Uganda Airlines Losing Billions on Suspended Top Managers

Uganda Airlines

Entebbe, Uganda | AFRICATEMBELEA | Uganda Airlines spent sh2.3 billion on the salaries of suspended top managers and extra pay for those appointed to act in their positions, a report by the Auditor General, John Muwanga has revealed.

The Works and Transport Minister, Gen. Edward Katumba Wamala suspended the affected officials on April 21st, 2021 for a period of 3 months effective April 29th, 2021 on the orders of the president, Yoweri Museveni to pave way for investigations into allegations of financial mismanagement, collusion and nepotism in staff recruitment among other issues.

The 13 affected top managers included the CEO Cornwell Muleya, finance director Paul Turacayisenga, Rogers Wamara the Director Commercial and Procurement Manager Moses Wangalwa. Others are Sales and marketing Deo Nyanzi, Andrew Tumusiime (Senior administration manager), Harvey Kalama (Ground Operational Manager), Bruno Oringi (Safety Manager), Michael Kaliisa (Quality manager), Crew Training Manager Juliet Otage Odur and first Officers Kenneth Kiyemba and Alex Kakooza.

The president also directed the disbandment of the Pereza Ahabwe led board of directors. However, the Auditor General notes that a “review of the staff files revealed that there were no committee resolutions on the cases and as a result Management extended the suspension on August 20th 2021 for another 3 months”. He also notes that the suspended staff remained on the same terms of the contract, those acting in their positions “receive extra pay implying double payment for the same position.

As a consequence, the company has lost Shillings 2,319,017,267 in seven months period from May to November 2021.” As a result, Muwanga says that Uganda Airlines is losing billions due to the delayed conclusions of the suspension cases. Sources at the airline indicate that Muleya earns over sh50million every month while top managers earn more than Shillings 40 million monthly.

General Katumba appointed Jenifer Bamuturaki Musiime as the Acting CEO and other staff to carry out roles of the suspended managers in May 2021

To date, Musiime remains in an acting position earning close to Shillings 30 million monthly while Muleya continues to earn his monthly salary and allowances, resulting in double payment, according to the Auditor-General.

In his response to the audit query regarding billions being lost due to prolonged suspension of top managers, Gen. Katumba said that the shareholders are taking time to resolve the matter to ensure due diligence is done to avoid appointing “incompetent people” as highlighted by Finance Minister, Matia Kasaija.

In October 2021, Kasaija said that the shareholders had made the mistake of appointing an incompetent board of directors and managers.

Uganda Airlines currently flies to 10 African destinations including Nairobi, Bujumbura, Johannesburg, Mogadishu and one international route that is Dubai. According to the business plan, the airline was expected to fly to at least 20 destinations by end of this year including London, Addis Ababa, Lusaka, Mumbai, Guangzhou among others to connect Uganda to Europe, the Middle East, West Africa, and Asia.

Kasaija however said that the operations of the national carrier have been hampered by mismanagement and the gross impact of the COVID-19 pandemic on global travels among other issues. He said that the two rocky years of the national carrier had largely been a result of the appointment of the board directors and managers without experience in the aviation industry.

He, however, said that the shareholders would resolve the corporate governance and management issues by mid-2022. Katumba says that the shareholders will address the management issues at the airline. He, however, says that there is a need to give the airline the benefit of doubt because it has just marked its second year of operations and is definitely not able to make profits in that period.

It came after the Auditor General noted that by June 2021, the airline had made losses for the second consecutive financial year. The government revived the national carrier 2019 lower transport costs, boost tourism and business opportunities for Ugandans.

Board Directors Asked to Resign

On January 19t, 2022, Bisereko Kyomuhendo, the Company Secretary of Uganda Airlines wrote to the suspended board directors asking them to resign. The seven board members include the chairperson, Pereza Ahabwe, Benon Kajuna representing the Ministry of Works and Transport, Godfrey Ssemugooma representing the ministry of Finance, Planning and Economic Development, Charles Hamya, Rehema Mutazindwa and Catherine Asinde Poran.

In the letter, Kyomuhendo noted that the shareholders approved a departure package of Shillings 30 million for each director and pay-outs of Shillings 5 million for six months last October. This means that each director would pocket Shillings 60million upon resigning from the board. The government revived the national carrier 2019 to lower transport costs, boost tourism and business opportunities for Ugandans.

Registered as Uganda National Airlines Company Ltd (UNACL), the airline is under the joint supervision of the ministries of works and finance, which own 50 percent shares each. It currently has over 300 staff including top managers who are mostly in acting positions.



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