Mary Karugaba
1 December 2008
Kampala — THE Government will borrow $200m from the World Bank to implement the Poverty Eradication Action Plan (PEAP).
Finance minister Dr. Ezra Suruma told the Parliament on Monday. The fund, in form of budget support, will finance priority programmes.
He said the credit forms part of the resources budgeted for the 2008/9 financial year and brings the total amount borrowed for PEAP since 2001 to $860m.
The priority programmes include primary education, primary health care, rural feeder roads, hydro power generation, water and sanitation, agricultural modernisation and the promotion of enabling environment for rural development.
Suruma said the credit will also improve the quality of service delivery through reforms covering financial management, pay reforms, procurement, monitoring and evaluation, transparency and accountability.
"The provision of these resources by donors clearly demonstrates the confidence they have in the Government's pro-poor and growth agenda," he said.
For the last decade, the Government has been spending more money due to the increased demand for public services.
According to Suruma, over the last five years, the real economic growth rate has averaged 7.9% per year due to robust growth in industry and service sector.
He pointed out that during the period, the net enrolment rate in primary increased from 86.7% in 2002 to 92% in 2008 surpassing the PEAP target of 90% for the same period.
In the water and sanitation sector, Suruma said the percentage of people with access to safe water in rural areas increased from 55% in 2002 to 63% in 2007, while in urban areas, it increased from 65% in 2002 to 71%.
"There is no doubt that public expenditure in the period under review has had a profound impact on the Ugandan economy. For example, the percentage of the rural households accessing electricity increased from 3% in 2002 to 11% currently," he observed.
MPs Christopher Kibazanga (FDC), Nandala Mafabi (FDC) and Magaret Kiboijana (NRM) proposed that the loan be channelled to the health sector.
"The sectors for the $200m are too many to make an impact. Let us refocus the loan so that its impact is felt," said Kibazanga.
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