The Managing Director, National Enterprise Corporation (NEC), Maj. Gen. James Mugira has revealed that the Army has been able to offset the Shs28Bn losses it has made in the past 8 years and finally managed to make the corporation profitable.
Mugira made the remarks on Thursday, July 4, 2024, while appearing before the Committee of Commissions, Statutory Authorities, and State Enterprises (COSASE), where he led his team in responding to queries raised in the December 2023 Auditor General’s report.
“On the positive side, according to the Auditor General’s report for 2023, four of the NEC subsidiaries are among the 10 government-owned enterprises that made profits during the year under review. As a corporation, over a period of 7-8 years, we have been able to reverse and offset the accumulated loss of Ugx 28 billion, which we think is an achievement, and consequently, we have started making some profits in the last two years,” Mugira remarked.
The December 2023 Auditor General’s report shows NEC Luwero Industries Limited posted profits of up to Ugx 8Bn in 2022/23, up from Ugx 7.88Bn recorded in 2021/22, while NEC Construction Works and Engineering Limited in 2022/23 recorded profits worth Ugx 5Bn in 2022/23, up from Ugx 4.35Bn in 2021/22.
The other subsidiary to post profits was NEC AGRO SMC Limited, which recorded Ugx 4Bn profits in 2022/23 from Ugx 1.64Bn in 2021/22, and although NEC Uzima Limited posted profits to the tune of Ugx 160M, this was a drop from Ugx 190M in 2021/22. However, the subsidiary recently won a lucrative deal as the supplier of water at Parliament, a move that will likely sour its profits.
NEC was established in 1989 by an Act of Parliament to serve as a commercial arm of the Ministry of Defence/Uganda Defence Forces and to produce goods and services that are beneficial to the Defence Forces and the general public.
Reports state that NEC has previously registered losses since its inception due to poor management of its enterprises. However, Mugira says that under his new leadership, NEC has only registered profits, totaling Ugx 1.7 billion in the first year after he took over.
In 2021, Mugira stated that “from the time I took over this corporation, we have only registered profits,” indicating a significant turnaround in NEC’s financial position.
