Parliament has approved a government request to borrow up to Shs.2 trillion (approximately \u20ac500 million) from the African Export-Import Bank (Afreximbank), Eco Bank Ltd, and the Development Bank of Southern Africa to finance the 2024\/25 national budget.<\/p>\n\n\n\n
The approval came despite strong objections from opposition Members of Parliament (MPs), who questioned the urgency of the loan just weeks before the end of the financial year.<\/p>\n\n\n\n
While presenting the loan request, Finance Minister Matia Kasaija told Parliament that part of the funds would be used to resume stalled infrastructure projects, including the Mityana\u2013Fort Portal road.<\/p>\n\n\n\n
\u201cIn accordance with Article 159 of the 1995 Constitution, Section 34 of the Public Finance Management Act, 2015 (as amended), and Rule 155 of the Rules of Procedure, I move a motion for a resolution of Parliament to approve borrowing of \u20ac270 million from Afreximbank and \u20ac230 million from Eco Bank and the Development Bank of Southern Africa,\u201d Minister Kasaija said.<\/p>\n\n\n\n
The minister also acknowledged the impact of the loan on Uganda\u2019s debt stock, which, as of June 2024, stood at USD 25.55 billion up from USD 23.67 billion in June 2023. Of that, USD 14.59 billion is external debt, while USD 10.96 billion is domestic.<\/p>\n\n\n\n
The loan request was met with resistance from opposition MPs led by Muwanga Kivumbi (Butambala County) and Karim Masaba, who argued that the request lacked urgency and proper justification.<\/p>\n\n\n\n
\u201cWe are speaking to a minister who already has Shs.16 trillion in undisbursed, unutilized loans. We are paying interest on borrowed money that\u2019s sitting idle. The Bank of Uganda holds Shs.222 billion that remains unutilized. This is part of the crisis the Attorney General has repeatedly raised\u2014Parliament approves loans without the necessary preconditions,\u201d said Kivumbi.<\/p>\n\n\n\n
He added, \u201cThe financial year is closing in less than a month. The minister must demonstrate his ability to absorb and utilize this money in time.\u201d<\/p>\n\n\n\n
Other MPs accused the government of using the loan to fund political activities ahead of the general elections.<\/p>\n\n\n\n
\u201cLet it be clear we are not against the loan itself. What concerns us is the timing and the new conditions attached, including commitment fees, management fees, agency fees, and the use of a commercial tranche,\u201d said Theodore Ssekikubo (Lwemiyaga County).<\/p>\n\n\n\n
\u201cWe are borrowing from commercial banks that ordinary Ugandans also rely on, yet middlemen will likely profit from this deal.\u201d<\/p>\n\n\n\n
Eddie Kwizera (Bukimbiri County) questioned the lack of prior planning, adding that a loan with a 7% interest rate qualifies as commercial borrowing and therefore requires serious justification.<\/p>\n\n\n\n
\u201cThis budget is now in its twelfth month, and the minister has failed to explain the delays in sourcing funds earlier. Why is Parliament being rushed to approve a commercial loan?\u201d<\/p>\n\n\n\n
According to Supplementary Schedule 3, out of the Shs.2 trillion loan request, the Ministry of Defence was allocated Shs.186 billion, while Treasury Operations received Shs.380 billion. The Uganda Police was allocated Shs.190 billion, the Ministry of Works received Shs.61 billion, and the Ministry of Health was allocated Shs.12 billion. Other allocations were also made, with further details pending full disclosure by the Ministry of Finance.<\/p>\n","protected":false},"excerpt":{"rendered":"
Parliament has approved a government request to borrow up to Shs.2 trillion (approximately \u20ac500 million) from the African Export-Import Bank (Afreximbank), Eco Bank Ltd, and the Development Bank of Southern Africa to finance the 2024\/25 national budget. The approval came despite strong objections from opposition Members of Parliament (MPs), who questioned the urgency of the […]<\/p>\n","protected":false},"author":2270,"featured_media":39940,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":[],"jnews_primary_category":[],"jnews_paywall_metabox":[],"jnews_override_counter":[],"footnotes":""},"categories":[356],"tags":[31,7701,119],"class_list":["post-39939","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-big-story","tag-featured","tag-parlaiment","tag-uganda-news"],"yoast_head":"\n