Uganda Stock Exchange suspends Umeme for 30days due to buyout disputes

The Uganda Securities Exchange (USE) has extended the suspension of trading Umeme Limited shares for another 30 days, now lasting until May 14, 2025.

This move follows a rising dispute between Umeme and the Government of Uganda over how much the government should pay Umeme at the end of its 20-year electricity distribution contract.

Initially, the USE had paused trading on March 31, 2025, for two weeks. But after Umeme officially declared a dispute and served the Ministry of Finance on April 11, the suspension was extended to protect investors from sudden changes in the market. The USE said this extension allows both sides to settle the matter peacefully, as stated in their agreement. If no deal is reached in 30 days, the matter will go to arbitration in London.

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The root of the conflict is the buyout amount. Umeme says the government owes them $234 million for investments they made in the electricity system. But the Auditor General’s report says the correct figure is much lower $118,385,603. This lower amount has already been paid by the government, but Umeme accepted it "without prejudice," meaning they still believe more is owed.

Adding more confusion, Parliament recently approved a $190 million loan from Stanbic Bank to pay Umeme. This was done before the special audit report was officially reviewed. The report has now revealed that the actual amount, according to audits, is just $118 million, which is much less than what Parliament approved.

Speaker of Parliament Anita Among confirmed the mismatch, saying, “Discrepancies on the figure supposed to be paid to Umeme... $190 million, $118 million is the final audit.” She announced that the audit report would be presented to Parliament, adding, “We pray for better services as UEDCL takes over.”

The situation has raised major concerns. Both the Auditor General and the Committee on National Economy had warned against approving the loan before confirming the correct buyout amount. The Committee even told Parliament to pause the process until the numbers were clear.

But the government, facing a tight deadline, went ahead with the loan to beat the March 31 end of the concession.

The State Minister for Finance, Henry Musasizi, argued that the buyout would help reduce electricity costs and improve service. He warned that delaying could lead to “hefty penalties.”

Umeme’s 20-year contract ended on February 28, 2025. Now, the Uganda Electricity Distribution Company Limited (UEDCL) is in charge of power distribution. Umeme must keep updating the Stock Exchange with reports during the suspension.

As things stand, the fate of the buyout payment and how it affects investors, government trust, and the future of public-private partnerships hangs in the balance. All eyes are now on the Parliament and the potential arbitration process in London.