Uganda: Debt - MPs Approve Shs2.4 Trillion Loan

During its last sitting on May 11, the 10th Parliament approved loans worth Shs2.4 trillion, adding to Uganda's escalating debt burden.

These loans include Shs1.4 trillion (€327 million) for the refurbishment of the 273km Kampala-Malaba Meter Gauge Railway, Shs853.2 billion ($240 million) to support the Uganda Inter-Governmental Fiscal Transfers (UGIFT) programme for the construction of schools and improvement of health facilities, and Shs112 billion ($31.64 million) to finance revenue shortfalls occasioned by the Covid- 19 pandemic.

The MPs also passed a supplementary budget of Shs695 billion to facilitate government pending business through the one and a half remaining months of the 2020/2021 Financial Year.

The Uganda National Oil Company (UNOC) will take the lion's share of Shs481 billion to pay for Uganda's shares in the pipeline while the Uganda National Roads Authority will receive Shs101.9 billion for road projects.

Other sectors to share in the supplementary are State House, Ministries of Finance and Local Government.

State Minister for Planning David Bahati moved all the motions amid protest from a section of the members from across the political spectrum.

Uganda's total public debt hit a record Shs65.82 trillion as of December 2020, up from Shs49 trillion in 2019.

Members questioned why government was borrowing money for the meter gauge railway, yet Ugandans had been promised a Standard Gauge Railway (SGR).

Mr Geoffrey Macho, the Busia Municipality MP, said while countries like Kenya and Tanzania already have the SGR in place, Uganda is working retrogressively.

"When I cross from Uganda to Kenya at the Busia border, I think I have entered London because everything is different. There is a Standard Gauge Railway in Kenya and in Uganda we are bringing a loan to refurbish a stone age railway," Mr Macho said.

Minister Bahati, however, assured the House that government has not completely abandoned the SGR project which he said will kick off in two years' time.

He explained that in the meantime, it is pointless to construct the SGR when the Kenyan part ends in Naivasha. The railway is expected to cut the cost of transportation of cargo and the cost of doing business.

Covid money

Although MPs cited gross abuses in the utilisation of Covid-19 response funds, they later approved an extra Shs112.2 billion from the African Development Fund to finance the revenue shortfalls occasioned by the impact of the Covid-19, with a big portion of the funds going to beef up the response to the pandemic by the Ministry of Health.

Mr Bahati told Parliament that the money will be used to among others aid the purchase of vaccines and other required materials, while some of the money will be put in the Uganda Development Fund to support business that have been affected by the pandemic, provide support to the ailing private sector, individual households and areas affected by Covid-19 in line with the preparedness and response plan.

"We need this money to support areas that have been hit most by the Covid-19 pandemic," Mr Bahati said.

The MPs, however, called for an audit into the alleged inconsistencies raised in a report by the Committee on National Economy.

While presenting the report on the floor of Parliament, the vice chairperson of the committee, Mr Lawrence Bategeka, said the Health ministry and the taskforces have not made comprehensive accountability into the hefty sums received to respond to the pandemic since its onset in March 2020.

"The committee noted that Ministry of Health received supplementary allocations to a tune of Shs337.5 billion for Financial Year 2019/2020 and 2020/2021 for several interventions to address the Covid-19," Mr Bategeka said.

He added: "However, some concerns have been raised in the realisation of the intended output, a case in point is the issue of procurement of masks at Shs53.4 billion, where the ministry indicated that some districts did not receive masks... the public should be made aware of the utilisation of the Covid-19 donations," Mr Bategeka said.

He urged the office of the Auditor General to carry out an audit of the Covid-19 budget to obtain reasonable assurance in the accountability and value for money.

The money was allocated Health ministry, Office of the Prime Minister, and the Ugandan Embassy in Beijing.



A report by the Attorney General released early this year highlighted gross abuse in the utilisation of Shs345.6b meant for Covid response in the financial year 2019/2020, claims the Ministry of Health refuted.

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