Members of Parliament have questioned how textile firm Nytil was awarded a contract to produce and supply facial masks across the country.
"Now that government is to provide masks to Ugandans, I seek to know how ordinary companies and young people making masks can benefit.
In his address on Monday, President Museveni said it will take Nytil two weeks to manufacture masks for all Ugandans above six years of age.
It was, however, sold in 1996 to Southern Range Nyanza Limited, a private company owned by Mr Kishor Jobanputra, who is also a member of the National Response Fund to Covid-19 formed by President Museveni on May 3.
Government had threatened to cancel the VAT concession in the 2014/15 budget before Nytil ran to Parliament and threatened to lay off more than 3,000 employees directed employed by the company.