Auditor General’s Report Exposes Loopholes in The Umeme Buyout, Slashes it by Billions as Shocking Audit Uncovers Hidden Debt Scandal

A storm is brewing over the true cost of buying out Umeme Limited, Uganda’s electricity distributor, as discrepancies in the numbers come to light.

The Auditor Genera, Edward Akol has advised the government to pay Umeme $118.3 million (UGX 432.9 billion), significantly lower than the $190.9 million (UGX 698.6 billion) approved by Parliament.

However, this recommendation has stirred debate among stakeholders, with some questioning the accuracy of the calculations.

The audit, commissioned to verify Umeme’s buyout claims, also uncovered a new financial puzzle, where Umeme itself owes the Uganda Electricity Transmission Company Limited (UETCL) UGX 42.8 billion as of March 13, 2025. Yet, Umeme’s own records suggest a different amount, excluding its February invoice.

This mismatch has raised fresh concerns about financial transparency as the power sector transitions from private to public hands.

The report, handed over to Parliament by Auditor General, on Thurday, found that some assets listed under the buyout claim were still undergoing verification. It also pointed out that certain infrastructure modifications were excluded from the final calculations due to lack of complete documentation.

Meanwhile, a special audit by global accounting firm Grant Thornton revealed that some properties linked to the concession could not be located, and others were encroached upon.

The report recommended that Uganda Electricity Distribution Company Limited (UEDCL), which is set to take over operations, should conduct thorough land searches and resolve boundary disputes before assuming full control.

The government has reiterated its commitment to executing the buyout process in line with the Auditor General’s recommendations. However, Umeme’s head of communications, Peter Kaujju, noted that the company would review the report before deciding its next steps.

Attorney General Kiryowa Kiwanuka cautioned against delays, warning that any postponement in settling the buyout could lead to penalties.

On the other hand, opposition lawmakers, led by Joel Ssenyonyi, have demanded further scrutiny, arguing that rushing the process without proper parliamentary oversight could set a dangerous precedent.

As the March 31, 2025 deadline for Umeme’s exit approaches, unresolved issues continue to emerge. The audit highlighted gaps in asset records, environmental compliance, and the condition of network infrastructure. Some assets remain unaccounted for, while others require repairs before they can be effectively utilized.

Despite these challenges, UEDCL remains confident about the transition. Chairperson Francis Okello assured the public that the shift to public management would be smooth, though the company requires UGX 4.02 trillion for operational and capital costs over the next three years.

With the buyout figures in dispute and outstanding debts yet to be reconciled, the road ahead is anything but smooth. The government must strike a balance, ensuring a fair deal for taxpayers while avoiding prolonged disputes that could disrupt electricity supply.