Imagine Posta Uganda, formerly Uganda Post Limited, as a traditional service provider—delivering mail, packages, selling stamps, and offering agency banking in remote outposts.
It’s not glamorous, but it remains an integral cog in Uganda’s infrastructure. But importance doesn’t always translate to profitability.
In the year ended June 2024, Posta earned UGX18.55 billion in operating revenue, mostly from core activities like mail delivery, courier services, and agency functions.
On paper, it reported UGX18.11 billion in expenses. However, the Auditor General put the actual figure at UGX17.33 billion, revealing a UGX780 million gap.
The 4.3% variance raises eyebrows: Were some costs overstated? Misclassified? Or was this a subtle attempt at income smoothing to project steadiness over time?
Whatever the cause, it’s a transparency concern—even if it improves the bottom line.
Still, Posta closed the year with a UGX103.7 million surplus. Technically, that’s a profit. But it’s a steep drop from the UGX397 million surplus in the prior year.
A deeper look shows why: the cost of sales surged by 129%, from UGX2.07 billion to UGX4.75 billion.
The rise is linked to non-negotiable expenditures—stamp stock, security accessories, and a hefty UGX1.2 billion in airline conveyance.
These aren’t frills—they’re the price of keeping a legacy service afloat in a changing world.
That’s Posta’s dilemma: modernize or maintain. While global postal services are racing toward digital logistics, Posta must still fund postbags, stamps, and physical networks—expensive artifacts of a system struggling to stay relevant.
Fragile profit position
Posta walks a financial tightrope — revenues barely cover expenses, and profits, though technically present, are fragile.
Last year’s modest UGX100 million surplus, verified by government auditors, hints at stability but not success.
The company may not be haemorrhaging money, but it’s certainly not ready for any major shocks either.
On paper, it’s a financially sound operation. But scratch the surface, and the numbers begin to whisper — not with clarity, but with contradictions.
At the heart of its financial story is a paradox: a legacy organisation balancing on break-even.
The UGX780 million discrepancy in reported expenses points to gaps in either accounting accuracy or expenditure tracking — perhaps unrecorded cost-cutting, poor budgeting, or overstated operational costs.
These kinds of mismatches may not crash the enterprise, but they erode transparency — a critical trait for any government-owned entity, especially one tasked with delivering both public service and financial discipline.
Even the UGX297 million in “other gains” could not be verified by auditors from the Auditor General’s Office.
Whether from asset sales, interest income, or other windfalls, the lack of documentation suggests weak internal controls.
It’s a classic symptom of a system that functions but doesn’t always know why or how.
A deep crater of historical losses
Posta holds UGX6.39 billion in negative retained earnings — evidence of a history where spending consistently outpaced earnings.
While the small profit in the most recent year is a step in the right direction, it’s more symbolic than transformative — like tossing a coin into a crater and hoping it fills.
Yet the company isn’t insolvent. With UGX19.49 billion in share capital — the investor and government’s equity injection — Posta has a strong cushion.
This investment is what keeps the lights on, offering resilience in the face of weak earnings.
Then comes the eye-catching figure: UGX75.07 billion in “other reserves.”
Though vaguely categorized, these likely represent revaluations of legacy infrastructure — land, buildings, post offices.
Assets that may carry high book value but little relevance to daily revenue generation.
In essence, Posta is asset-rich but income-poor.
Contradictions in figures
Financial assets were stated as UGX64.99 billion by Posta but trimmed to UGX62.95 billion by government auditors — a UGX2.04 billion variance that raises questions about receivables, overvaluation, or internal auditing gaps.
Non-financial assets — land, post offices, and vehicles — were valued at UGX50.54 billion, highlighting a robust physical footprint.
But like many government parastatals, much of this infrastructure remains underutilized.
On the liability side, auditors reduced the company’s obligations from UGX27.32 billion to UGX25.32 billion.
This UGX2 billion drop likely comes from reversed provisions or overstated debts — a positive for solvency.
All told, Posta’s net worth stands at UGX88.17 billion — a figure confirmed by both internal and external audits, with only a negligible difference of UGX40 million.
The picture? A company that’s financially sound but operationally underwhelming.
The valuation puzzle
Where things get more complicated — and concerning — is asset valuation. Under international accounting standards (IAS 16.31), revalued assets must reflect fair market value.
But Posta’s asset figures suggest a troubling disconnect.
In November 2023, the Chief Government Valuer (CGV) pegged the value of 36 properties and 26 acres of the company’s land at UGX93.707 billion.
