Zawadi Bus Company Seeks Shs1.7 Billion Presidential Bailout Amidst Financial Crisis

Zawadi Services Ltd, a vital transport provider in Uganda’s Greater Madi sub-region, is facing imminent closure and has formally requested a Shs1.7 billion bailout from President Yoweri Museveni. The company’s financial distress, exacerbated by the impact of COVID-19 lockdowns in 2020 and 2021, threatens the livelihoods of 42 employees and the continuity of essential regional transport services.

The appeal follows a directive from Stanbic Bank to halt operations and sell off remaining assets to recover a substantial loan. Zawadi Services took out a loan of Shs2.857 billion in 2019 to purchase eight buses. However, accumulated interest and arrears during the period of restricted operations significantly increased the debt burden.

Despite repaying over Shs5.7 billion, the company states it still owes approximately Shs1.7 billion in principal, exclusive of VAT. To mitigate its debt, Zawadi sold seven of its buses last year, but the bank’s demand for the remaining vehicles leaves the company with a substantial deficit.

The potential closure has sparked concern among employees like Christine Aber, an accountant for 15 years, and Lawrence Logi, a booking clerk with 18 years of service, who rely on the company for their income and to support their families. The company also highlighted its past contributions, including providing free transport to the Mulago Cancer Institute during the COVID-19 lockdown and supporting transportation for presidential events.

Zawadi Services is requesting that the Shs1.7 billion be provided as a bailout, with the associated VAT waived. This intervention, they argue, would enable them to settle their bank debt, clear outstanding staff salaries and NSSF obligations, resume operations, and continue contributing to the regional economy and transport sector.

Source: https://nilepost.co.ug/news/370735/zawadi-bus-company-appeals-to-museveni-for-shs1-7bn-bailout