The finance ministry has ordered a governance audit of the Uganda National Mining Company (UNMC), as a rift between the state firm’s executive management and its board slows the work it was set up to do.

Ramathan Ggoobi, the finance ministry’s permanent secretary, instituted the audit on behalf of one of the company’s two shareholder ministries, insiders told this website. Some members of the executive committee have avoided appearing before the audit panel. The energy ministry, the other shareholder, has kept its distance.

The turmoil means the government’s plans to harness mining for its Ten-Fold Growth Strategy may take longer. The strategy aims to expand Uganda’s economy to $500bn by 2040 and names mineral-based industrialisation as one of its four anchor sectors.

Insiders speak of maladministration by the executive management, led by Gerald Banaga-Baingi, the chief executive, and of disharmony between management and the nine-member board chaired by James Mukasa Sebugenyi. They also describe a toxic working environment at the company’s offices in Crested Towers.

Contracts have been awarded without proper contract-management structures, with no formally appointed contract managers and no management plan. In one instance, the company paid Shs76.2mn for goods and services, including air tickets, catering and personal protective equipment, without the required procurement files.

Hiring is another source of friction. At least 20 people are employed at the company without the proper qualifications, according to insiders, and two board directors have their children on the payroll. Insiders say staff have been hired through personal connections, bribery or favouritism rather than on their skills and qualifications, straining relations with the competent employees recruited on merit.

Two years after the company was set up, officials at the energy ministry say it is in turmoil and that the disharmony between management and the board is undermining its mission.

In an internal memo dated 1 July 2026, the executive committee scolded the board. “The Board of Directors is politely reminded to constantly recap the importance of complying with the Corporate Governance Water Fall,” the memo said, adding that board committees should “execute duties that are under their TORs and uphold the independence and distinct roles thereof”.

“Failure to comply with the Corporate Governance Water Fall is a very serious corporate risk that results in Corporate Governance breaches and liability,” it said.

The memo followed a request from the board’s Finance, Investment and Administration Committee for information from the chief executive on the oversight of investments.

The company was registered in April 2024 and its board constituted the same month. Dr Banaga-Baingi, previously assistant commissioner for technical planning at the energy ministry, was recruited as its first chief executive, amid reservations about his ability to build such a company from scratch.

UNMC was set up under the Mining and Minerals Act 2022 to manage the government’s commercial stakes and participating interests in the mining sector. Before the law, mining was left to private companies holding exploration and mining licences.

The law allows the state up to 15 per cent free equity in a mining licence, and up to a further 20 per cent as paid equity. The company, co-owned by the ministries of energy and finance, holds these interests on the state’s behalf. Last year, however, it failed to secure the state’s 15 per cent free-carried stake in seven mining licences issued after the law took effect.

This is a developing story