Yet, curiously, the financial statements list non-current assets at UGX93.817 billion — slightly higher, and even more perplexing, lower than the pre-valuation figure of UGX94.774 billion reported in June 2023.
That nearly UGX1 billion slip remains unexplained.
To complicate matters further, the CGV’s exercise excluded untitled land and properties with expired leases — meaning the revaluation was incomplete.
And even more glaring: the iconic Clock Tower Post Office, valued at UGX5 billion, wasn’t included in the asset register at all. A flagship property is simply missing from the books.
This hints at more than just sloppy accounting. At best, it’s poor coordination between valuers and accountants.
At worst, it could be a material misstatement — and a governance red flag waving in plain sight.
“I advised management to consider reviewing the asset base of [Posta] as a company and have a full census and documentation for all the company’s properties and eventual full valuation to reflect a true value,” Auditor General Edward Akol, noted in an audit report.
A property mayhem
Posta appears to be caught in a quiet tug-of-war — not over mail delivery, but real estate.
And like many unresolved family inheritances, the ghosts of the defunct Uganda Posts and Telecommunications Corporation (UPTC) are still haunting the balance sheet.
Back in 2021, Posta’s Managing Director wrote to the Auditor General, flagging a dispute with Uganda Telecom (now UTCL) over who owns certain properties, including some post offices and masts.
He argued that, based on the 1997/98 Communication Act, properties should have been divided up by “nature of business.” His contention? Post offices should logically belong to Posta, not a telecom.
This wasn’t just about ownership rights — there was money on the line. Posta’s managing director claimed UTCL owed over UGX4.5 billion in rent for occupying contested spaces.
That’s not pocket change. The receivable was even listed on Posta’s books for years. But somewhere along the way, the noise stopped.
Management went silent. The dispute disappeared from the financials without a whisper of explanation.
Fast-forward to today, and Uganda Telecom has transformed into UTEL. Yet the financial statements of Posta remain eerily quiet on the matter.
No disclosure of the UGX4.5 billion receivable. No indication of a write-off. And no clarification on whether the contested properties still sit on Posta’s books like awkward in-laws refusing to leave.
So, what’s the implication? Twofold. First, there’s a transparency gap. Omitting such a long-running dispute — and a substantial receivable — leaves a big question mark over the integrity of the financials.
Second, if the assets in dispute are still being reported without confirmed ownership, the value of non-current assets could be materially overstated.
In short, Posta may be showing assets that legally aren’t fully theirs, while sweeping a UGX4.5 billion receivable under the rug. That’s not just a missed disclosure — it’s a trust issue.
“These delayed payments are risky—they could lead to court cases or extra fines if not settled in time,” Akol warned, noting that he had advised Posta to bring the matter to the attention of the relevant stakeholders, including the board and shareholders, for a final resolution.
Heavy payables
Posta is already struggling with huge payables, which money the business owes to its suppliers or creditors for goods or services it has received but hasn’t paid.
According to Posta’s Finance Manual, it’s the Head of Finance’s job to ensure that all liabilities are recorded and settled promptly.
Yet, the latest financial statements show that Posta still owes UGX19.51 billion as of June 2024 financial year— a slight drop from UGX20.42 billion the previous year.
Management attributes the reduction to a “deliberate effort” to live within their lean revenue budget, while paying off some critical debts.
That’s commendable, but even with that effort, UGX19.5 billion in outstanding liabilities is no small matter — especially for a parastatal struggling with property disputes, valuation gaps, and a revenue pinch.
Here’s the problem
High payables come with risks, especially if payments are delayed, and Posta knows this.
Litigation from creditors, penalties, and reputational damage could be lurking just around the corner, and Akol acknowledged this in his audit report.
Without a clear roadmap to bring this liability burden down meaningfully, this looks less like financial discipline and more like slow-motion crisis management.
So yes, the figure moved — but not enough to change the narrative. Posta’s liabilities are still a storm cloud hanging over its already fragile financial structure.
A cash flow chokehold
An independent assessment of Posta’s financials glaringly shows that the parastatal seems to be sending out invoices, but not always collecting the mail back
Posta’s own Debt Management Policy is crystal clear: sundry debtors should pay up within 30 days. For terminal dues, they’ve got up to 90. And as for rent and prepaid postage? Zero credit terms. Cash on delivery.
But when you flip through the financial statements, it tells a different story. Posta was still chasing UGX14.71 billion in receivables by June 2024.
That’s down from UGX15.78 billion the previous year — a modest UGX1.3 billion drop — but still a massive pile of unpaid money.
Of that, UGX4.52 billion is unpaid rent from tenants on investment properties.
