Ugandan Prime Minister Amama Mbabazi has been tasked to explain why government refused to rescue Sembule Steel Mills yet he promised last year that government will protect the industry.
In a question and answer session with the Prime Minister at Parliament, Rubaga South MP Ken Lukyamuzi asked why Mbabazi made empty promises to Ugandans and whether it is not too late to rescue the industry.
Mbabazi said that indeed government had intended to rescue the industry because it is invested in encouraging the growth of internal capacity but failed to raise the money required to pay off the Sembule’s debts.
He said that after discussing the matter with the concerned parties including the President, the Minister of Finance and the proprietors of Sembule, government had earmarked 5 million dollars to rescue it but required more money which government could not raise.
But Lukyamuzi challenged the Prime Minister saying that the industry needed only 7 billion shillings to pay off its debts and resume operations yet he was talking of 5 million dollars not being enough. Mbabazi said that the figure that the proprietors mentioned was more than 7 billion shillings. He said the issue became more complicated because the matter was already in court and that required raising actual cash which government did not have available.
The Prime Minster added that if government had money, it would have helped but there was no way government could have acted against the court order. He said that government is still in talks with the proprietor Christopher Sembuya.
Workers at the Sembule Steel Mills last year petitioned Parliament urging it to compel government to intervene and help the company pay off the 7 billion shillings it owed Bank of Baroda.
Parliament discussed the petition and demanded that government should not let the bank take over one of Uganda’s largest local investment. Despite Mbabazi’s assurance that government would surely intervene, Sembule was taken over by the bank in November last year.