Why Gov’t must bail out Biyinzika

By Joshua Tubuuze

For days now, media has been awash with stories of local investors who want government bailout. I will focus on Biyinzika because as a farmer, that is where my interest is. I deeply feel that government has to bail out Biyinzika because of the following;

Having bailed out Mr. Patrick Bitature who was going through the same hardships, it will look awkward and some may take it tribal, for government not to help Mr. Samuel Muwanguzi Mukasa of Biyinzika Enterprises LTD in the same way. Indeed, I have already heard programs on radios, callers in radio talk shows and on social media, attributing gov’t’s intervention in Bitature’s problems, and non-intervention in Biyinzika’s troubles as tribal, saying that gov’t discriminates Ugandans it has what they call loved Children and hated children (abaana n’ebyana). I also heard Buganda radio CBS coming out to fight for Biyinzika, and it became very clear to me how tribal the matter had become.

Adding salt to this tribal wound, on 1 November 2023, the CEO Magazine reported that government was bailing out another local investor Ben Kavuya, by buying shares worth $12.7 million in his medical gloves making company. You can now see where people get this saying of ‘abaana n’ebyana!’

This is the first time Biyizika is requesting for a bailout. The observer reported on 18 October 2023, that this is the second time the government is bailing out Bitature. The first time he was bailed out with 47 billion as the obersver quoted independent published on September 5 2016.

Other investors such as Hassan Basajjabalaba and many others have been bailed out severally.
Biyinzika being the oldest poultry company in Uganda, its collapse means the industry is losing an experience of close to 35 years, which is not feasible for a developing economy like ours.
Biyinzika is said to be possessing arguably the biggest grain storage silos in the country.

The country is grappling with poor grain storage due to lack of facilities, causing high levels of aflatoxins in grain, making it unfit for people and animal consumption, which has led to the neighbouring countries burning our grain exports. It should be in government interest therefore, that one of the few investors who have invested in storage facilities doesn’t collapse.

Biyinzika businesses touch the common Ugandan for example who grows 300 broilers every 6 weeks to sustain himself and his family, in addition to those small holder farmers in villages who grow soya, sunflower and maize that he uses in poultry feeds. He also employs hundreds of people directly.

All these people will be at the receiving end of his collapse.
Reading an article about Biyinzika in the New vision, I developed an understanding that his problems are not as a result of negligence or mismanagement, but due to Covid-19 and the changing government policy.

In Covid lockdowns for example, we all witnessed how eggs became too cheap to be a good business to farmers. For that reason, farmers sold off their layer chickens, this means that for 2 years people were not buying feeds and chicks, which are the major products from which this company used to gets money.

They also mentioned how government all of a sudden issued a change in policy and stopped investors to mortgage the land they bought (leased) from Uganda investment authority. Biyinzika has an investment on the same type of land and a bank had agreed to give him money using it as a mortgage.

As soon as gov’t issued this directive, the bank pulled out. This meant that they couldn’t continue investing more on the land that will have no financial value in terms of mortgage.

Bukedde Newspaper reported that for this reason of change in gov’t policy, though Biyinzika had just bought another land for extension in the exact same area to locate the new machines that were on site already, and the land was by this time cleared, levelled, retainer wall finished and foundations of the factory finished, they had to look for another land in Mukono, buy it, do cut and fill etc to locate the factory there.

The author can be contacted on +256706326985

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