That means, by its own rules, Posta is failing to collect money it was supposed to have in the bank, sometimes months ago. And for a parastatal already stretched for cash, this kind of delayed income is more than an inconvenience. It’s a cash flow chokehold.
The longer these debts linger, the more likely they are to rot into bad debts. That’s potential financial loss.
Posta’s management blames tough economic times, and while it’s true the economy has been tight, the point of policy is to create discipline regardless of market mood.
So, what does this say?
Posta’s receivables are less about timing and more about enforcement, something that risks bleeding its liquidity, risking further underperformance — and possibly even losses — from what is effectively money left on the table.
Akol knows this and his advice is for Posta “to enforce its debtor’s management policy to guide the process of debt evaluation and what can be allowed to ensure proper management and recovery of debts, and ensure timely collection of rental incomes.”
Does it have the man power?
One can argue that if policies are there and the company’s mandate is there, what’s failing its management?
Posta’s Human Resources (HR) Manual notes that filling vacant posts should follow a structured process – the heads of department identify the gaps, the head of HR packages them with job descriptions and sends them to the appointing authority. That’s the theory.
In practice? Only 151 out of 251 positions are filled. That’s just 64 percent staffing, leaving a 36 percent vacuum—and this isn’t just about interns or junior clerks.
Critical roles like manager of security and investigations, head of mail, and finance manager.
Akol knows that it’s hard to deliver on a national mandate when your house is understaffed—and when the empty rooms include those responsible for your cash, your core business (mail), and your security, the risk compounds.
Irene Mwoyogwona: Beyond the Numbers – How Pride Bank's Award-Winning CFO Combines Profitability and Social ImpactJames Arinaitwe, Posta’s MD says there’s an ongoing staff review to align with the strategic plan, and any hiring will be based strictly on need and affordability. Fair enough.
But until that plan is complete—and the board signs off—the current workforce remains overstretched and under-resourced.
This gap isn’t just administrative; it’s strategic drag. Every day key posts go unfilled is a day Posta moves slower, delivers less, and falls further behind its mission.
The irony? In a company responsible for delivering messages, one of its loudest messages right now is: We’re not fully staffed to deliver.
Doing its mandate?
A vivid look into the company’s actual performance in comparison with its planned activities and outputs for the year ended December 2024 as well as its mandate shows something quite worrisome.
If Posta were a student in a civics class on national service, the teacher might scribble this in the margin: “Knows the syllabus, but turns in assignments half-done.”
According to a recent government audit, Posta’s performance against its legal mandate—defined under the Communications Act Cap 103—is a curious case of strategic intentions meeting operational inertia.
Over the past three years, the company has partially implemented most of its strategic goals and outrightly missed others.
The result? A legacy institution seemingly stuck between yesterday’s relevance and tomorrow’s potential.
Take, for instance, its mandate to rationalize existing business lines and diversify into low-hanging opportunities to improve profitability.
This is essentially the bread and butter of modern enterprise strategy: trim what’s outdated, double down on what works, and innovate around the edges.
Posta’s execution? A government audit says it “understudied competitors” and “reviewed bottlenecks”—not quite a transformation, more of a boardroom brainstorm that never left the whiteboard.
In a world where digital couriers and mobile wallets are devouring market share, this slow-motion response is like bringing a typewriter to a startup pitch.
Next is the aim to increase market share across product lines. Again, Posta did the homework—studying the “Key Success Factors” of market leaders—but didn’t sit the exam.
Knowing what makes DHL or MTN successful is useful, but without bold implementation, such insight remains academic. The real challenge here is execution.
An assessment into its documentation shows that Posta behaves like a student who buys all the textbooks but never takes the final test.
The cost? Market stagnation in a sector where agility wins the race.
On the human capital front, the mandate to attract, develop, and retain a productive workforce has also seen only partial delivery.
The strategy? Borrowing a leaf from peer postal entities. Admirable. But leaves don’t plant themselves.
A motivated workforce requires more than borrowed ideas—it needs investment, culture change, digital upskilling, and visionary leadership because even the best strategies wilt on the vine.
Then comes a bigger red flag: The failure to build a strong financial base to meet operational and project development budgets. Unlike the other areas, this one hasn’t been implemented at all.
No clear capital plan for real estate projects and no public-private partnerships concluded.
In an era when even cemeteries are being turned into revenue-generating parks, Posta is sitting on prime real estate and infrastructure—but doing little to turn it into liquidity.
It’s like owning a gold mine and using it as a picnic site.
The story doesn’t get much better with ICT. Despite having a mandate to enhance the use of ICT for efficiency and service delivery, a government audit reveals a laundry list of to-dos that remain untouched.
