City businessman Hassan Basajjabalaba has appeared before Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) to answer questions surrounding a disputed Shs140.487 billion Bank of Uganda guarantee linked to Haba Group of Companies.
The matter has come under renewed parliamentary scrutiny following its inclusion in the Auditor General’s report for the 2024/25 financial year. The amount, which dates back to a 2017 financial arrangement, remains outstanding and has raised questions over how the guarantee was issued and why recovery efforts have taken years.
According to information presented before COSASE, the Bank of Uganda issued letters of comfort to commercial banks to facilitate borrowing by Haba Group. The central bank previously explained that the guarantee was provided on behalf of the Government following instructions from the Ministry of Finance.
The inquiry is seeking to establish the precise obligations of Haba Group, the Government and Bank of Uganda under the arrangement, as well as the circumstances under which the guarantee was approved.
Bank of Uganda officials, led by Governor Michael Atingi-Ego, have already appeared before the committee to respond to questions arising from the Auditor General’s report. Officials informed MPs that the matter dates back several years and that Bank of Uganda, through its legal representatives, has been engaging Haba Group over possible ways of resolving the outstanding obligation.
The committee has also questioned the adequacy of steps taken to recover the money, including whether sufficient due diligence was conducted before the guarantee was issued and what security, if any, was obtained.
COSASE Chairperson Muwada Nkunyingi stressed that the committee is still at the investigative stage and intends to examine the responsibilities of all parties before reaching its findings. Parliament says the inquiry is focused on establishing what happened to the funds and why the exposure has remained unresolved for so long.
The financial dispute is connected to earlier compensation arrangements involving Basajjabalaba and companies associated with Haba Group following the cancellation of leases and management agreements involving several Kampala markets. Court records and parliamentary discussions have previously linked those arrangements to government compensation and subsequent borrowing backed by guarantees.
COSASE’s investigation is expected to examine correspondence between Bank of Uganda and the Ministry of Finance, the contractual terms of the guarantee, the role of the commercial banks involved and the recovery measures undertaken since 2017.
The committee’s findings could provide further clarity on how the Shs140.487 billion exposure arose and which parties remain responsible for settling the outstanding amount.
