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Parliament Reviews Uganda Air Cargo Aircraft Deal

Parliament Reviews Uganda Air Cargo Aircraft Deal
Investigation into Failed Joint Venture
Uganda’s parliament has launched an inquiry into a contentious 2024 aircraft acquisition involving the Ministry of Defence and Veteran Affairs (MoDVA) and Dubai-based investment firm Alpha MBM. The investigation follows growing concerns over the collapse of a joint venture aimed at revitalising the state-owned Uganda Air Cargo Corporation (UACC). Lawmakers are demanding accountability after the partnership, intended to recapitalise the dormant carrier, delivered only one of seven promised aircraft before the sole plane was repossessed, leaving UACC without an operational fleet.
The agreement saw UACC receive a Boeing 737-400(F), registration P4-JMD, under a memorandum of understanding signed on May 23, 2024, with Alpha MBM, the private investment office of Dubai’s Sheikh Mohammed bin Maktoum bin Juma Al Maktoum. However, during a parliamentary session on July 17, Medard Lubega Sseggona, chair of the Committee on Commissions, Statutory Authorities and State Enterprises (COSASE), sharply criticised the deal. He questioned the tangible benefits brought by the private partner, stating, “For the past year, the joint venture partner has failed to meet its obligations, yet the ministry insists UACC abides by the deal. The partner contributes no equipment, no business ideas—what value do they bring?”
Financial Mismanagement and Operational Challenges
The parliamentary committee has directed UACC to submit a value-for-money audit and summoned MoDVA to explain its failure to pay UGX29 billion (approximately USD 8 million) owed to UACC for troop transport services to Somalia. These developments come amid broader concerns about financial mismanagement and undue interference in UACC’s operations. A recent report by Uganda’s Auditor General highlighted that UACC is burdened by uncollected debts and significant liabilities, with MoDVA identified as its largest debtor. Lawmakers questioned the rationale behind the ministry’s continued push for recapitalisation while neglecting outstanding payments.
Further scrutiny has been applied to UACC’s annual budget of UGX8 billion (around USD 2.2 million) allocated for salaries and maintenance, despite the absence of operational aircraft. Member of Parliament Yusuf Nsibambi described UACC’s dysfunction as an “economic liability,” calling for urgent measures to restore the carrier’s independence and reconstitute a functional board.
External Pressures and Future Prospects
The difficulties confronting UACC are exacerbated by external factors. The aircraft deal is reportedly under review by UK competition regulators, who are assessing its potential impact on market competition. Additionally, the global aviation sector faces shifting tariffs that threaten the viability of such transactions, prompting airlines to reconsider vendor networks and acquisition strategies. Competitors are expected to respond with strategic adjustments in supply chain diversification and network planning, intensifying pressure on UACC to resolve its internal challenges.
UACC, which lost its air operator’s certificate in 2014, has requested UGX381 billion (USD 106.2 million) to resume operations. According to the Auditor General’s report for the fiscal year ending June 2024, the carrier’s primary revenue-generating asset, a Lockheed Hercules L100-30, has been grounded in Jordan since November 2022 due to required avionics upgrades and the absence of anticipated capital injections from MoDVA. Historical records indicate that UACC previously operated two L-1011-200(F) freighters, both currently stored at Entebbe International Airport.
As parliamentary scrutiny intensifies, the future of Uganda Air Cargo remains uncertain, with both domestic mismanagement and international regulatory challenges posing significant obstacles to its revival.

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