From connecting post offices to the National Backbone Infrastructure, to establishing a disaster recovery site, introducing e-services, creating a national postcode system, and integrating systems with URA and Sage—almost all have been left dangling.
This isn’t just oversight; it’s a missed leap. In today’s world, postal services that fail to digitize may as well be writing themselves out of the future.
Worse still, some plans read like science fiction in a vacuum—real-time client notifications, AI-driven web operations, and digital kiosks, without even stable internet or clean power for primary data centres.
“Non-implementation of mandated activities may lead to non-attainment of the company’s planned strategic objectives. Management stated that the inability to complete implementation of planned activities was caused by budget constraints. Management further explained that the activities not completed shall be rolled over to the next financial year for implementation,” he adds.
Posta is a classic case of a legacy institution with structural potential but functional paralysis.
The pieces are there: Nationwide infrastructure, legal backing, brand familiarity, and government ownership, but the will—or capacity—to execute remains weak.
A domino
A look into Posta’s financials, mandate and work, reveals something both familiar and frustrating in Uganda’s public sector: plans drawn in ink but implemented in vanishing ink.
Posta had a budgeted dream worth UGX19.999 billion, but government’s wallet only coughed up UGX18.557 billion, leaving a UGX1.44 billion shortfall.
That’s a 93 percent performance on paper—but in execution, it’s those missing shillings that tell the more compelling story.
The Shs1.44 billion not received was earmarked for 25 specific initiatives that, had they been funded, could have nudged Posta closer to relevance in a digitized world, the company’s official documentation shows.
These weren’t vanity projects either, they were essentials: connecting post offices to the National Backbone Infrastructure, updating the company website, integrating systems (Eposta, IPS, and Sage), launching an e-commerce platform, and even something as operationally basic as installing water and Yaka metres for tenants.
Some of these are small-ticket items—just UGX5 million-UGX9 million each—but together they paint a picture of a company trying to modernize and clean house, only to be told: “Not this year.”
Even more telling is that customer-facing improvements, like conducting satisfaction surveys or implementing customer retention incentives (notably UGX67 million, the single largest unfunded line), were shelved.
That’s like a restaurant deciding not to check whether its customers are happy or why they’re not been coming back—and then wondering why revenue’s are drying up.
Posta knows it needs to compete for attention and relevance, but without these funds, it’s trying to enter a digital marathon with a sprained ankle and outdated shoes.
What’s also concerning is that ICT-related projects dominate the list of unfunded priorities. From updating the ICT policy to operationalizing Community Information Centres and enhancing tracking capabilities, these efforts aren’t luxuries—they’re lifelines.
In a sector where technology is the engine, Posta is trying to race ahead with half a tank.
The funding shortfall also blocked practical, operational upgrades—like renovating the Postel building and implementing an approved training plan, something that suggests a disconnect between high-level strategic intent and budget execution.
A solid building, well-trained staff, and digital infrastructure form the backbone of service delivery.
Denying funding to all three simultaneously is like removing the wheels, fuel, and steering wheel from a car—and then expecting it to drive.
Even worse, some activities sound like damage control for long-standing institutional issues. For example, the failure to fund repossession of encroached Posta property or recovery of costs from defaulting tenants hints at deeply rooted governance lapses.
If you can’t secure your own property or enforce tenancy, then what foundation is left to build on?
And while a government audit notes that 70 percent of the actual receipts were audited—covering salaries, admin, and operational expenses—the majority of these were routine, recurring costs. That’s payroll, finance charges, and overheads.
In other words, Posta is keeping the lights on, but not moving the needle, something that’s more like surviving, not transforming.
Bothered owners
In November 2024, Parliament’s six-member Ad-hoc committee chaired by Napak Woman MP Faith Nakut uncovered troubling patterns in the operations of Posta.
During engagements with stakeholders—including the Uganda Communications Commission (UCC) and the ICT Ministry—the committee learned that Posta’s management and board had been approving salary increases despite the organisation’s precarious financial position.
One of the more startling revelations was that Posta had accumulated UGX1.7 billion in unpaid license fees dating back to 2017. This backlog, officials said, was stifling operational efficiency.
Some lawmakers even floated the idea of shutting down the postal body.
But the plan was quickly tempered by the complexities of international obligations—Posta Uganda operates across borders and is registered with the Universal Postal Union, which imposes strict continuity standards for designated national couriers.
The committee also found that the company owed UGX1.2 billion in rental tax and another UGX1.4 billion in value-added tax (VAT) arrears to Uganda Revenue Authority (URA).
