A parliamentary debate on the Auditor General’s report has reignited public confusion over who owns Uganda Airlines, with some headlines suggesting the government holds just 0.01 percent of the company it created. It doesn’t. Uganda Airlines is 100 percent state-owned. The 0.01 percent figure is not a measure of ownership at all; it’s an accounting technicality, arising from how much of the government’s investment has been formally converted into registered share capital, versus how much still sits on the books as unconverted funds.
That distinction matters, because it has fuelled accusations of a hidden shareholder or a corruption scandal. There is no evidence of either. What the underlying figures do reveal is a pattern, repeated across several state enterprises, of government injecting large sums into companies without promptly completing the legal paperwork to formally register that money as equity.
The Numbers Aren’t in Dispute, the Interpretation Is
Uganda National Airlines Company Ltd’s shares are split equally between two cabinet ministries: the Ministry of Finance, Planning and Economic Development, and the Ministry of Works and Transport. The Auditor General’s 2025 report confirmed that the government has invested roughly 1.984 trillion shillings in the airline since its 2019 relaunch, but only 200 million shillings of that has been formally recognised as share capital. The remainder is recorded as “Share Application Funds and GoU Capitalisation, pending formal conversion.”
None of those figures the 200 million and the 1.984 trillion are contested. The controversy is entirely about how “ownership” got calculated from them: critics and several media outlets expressed the tiny formally recognised share capital as a fraction of total investment, producing the now-viral 0.01 percent. That framing measures paperwork, not ownership. But because it doesn’t distinguish the two, it created space for the headlines that followed, headlines that prompted Prof. Charles Oweyagha Afunaduula, among others, to publicly question the airline’s ownership structure, and led some Ugandans to suspect officials had installed a shadow owner to hold shares on their behalf.
Two Separate Controversies, Six Years Apart
Part of the confusion is that today’s 0.01 percent figure is being conflated with a different, earlier controversy involving the same number.
In March 2019, registration documents submitted to Parliament contained a genuine clerical error: two government ministers were listed as shareholders in their individual names rather than as representatives of their ministries. According to Twebaze Bemanya, then Registrar General, had that error gone uncorrected, ownership would have been attributed personally to then-Finance Minister Matia Kasaija and then-Works and Transport Minister Monica Azuba, which is what generated an earlier version of the 0.01 percent scare. Government corrected this in Parliament shortly afterward, filing proper allotment documents confirming the shares belonged to the state through the two ministries.
The 2025 controversy is unrelated. It stems from an accounting discrepancy the Auditor General flagged this year: of the nearly 2 trillion shillings the government has injected into the airline, only a small baseline amount has been formally logged as active share capital, while the rest awaits conversion. The 2019 issue was a paperwork mistake that got fixed. The 2025 issue is an ongoing structural gap between money spent and money formally registered, and it remains unresolved.
Why the Delay Matters
The lag has real consequences. The airline’s official balance sheet currently reflects an incomplete legal structure, with the full extent of the government’s financial commitment not yet reflected as equity a gap that raises both legal and accounting concerns. Under standard accounting practice, funds earmarked for share purchases cannot remain classified indefinitely as a “deposit.”
The Institute of Certified Public Accountants of Uganda has said the Auditor General is right to flag this, because it blurs financial clarity and makes it harder to assess the airline’s true value, debt ratios, and asset health. As things stand, the airline’s recorded share capital doesn’t reflect its actual worth, a mismatch that could complicate how the company is viewed by future investors or financiers. Experts say the timing of the conversion matters for determining whether the funds will ultimately be treated, and perform, as genuine public investment.
Not an Isolated Case
Economist Fred Muhumuza argues this reflects a broader habit: while equity financing is a legitimate tool for raising capital, government tends to convert funds into equity only after an enterprise starts to struggle. Formalising a conversion is not a paperwork afterthought; it requires the Ministry of Finance and the Ministry of Works to pass resolutions increasing the airline’s authorised share capital, updated filings with the Uganda Registration Services Bureau (URSB), and parliamentary oversight to amend the company’s articles of association.
Until that process is completed, the pool of unconverted funds keeps growing. Finance Minister Henry Musasizi has said the government has prioritised additional funding for aircraft acquisition and other operational needs, leaving the paperwork lagging.
Uganda Airlines is not unique in this respect; it’s simply the largest example. The government used a similar mechanism to rescue Vision Group from a severe cash crunch, injecting 25 billion shillings structured not as a standard loan but as convertible preference shares: specialised shares that earn a dividend and are designed for eventual conversion into ordinary shares. It has applied a comparable approach at the Uganda Development Bank, channelling billions of shillings toward boosting its capital base to 1.77 trillion shillings funds that typically enter as temporary budgetary allocations or credits ahead of the bank’s annual general meetings before being formally absorbed into registered share capital, partly to help to lower interest rates for local businesses.
A further example is Nyanza Textile Industries (NYTIL), where Parliament approved converting the government’s outstanding credits into equity, resulting in a 35 percent direct ownership stake for the state.
Taken together, the pattern suggests Uganda Airlines’ “0.01 percent” is less a story about hidden ownership than about a state that has grown comfortable spending before it finishes the paperwork a habit that, as this case shows, is entirely capable of generating a corruption scare out of an accounting backlog.