By CHIMPREPORTS
Ugandan government officials are working swiftly to enact a presidential directive that endorses a United Arab Emirates (UAE) investment firm, ROWAD Commercial Broker LL.C., to acquire a 60% stake in Uganda Telecommunication Corporation Limited (formerly UTL) and secure exclusive rights to manage the National Backbone Infrastructure (NBI).
In a letter dated December 22, 2023, President Museveni corresponded with ICT Minister Chris Baryomunsi, stating that he had received “a letter from our friends from the UAE who want to invest USD 250 million in UTL.”
Museveni went on to state, “You should accept that Rowad Capital acquires a 60% share straight away. The details of who puts in more money can be settled along the way. They should have a majority on the board.”
The President, having met Rowad Capital officials twice in the past six months, further directed that the UAE investors “should also be given the management of the ICT backbone, which, I hear, had been assigned to another private operator without my knowledge.”
He expressed his concern, questioning, “Who made that decision? What advantage did Uganda gain from it? The telecommunication sector is a significant revenue generator. Many people use telephones and pay for voice exchanges and messages. It is beneficial for the country that we now have 32 million telephone lines compared to the 23,000 of 1986.”
ChimpReports has discovered that on December 22, 2023, the Ministry of ICT and National Guidance (MoICT&NG), Ministry of Finance, Uganda Telecommunication Corporation Ltd. (UTCL), and ROWAD Commercial Broker LL.C. entered into a share subscription and allotment agreement.
President Museveni is featured in a group photo alongside members of Rowad Capital Commercial LLC (RCC), Government of Uganda officials, and Uganda Telecommunications Corporation Limited after signing an MOU for a joint business venture at the State House Entebbe on December 22, 2023.
According to a communication from Attorney General Kiryowa Kiwanuka, the shareholding was determined “following a series of negotiations” between the government and Rowad Capital.
In the agreement, clause 5.1 specifies one condition: the current shareholders (MoICT&NG and MOFPED) of UTCL must promptly ensure the transfer of the management and commercialization of the national backbone infrastructure to the company (UTCL).
On January 2, 2024, AG Kiryowa wrote to Baryomunsi, stating that while the contract becomes enforceable upon signature, certain conditions need to be met by the company and shareholders for completion to be effective within 90 days from the signing date; otherwise, a breach of the agreement would occur.
Kiryowa urged Baryomunsi to “initiate negotiations and conclude the Shareholders Agreement; the Government Support Agreement; and engage in discussions with the current management of the NBI on the modalities, financial (MoFPED) and technical (Ministry of ICT and NITA-U) implications, of transferring management of the NBI from the current arrangement to UTCL as envisaged under the Agreement.”
On January 23, 2024, representatives of various government bodies, including the ICT Ministry, Finance Ministry, and Attorney General’s chambers, convened a meeting and reached an agreement that all relevant stakeholders would be involved in discussions regarding the technical and financial requirements necessary for the smooth transfer of NBI management to UTCL.
Concerns have been raised about the potential risks to data security, as the NBI infrastructure serves as a gateway for crucial government communications and transactions. Officials caution that transferring this vital national asset from NITA-U, a fully government entity, to UTCL could compromise national security. The backbone supports critical services, including transactional services and payments, security surveillance through police CCTV cameras, IFMS by the Ministry of Finance, the National Identification Database by NIRA, and e-tax services by URA.
The 4,300-kilometer optical fiber backbone is currently under the management of the National Information Technology Authority of Uganda (NITA-U), providing connectivity to ministries, departments, and agencies, including police CCTV cameras, courts, NIRA, and Electoral Commission offices nationwide.
In his December 22, 2024, letter to Baryomunsi, President Museveni expressed his frustration with foreign telecoms repatriating large sums of money to their home countries. He emphasized the need to reactivate a company where the government owns 40%, highlighting that a well-run company with private sector partners is a sound decision. Museveni believes that the joint venture company of UTL will create jobs, pay workers, cover utilities, pay taxes, and generate dividends for the country, similar to private telephone companies.
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