Compounding matters, a promised UGX15 billion capital injection from the ICT Ministry was never remitted.
That figure has ballooned over the years—having stood at just Shs5.5 billion in 1998, according to official government records.
ICT State Minister Godfrey Kabbyanga Baluku defended the ministry’s position, saying, “We submit capital requests to the Ministry of Finance every year, but the funds are never released. It’s unfair to blame Posta for underperformance when it’s not being capitalised.”
At the time, Posta was 99 percent owned by the Ministry of Finance, with the Ministry of ICT holding a 1 percent stake.
However, sources say that late last year, government signed a deal with an undisclosed private investor, diluting its ownership in the process.
As it stands now, the investor holds a 60 percent stake, while the Finance and ICT ministries retain 24 and 16 percent, respectively.
Among the aforementioned committee’s concerns was a controversial upward revision of board remuneration.
Four members of the board were former Members of Parliament. “One of the key issues we found was a weakness in management,” said Industrial Division Mbale MP Karim Masaba in November 2024.
“In the last two years alone, the organisation has taken out over UGX2 billion in overdrafts—mainly to cover board remuneration. That means they’re borrowing to raise their pay without any real income to support it.”
By policy, board remuneration is proposed internally and, upon justification that funds are available, is approved by the ICT Ministry.
Multiple high-level meetings have been held in recent months to map a way forward.
Some government officials argue that if the company continues in its current state, shareholders must make a strategic decision about its future.
“If Posta were to collapse, its universal postal obligations would fall to the private sector, which isn’t equipped to handle the full burden,” said Abdul Salam Waiswa, head of legal affairs at UCC. “That’s why we’re trying to support Posta to meet both domestic and international obligations.”
Despite being a minority shareholder, the ICT Ministry believes Posta has untapped potential—if only it gets the financial lifeline it needs.
UCC executive director Nyombi Thembo summed it up: “Re-engineering Posta will require massive capital, and government alone can’t do it. If they ask us, we’ll say: Yes—the Post Office still matters.”
Posta isn’t just a struggling operator—it’s a case study in how public assets can be drained in silence, cloaked in boardroom rituals and shadowy restructuring.
Whether it’s still a utility, a shell, or someone’s real estate proxy, one thing is clear: without transparency and teeth, even the loudest calls for reform will echo through empty accounts.
The efficiency problem
Posta’s latest financials reveal a company grappling with an efficiency problem: it owns significant assets but earns too little from them.
The Return on Assets (ROA) dropped from 3.36 percent in 2023 to 1.24 percent in 2024—far below the 5% benchmark typically used to assess asset profitability.
This signals weak returns from the company’s asset base and points to inefficient use of resources, which management attributes to a continued global decline in demand for traditional postal services, old buildings that no longer command competitive rental rates such as Kampala Road Post Office, which fetches just $12 per square meter compared to $18 from newer buildings in the same neighborhood and constrained cash flow.
Posta’s liquidity has also deteriorated. The current ratio, which measures the company’s ability to meet short-term liabilities using its current assets, fell from 0.92 in 2023 to 0.81 in 2024. This drop indicates potential strain in meeting day-to-day financial obligations.
The reduction stems primarily from a decline in current assets—from UGX23.15 billion to UGX19.67 billion—largely because of improved debt collection, which lowered receivables.
While that’s a positive sign for collections, the company still faces pressure to balance incoming and outgoing cash effectively.
In contrast, the company made modest gains on its long-term debt position. Posta’s debt ratio dropped from 25% to 23%, a positive signal indicating reduced reliance on borrowed funds.
Notably, the bank overdraft was trimmed from UGX1.6 billion to UGX994 million, something that reflects a deliberate effort to maintain low indebtedness and preserve financial stability.
In response to its challenges, Posta’s management is pursuing a multi-pronged strategy.
Digitization efforts are gaining traction; for instance, the digitized Post Office Address product generated UGX3.4 billion last year, with further growth expected through partnerships with agencies like Uganda Registration Services Bureau (URSB) and the Ministry of Lands.
Posta is also reintroducing Post Buses, with six buses projected to earn UGX4.2 billion annually by combining mail and passenger services.
Additional measures include aggressive marketing, debt collection, containment of costs, and asset refurbishment to enhance value.
To improve its ROA and cash flow, Akol advised Posta to focus on working capital efficiency, especially by accelerating collections and reducing liabilities.
The idea is to conider strategically divesting or redeveloping underperforming assets and prioritizing investments into higher-yield business segments.
Posta stands at a financial crossroads. While its debt profile is relatively healthy, its profitability and liquidity indicators paint a picture of stagnation.
