma. This funding aims to facilitate the completion of the business-production cycle, ensuring the company meets its debt obligations and operational requirements,” State Minister for Finance in charge of Planning, Amos Lugoloobi told parliament.
However, sections of the public have questioned the move, saying it makes no sense for government to channel this amount of money for the private factory.
“Why should the taxpayer carry investment costs of a private firm,” a social media user who identified himself as Son of Wesley said on X.
One Sam Okwalinga said sometime back, Mathias Magoola, the head of Dei Pharmaceuticals had been paraded as one who was going to manufacture Covid vaccines and funded to a tune of $15.1 million for the project but this never came to pass.
“Do we really need to spend shs578 billion on this businessman? Do we have a plan in place to address potential risks with this so-called investor? This comes when the saga of the specialised hospital is still fresh in everyone’s minds?” one Moses Mera asked.
Many social media users insisted that giving such a huge amount of public funds to the private investor makes no sense.
Last year, the facility was put up for sale over failure to pay debts.
“We have been duly instructed by our client, a financial institution which is the registered mortgagee to advertise and sale by public auction to recover the outstanding loan balance, our fees and other costs. The owner/ owners are hereby notified that unless full payment to our client is effected within 30 days from the date of this advert, the property shall be disposed of to recover our client’s money,” a notice from Kaweesi and Partners Advocates dated September, 14, 2023 read in part.
The notice for sale of the facility was put up for sale only two months after Museveni commissioned it on December 15, 2022.
Parliament last year committed shs70billion in this financial year’s budget to Dei Pharma Limited for the factory after he told the August House’s budget committee that he needed $1 billion( approximately 3.7 trillion).
This came after the proprietor, Mathias Magoola told government he had borrowed $100 million (nearly Shs 400 billion) from Equity Bank Kenya to fund the construction of the Dei BioPharma factory in Matugga.
He however said he encountered financial hurdles, prompting a plea for government intervention.
Parliament accepted to bail him out but this came amidst protests from opposition legislators led by Muwanga Kivumbi and Ssemujju Nganda who warned government that it was being fleeced.
“We submit that the consolidated fund shouldn’t be used as a lender to all non-bankable idea. If those projects are feasible, and worth supporting, there are many ways through which the government can support them. For instance, that money should be channeled through the Uganda Development Bank or Government can acquire shares in those ventures,” Muwanga said then.
Many are questioning why government is bailing Magoola out even after he failed to utilize the loan acquired from Equity Bank Kenya.
https://www.ugbulletin.co.ug/public-uproar-as-govt-plans-to-bail-out-private-vaccine-factory-with-shs578bn/
