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Stephen Rwangyezi, the proprietor of Ntinda/Kisaasi-based Ndere Center Ltd, has once again cried out to his inspirer and role model President YK Museveni imploring him to leverage his power and help him rescue his hospitality, recreation and cultural tourism business which is on the verge of being auctioned by GoU-owned Uganda Development Bank (UDB). The detailed version of the video interview can be watched and viewed via this link: https://www.youtube.com/watch?v=ID-1AfIu1i0&t=877s.
Rwangyezi has been a big name investor in Uganda’s cultural tourism business since 1984 and the business that UDB is targeting to recover its Shs10.5bn loan comprises of 8.7 acres at the Ntinda-Kisaasi location, 7 acres on Bira Nakabugo hill along Mityana Road and another 17 acres on the shores of Kisoro’s Lake Mutanda. The Shs6.8bn was taken out in 2019 purposely to renovate and erect modern accommodation infrastructure at each of these three locations with foreign tourists, travelling to Uganda, being the major target.
What is intriguing though is that UDB is menacingly determined to foreclose and take over all these three property in pursuit of its loan which in the last roughly 5 years has since grown to Shs10.5bn. Much of this is arising from interest and penalties as the principal sum is barely Shs8bn. Rwangyezi says that UDB’s own valuation as of last year put the Kisaasi-Ntinda property (8.7 acres) alone at Shs33bn.
It had been valued at Shs22bn by the same UDB as of 2019. The land is a leasehold from the Kampala Catholic Church diocese which leased it to Ndere in 1999. Only 25 years have been utilized implying that it remains Rwangyezi’s for another 74 years, which makes it more less freehold. Much as the Bank officially puts the value of Kisaasi-based Ndere at Shs33bn, Rwangyezi estimates that a more objective and independent valuation could put the same at around Shs50bn.
He says his loan application was well assessed, involving his lawyer, financial experts and UDB’s too, which is why the bank was more than convinced that Ndere Center Ltd would comfortably pay back the money within repayment period of 10 years that was set. Interest was set at 12% and Rwangyezi, who had previously taken out loans from Stanbic and Bank of Africa and comfortably paid back, says there was 100% certainty he would pay back UDB’s money ahead of the 10-year repayment period expiry except that COVID unexpectedly struck.
In that case, the natural thing would have been to restructure the loan (as had been directed by the President in his televised addresses) and allowing him more grace period and repayment time but the UDB management refused and totally disregarded his pleas for clemency. Rwangyezi says he was surprised and shocked that a development bank, and moreover government-owned, would treat him that harshly. He says there was and there still is lack of understanding of how his type of business operates. He says because of COVID, he lost the opportunity to make money and pay back as had been anticipated. Business was closed in his case for the whole of 2020, 2021 and 2022 largely because of COVID-related complications.
That the building materials’ prices went up and he ended up spending almost twice more purchasing cement and other inputs to construct the intended infrastructure at Kisaasi, Bira and Kisoro. The locking down of the country prevented him and his construction consultants and supervisors from being able to regularly travel to Kisoro to ensure the builders did the right thing. In the end, much of the work had to be redone and thereby complicating things for Rwangyezi.
Going forward, Rwangyezi says the President (who personally has thrice been to Ndere Center as has his son Gen MK and wife Janet) should consider intervening and bailing him out though he is reluctant to compare or liken himself to others like Patrick Bitature or James Tumusiime whose tourism-related businesses the GoU has previously bailed out at the instigation of H.E.
He implores the President to generously extend a hand and treat the Ndere Center business leniently and with the appropriate understanding the way the Japanese government strategically approached the issue of Toyota vehicles’ manufacturer for the 20 years it endured of loss-making before crawling back to profitability.
Rwangyezi, who was aided to take out the loan by UDB sales person Dennis Kiiza guided by his credit supervisor called Sam and has previously met with and pleaded with Bank MD Patricia Ojangole to allow him more time but all in vain, proposes that there are three options from which the President can choose. These include the government directing UDB (which it 100% owns) to write off the loan or even coming in through UDC so that Ndere, going forward, becomes a Joint Venture business between him and government.
The other option is for the government to go through the Board and direct the UDB management to waive off the penalty and interest besides giving him a grace period of one year whereafter he can pay off the loan within the next 2 years. He says once that becomes the case, he doesn’t even need the entire remaining 5 years to pay off the loan to zero. Rwangyezi has for the last few days been out making noise through the mainstream newspapers but says he is yet to hear any feedback from the President or anyone else at State House. But he remains hopeful the President, being a lover of culture, will eventually come to his rescue.
He makes it clear he would ideally not like to burden the President by demanding that the taxpayer’s money gets used to bail him out as such-instead he prefers that the H.E uses his clout and government being the sole owner to get the UDB management waive off the interest and penalties besides allowing him a grace period of just one year and then be able to pay off everything to zero in the subsequent 24 months. He says in the last three months preceding UDB’s this week newspaper advert auctioning his properties, he had paid three installments totaling to Shs70m and the Ndere business has now recovered to the extent that he would have no problem continuing paying that way once the Patricia Ojangole-led management lets him to.
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