The unfolding saga involving Prism Construction, the Ministry of Education and Sports (MoES), and Equity Bank Uganda has laid bare serious dysfunctions within Uganda’s public financial governance. At the center of the storm is a UGX150 billion commercial loan taken by businessman Kennedy Losuk Lokule from Equity Bank to develop the Emin Pasha Lake View Residence, a luxury property in Muyenga.
Lokule, through his company Prism Construction, had also undertaken a government contract to build a technical college in Bushenyi under the MoES. However, the government has failed to pay UGX8.4 billion owed to Prism for the completed works. This failure has triggered a liquidity crisis for Lokule and placed Equity Bank in a precarious position as it seeks to recover its funds through a legal foreclosure process.
Under normal circumstances, a bank’s decision to recover its loan through court-sanctioned foreclosure would be uncontroversial. But in this case, political interference has taken center stage. President Museveni has directed the Attorney General to stop the auctioning of Lokule’s Emin Pasha property, a move that contradicts judicial authority. Finance Minister Matia Kasaija and presidential advisor Odrek Rwabwogo have also reportedly exerted political pressure on the bank, urging it to delay enforcement.
This development sets a dangerous precedent—one where government entities not only default on their financial obligations but also weaponize political influence to shield defaulters from consequences. It creates a troubling image: a private bank, acting within its rights, is being coerced into absorbing the government’s own failure to pay its contractor.
The broader implications are alarming. Ministries across Uganda are sitting on trillions of shillings in unpaid arrears to service providers. Rather than settling these verified claims in an orderly, systematic manner, government officials have resorted to political favoritism and selective bailouts. This paves the way for rent-seeking and reinforces the belief that politically connected individuals are more likely to receive compensation than those who follow due legal process.
Such conduct threatens the integrity of Uganda’s credit environment. If political pressure can override lawful contracts and judicial processes, banks will inevitably respond by tightening credit access or raising interest rates to hedge against increased risk. This, in turn, stifles investment and hampers economic growth.
The case also raises a fundamental question of fairness. Equity Bank’s loan to Prism was financed using depositors’ money. By discouraging loan recovery through political interference, the government is essentially asking the bank—and by extension, Ugandan savers and future borrowers—to bear the cost of its own negligence.
If the government believes Prism Construction was genuinely shortchanged, the solution is straightforward: pay the UGX8.4 billion arrears owed to the company. This would have prevented the entire crisis in the first place. What is unacceptable is turning the commercial consequences of a state default into a private bank’s burden.
In the long run, Uganda’s economic stability depends on the rule of law, predictable enforcement of contracts, and a clear separation between political discretion and commercial justice. Undermining these principles not only jeopardizes the credibility of Uganda’s banking sector but also weakens investor confidence in the broader economy.
