Uganda stands on the brink of losing a substantial €18 million (estimated shs 74 billion) investment from the Austrian government, intended to establish a plant for manufacturing PVC profiles for low-cost housing.
The funds, approved through Austrian Control Bank, were meant to bolster Uganda’s efforts to provide affordable housing for the Uganda People’s Defence Force (UPDF) officers, police, and other government agencies.
However, delays and alleged internal sabotage within the Ministry of Finance have jeopardized this crucial project.
The investment was secured following a meeting between President Yoweri Kaguta Museveni and Former Austrian Chancellor Alfred Gusenbauer on May 25, 2023.
During the meeting, the Austrian delegation expressed a keen interest in partnering with Uganda’s National Enterprises Corporation (NEC) to address the country’s housing deficit.
The President endorsed this initiative, directing relevant government bodies to facilitate the project’s implementation.
Since then, the Austrian government has approved export financing of €18 million for the project.
Despite this, efforts to obtain a formal commitment from Uganda’s Ministry of Finance have been met with silence and inaction.
Several letters and follow-up meetings, spearheaded by the Ministry of Foreign Affairs, have failed to elicit a response from the finance officials.
The continued delays have led the Austrian government to reconsider their investment, with discussions underway about reallocating the funds to another country.
This development could see Uganda losing out on a major infrastructural project that promises to deliver affordable housing solutions and significantly benefit UPDF personnel, police officers, and other civil servants.
Sources within the Ministry of Finance suggest that certain officials might be deliberately obstructing the project. Allegations of quiet sabotage have surfaced, indicating that bureaucratic inertia and possible personal interests are at play.
These actions, whether intentional or not, undermine the President’s directive and jeopardize international relations and investment opportunities.
In a letter addressed to the Minister of Finance, Alexander Khinast, Managing Director of Global Housing Solutions, a multibillion company from Austria, expressed his concerns and urged the ministry to provide the necessary written confirmation that the funds would be used for their intended purpose.
“We went ahead and through our government approved Export Financing of 18 million Euros towards the project. The President and Lt Gen Mugira of NEC are aware of this development since December 2023,” the letter reads.
“The purpose of this letter to you therefore is to request kindly to get a written communication to us confirming that the plant will be purely for the purpose of putting up affordable housing for the officers a families of the UPDF, the Police and any other government agencies”
The letter highlighted the urgency of the matter, emphasizing that further delays could result in Austria reallocating the investment.
Similarly, Vincent Bagiire, Permanent Secretary of the Ministry of Foreign Affairs, has formally requested the Ministry of Finance to expedite the process. His communication underlines the critical nature of the investment and the potential consequences of continued inaction.
“The Austrian team further informed the Ministry that they require a written confirmation from the Government of Uganda to confirm that the funds secured will be utilized for the purpose that had been identified. A letter to this effect is herewith attached. This is therefore to request you to forward the letter to the Minister for his consideration and necessary action,” Bagiire’s letter reads in parts.
A year down the road since Museveni met the Austrian delegation led by former Chancellor Alfred Gusenbauer, Ministry of Finance remains tight-lipped.
As the situation reaches a critical juncture, there is an urgent need for high-level intervention to resolve the impasse.
President Museveni’s office is expected to step in to ensure that the Ministry of Finance acts swiftly to secure the investment.
The loss of €18 million would not only affect the housing project but also cast a shadow over Uganda’s ability to attract and retain international investments in the future.
Top officials at Ministry of Finance including Minister Matia Kasaija and Secretary to the Treasury Ramathan Ggoobi were unavailable for a comment.