Impressive AGM: Umeme Jumps out of Covid-19 Frying Pan with UGX139Bn Harvest, Sets UGX88Bn for Shareholders

Uganda’s holder of the power franchise, UMEME, made a profit amounting to UGX139Bn from the 2021 business calendar. Out of that handsome harvest, the company is set to pay a total of UGX88Bn to its shareholders. Not a bad harvest, seeing that 2021 was the year of the devastating Covid-19 which hit global economies and business like a bushfire.

The Investigator Business desk has analyzed the accounts released at the Thursday’s UMEME shareholders annual general meeting to come up with those rosier figures. Given that 2021 was a year of Covid-19, which forced many companies, including banks to withhold dividends in order to use the money to cover the wounds left by the scourge, one would not be entirely wrong to conclude that UMEME has been an exceptional case among a sea of companies that Covid-19 left limping.

But just how exactly has UMEME been able to pull off such a weighty harvest amid Covid-19 as well as a tough business environment, not to mention the dry economy as a whole? Well, the answer can be traced to the firm’s governing board and top management. The board is headed by city entrepreneur, Patrick Bitature. The fact that Bitature happens to be a board chairman to several companies and institutions of higher learning, would be the reason to attest to his business acumen. Bitature took over from departed businessman James Mulwana.

The name Mulwana was a colossus one in the business realm, seeing that the numerous companies he started continue to flourish years after his demise. No prizes for guessing, Bitature inherited a sound board from Mulwana. It is such a board which Bitature has also credibly built on to give UMEME a very solid base,both financially and corporate wise.

The other factor in the mix is Celestine Babungi, the MD of UMEME. Such is the finesse of Babungi that he was in the past, named among the best under-40 business brains. Small wonder, UMEME would end up picking him at his relatively young age to head its management wing. With such leaders at the top and given its committed as well as motivated foot soldiers, it would not surprise anyone to learn that UMEME made inroads even amidst Covid-19 and a challenging business environment prevailing locally and abroad.

Among the milestones achieved by UMEME during the business year end, include growing its customer base to 1.6 million. This was through connecting a total of 129.551 new customers to the national grid. Out of the new customers, a total of 57,000 are self-funded. By this, we mean, they pay fully for their consumption as opposed to being subsidized by the government. In other words, these ones aren’t a straw to the tax payer.

Regrettably, the government has been holding back the funds required for purposes of connecting to the national grid, the financially less able Ugandans. A total of 211000 cases are pending on UMEME desk because government has not posted the money required to do the job. And by holding the funds, the government continues to be guilty of condemning the poor to darkness which is used by criminals to terrorize the nation. This vice by the government is double edged.

The delay in connecting the poor as funded by the government, has led many desperate Ugandans to resort to connecting themselves by any means. This has not only led to accidents, some even fatal, and vandalizing of power equipment, but has also denied UMEME income and by extension, denied government itself, taxes.

UMEME’s MD told the AGM that the Yaka project has registered tremendous success. As we speak, we have managed to extend the service to 99% of our subscribers throughout the country, Babungi could not help flashing a smile as he reported this to his bosses, the shareholders.

Stated the MD assuredly, “The Yaka System has been a game changer in sustainable revenue collections, better customer experience, safety and reduction of costs related to the commercial cycle from meter reading, billing, bill delivery and credit management actions to collect overdue debts from the customer side”.

Overall, the MD added, the Yaka system has also helped customers to choose the power they can pay for. This has in turn, helped them to escape the curse of unplanned bills which used to be the order of the day in the gone by days.

The other revelation Babungi made is to do with the general increase in the demand of electricity countrywide from 3,201 to 3,507 in 2020 and 2021. As per losses, there was a small increase of 5 % in 2021. Before then, the losses incurred by UMEME totaled to 17.5 percent.

2021 saw the losses increasing to 18 percent. This, Babungi reported, was due to limited field activities, a spike in illegal connections as well as the general technical losses arising out of the growing demand for power yet with reduced investments in the distribution system.

UMEME Board chairman, Patrick Bitature was all praises for the security agencies,more so the Police for arresting wrongdoers, people vandalizing as well as stealingthe company properties and those, who carry out illegal connections. He challenged fellow shareholders to join the fight to bring an end to power thefts which reduce the dividends payable to them.