KAMPALA, May 1, 2024 – Parliament has approved a supplementary expenditure budget worth Shs1.106 trillion for settling the offtake arrangement between government and DEI BioPharma Limited, wage, pension and gratuity shortfalls.
During plenary yesterday, the Deputy Chairperson of the Budget Committee, Achia Remigio presented the committee’s report approving the supplementary budget.
Achia said the government has initiated the process of acquiring equity in DEI BioPharma Limited, a member of DEI Group, as a strategic intervention to increase the local production of pharmaceutical drugs.
Located in Matugga, Wakiso district, DEI BioPharma Limited is being allocated Shs 578.4 billion to enable it complete business production and ensure it comfortably meets its debt obligations and operational requirements.
“It should be noted that the Minister of Science, Technology and Innovation provided a written commitment to the committee, stating that ‘no funds would be disbursed to the company until the valuation process is completed and the government’s stake in the Company is formally established,” the report reads in part.
Kira Municipality MP who is also the Shadow Minister of Finance, Ibrahim Ssemujju Nganda presented a minority report opposing the request stating that it did not comply with the law.
“We oppose donating Shs 578 billion to Mr Mathias Magoola [DEI BioPharma Ltd.’s CEO]. All the activities and items the government is seeking to finance through the second supplementary do not meet the requirements of the Public Finance Management Act,” he said.
Kachumabala County MP, Simon Peter Okwalinga said he supported the majority report but objected to funding Magoola’s DEI BioPharma Limited.
“I would like the government to come clean on this issue and tell us where this money is heading,” he said.
The Minister of State Minister for Northern Uganda, Dr Kenneth Omona supported the report of the committee indicating that the government is supporting local manufacturers as a measure to enhance import substitution.
“Uganda is already beginning to export pharmaceutical products which is good for our country,” Omona said.
He however said that the government must be very serious and ensure that there is value for money in the investment.
Kampala Central MP, Muhammad Nsereko criticised the prioritisation of funding of a private investor DEI Pharma Limited amidst challenges in the country’s health sector. He also said in order to seek a supplementary, it should be unforeseeable and unavoidable.
Butambala County MP Muhammad Muwanga Kivumbi added that the government has an investment vehicle in Uganda Development Corporation that they should use instead of Parliament directly giving money to Magola.
The Minister of State for Finance [General Duties], Henry Musasizi told the House that when the valuation has been completed, they will now come to equity. He said the company as it stands is “sick” and government does not want it company to “die”.
Presiding over the House, Speaker of Parliament, Anita Among said that much as there is a commitment on valuation, government must do the valuation.
She instructed the Budget Committee to monitor and ensure that the valuation is done. She demanded a full valuation report of the assets and finances.
“No disbursement of this money before the valuation is done. Upon the valuation and this money is paid, the security must be kept with the treasury and not with the owner,” she ordered.
In the other allocations, Shs 166bln goes to the Ministry of Lands, Housing, and Urban Development for Uganda Support to Municipal Infrastructure Development and external financing for Competitiveness and Enterprise Development Project, and an additional Shs 66bln for compensation among others.
The Ministry of Gender, Labour and Social Development was allocated Shs 3bln for the Anglican, Catholic and Muslim martyrs shrines in Namugongo and Shs 1 billion will go to Nebbi Diocese who will host this year’s June 3, Martyrs Day celebrations.
Shs 13.6bln will be given to cater for wage shortfalls of Kampala Capital City Authority clearing casual workforce among others.
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