By Franklin Draku
Government has tabled before Parliament a request to borrow up to $650 million (Shs2.9 trillion) from different financial institutions to finance part of its budget.
According to a request presented by Mr Matia Kasaija, the Minister of Finance, Planning and Economic Development, government will borrow up to $295 million (Shs1.3 trillion) from the Islamic Development Bank and $30 million (Shs136.2 billion) from the Organisation of the Petroleum Exporting Countries (OPEC) fund for international development for the upgrading of national road project in Uganda.
Mr Kasaija said the government will borrow another $325 million (Shs1.5 trillion) and receive a grant of up to Standard Drawing Right of $19.5 million (Shs88.5 billion), equivalent to $25 million (Shs113.5 billion) from the International Development Association of the World Bank Group to finance the Uganda climate-smart agricultural transformation project.
If approved, Uganda’s public debt will increase to more than $24 billion (Shs108.9 trillion) putting the country into further debt distress. Currently, the country owes more than $13.6 billion (Shs61.7 trillion) to external creditors accounting for 31.3 percent of Gross Domestic Product (GDP), while domestic debt amounts to more than $8.4 billion (Shs38.1 trillion), 19.3 percent of GDP, according to the International Monetary Fund (IMF).
IMF says while debt increased substantially during the Covid-19 pandemic, it was already on an upward trend previously, mainly driven by increased borrowing to finance the country’s development needs.
Deputy Speaker Thomas Tayebwa urged the Committee of National Economy charged with the responsibility of scrutinising the request not to delay the process and submit the report with the urgency it deserves.
“The request is referred to the Committee on National Economy and the relevant sectoral committees as per section 155 of our rules of procedure and please report within time. This business of saying we have delayed because of benchmarking and all the other things must not happen,”he said.
However, Mr Elija Okupa, the Kasilo County MP, wondered why the minister did not name the roads that will be upgraded under the loan request.
“We have had outstanding issues with some of the roads which need upgrading and the President has kept promising, like Kumi-Serere-Kasilo-Kagwara road. Serere-Soroti Road was on the programme but was later removed. Apart from that, there are also roads in other regions. It is very important that all the regions must benefit equally,” he said.
However, Mr Tayebwa said the finer details will be dealt with by the committee which will then report to the Parliament.