MPs block Shs 3bn COVID-19 stimulus package to Serena hotel

The parliamentary trade committee has stopped the payment of a stimulus package of Shs 3 billion to Kampala Serena hotel by Uganda Development Corporation (UDC).

Serena hotel is owned by a consortium that includes Tourism Promotion Services (TPS), a division of the Aga Khan Fund for Economic Development, National Social Security Fund (NSSF), and Proparco, a French property investment company.          

The hotel had been granted a payment of Shs 3 billion in October last year as a stimulus package after its operations were hit by an outbreak of COVID-19 and subsequent lockdowns that paralyzed the hospitality industry.

According to UDC, a government entity that promotes industrial and economic development, the funds were approved after a request from Nile hotel, the holder of the hotel on behalf of the government.

However, the UDC has failed to justify the need for the package when its members appeared before the trade committee early today. Mwine Mpaka, the chair of the committee had asked the UDC officers to explain who approved the stimulus, why the money was being given to Serena, and how it would be paid back.

The UDC team led by the director of finance Christine Zaake indicated that they were giving the stimulus package to Serena as a loan to be lent to their subsidiary; Nile hotel. Zaake said that the Shs 3 billion is part of the Shs 100 billion that the board approved for the stimulus package.

Andrew Mugerwa, the director of investments at UDC, explained that they supported Serena hotel because the hotel’s payments to the government through Nile hotel were affected as a result of the slump in business over the last two years.

He added that the package was expected to revive their operations. Mpaaka guided that the money should not be paid, a decision which was supported by several committee members, who also tasked the team from UDC to bring with evidence of minutes and written requests on how the people and companies who get stimulus packages were selected.

According to a source from UDB, they were in the process of reconsidering the loan to Serena hotel already, since the lockdown period was relaxed and the hotel industry is catching up. 

Among the list of those who were due to get the stimulus package are; Luwero Fruit factory, Mabale Tea factory, Moroto Cement factory, Atiak Sugar Works, Busoga Cane growers, Acholi Bur Pader Catholic Archdiocese, Yumbe Mango factory, Mpanga tea factory among others.

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