The National Enterprise Corporation (NEC) has appeared before the Defence and Internal Affairs Committee of Parliament to explain its several joint ventures.
This was led by the Minister of Defence and Veterans Affairs, Hon. Kiryowa Kiwanuka, together with the Board of Directors of NEC Uganda and the Ministry Under Secretary for Finance and Administration Mrs. Edith Buturo, who represented the Permanent Secretary Mrs Rosette Byengoma.
This was the very first time for NEC to appear before the Defence Committee in Parliament ever since its inception 37 years ago.
Minister Kiryowa introduced NEC as a commercial arm of the Ministry of Defence and Veterans Affairs (MODVA) and the Uganda Peoples’ Defence Forces (UPDF).
He said that NEC was established in 1989 under the Act, Cap 199, as the commercial arm of MODVA and UPDF to produce goods and services beneficial to the Defence Forces and the general public.
“Its mandate includes undertaking commercial and industrial activities in areas such as agriculture, manufacturing, transportation and motor assembly, while supporting national security, technology transfer, skills development, employment creation and welfare of soldiers,” elaborated Minister Kiryowa.
Hon. Kiryowa Kiwanuka explained that NEC enters into Joint Ventures principally to facilitate technology transfer, skills transfer, mobilisation of capital and local capacity building.
He said that the Joint Venture model enables NEC to partner with entities possessing specialised technology, expertise, equipment and financial resources that may not otherwise be readily available to NEC or locally. This enables Ugandan engineers, technicians, farmers and other personnel to acquire practical skills and expertise.
“The model is also important because NEC has limited resources for major capital investments. The report indicates that NEC Headquarters has received approximately UGX 2 billion annually from the State over the last 15 years, largely for salaries and operational expenses. Consequently, Joint Venture partners provide much of the capital required for factories, equipment, technology and operations, while NEC generally contributes land, infrastructure and other support,” stated Minister Kiryowa.
Minister Kiryowa further explained that NEC currently has nine Joint Ventures and one partnership covering both classified and non-classified projects.
He said that the classified ventures relate to;
A, Maintenance, repair and overhaul of military helicopters;
B, Development and deployment of advanced military and non-military technologies;
C, Manufacture and assembly of armoured vehicles;
D, Manufacture of explosives.
The non-classified ventures cover;
A, Manufacture of military garments and shoes;
B, Automobile manufacture and assembly;
C, Beef and beans processing;
D, Oil-waste management;
E, Pharmaceutical production;
F, An integrated agricultural model farm.
“These ventures therefore spread across strategic areas including defence manufacturing technology, agriculture, automotive manufacturing, pharmaceuticals and industrial services,” explained Minister Kiryowa.
Minister Kiryowa underscored the contributions of NEC and its partners to Uganda’s economy, highlighting land contribution, existing infrastructure, warehouses, goodwill and access to the Ugandan market.
“For defence-related ventures at the Nakasongola Military Industrial Complex, NEC has provided land, including approximately 30 acres for Pro-Heli, 20 acres for NEC Technologies and 20 acres for NEC-Streit,” said Minister Kiryowa.
Minister Kiryowa further clarified that the partner, on the other hand, generally provides technology, equipment, financing, construction, operational expenditure and specialised training.
“For the NEC meat and bean processing projects, NEC has provided approximately 640 acres at Kisozi, Gomba District, while the partner provides the requisite technology, skills and financing. Under the Egypt-Uganda Joint Model Farm Project, NEC has provided up to 500 hectares at Katonga, Gomba District, while the Egyptian partner provides financing, infrastructure, agricultural machinery and technical assistance,” clarified Minister Kiryowa.
The Minister further elaborated on the reinvestments of Joint Ventures, explaining that the Joint Venture model has also enabled NEC to generate dividends and internally generated funds which, with board approval, have been reinvested into productive projects, including;
A, Oil waste management project at Kyangwali – USD 4 million;
B, New NEC Uzima factory production line – USD 1.2 million;
C, NEC Security capitalisation – USD 500,000;
D, High precision workshop – USD 500,000;
E, State-of-the-art incinerator – UGX 900 million;
F, Research and development infrastructure – UGX 4.2 billion;
G, 500 KW solar plant with 1.2 MW storage capacity – USD 560,000;
H, Masks factory – USD 500,000.
“The funds have also supported infrastructure development, including roads and accommodation at the Nakasongola Military Industrial Complex,” stated Minister Kiryowa.
The Minister stated how the Joint Ventures have contributed to the technology and skills transfer, development of local industrial capacity, employment creation, payment of taxes, local procurement of raw materials, development of local markets, export promotion and import substitution.
He said that these Joint Ventures have also enabled NEC to leverage private-sector and international expertise and investment while utilising NEC’s available land, infrastructure and other assets.
The overall objective is to build productive capacity and strengthen NEC’s ability to generate resources to support its statutory mandate.
The Minister concluded by emphasising that the Joint Venture model provides NEC with a mechanism for combining its land, infrastructure, market access and institutional capacity with the technology, expertise and financial resources of strategic partners.
“Through this model, NEC has established ventures in both defence-related and civilian sectors, facilitated technology and skills transfer, supported local production and employment, and generated resources that have been reinvested in other productive projects,” stated the Minister.
Minister Kiryowa pledged that the Ministry of Defence and Veterans Affairs will continue to exercise oversight on NEC to ensure that its commercial activities remain aligned with its mandate and contribution to national development, while supporting the operational and welfare requirements of the Defence Forces and Veterans.
