Government Plans to Secure UGX18 Trillion in Loans Amidst Soaring Public Debt

Government Plans to Secure UGX18 Trillion in Loans Amidst Soaring Public Debt

The Ministry of Finance has announced plans to acquire 29 additional loans valued at over Shs18.7 trillion to finance various public projects. This move comes as Uganda’s public debt reaches US$24.60 billion (Shs93.38 trillion) as of the end of December 2023.

These details are outlined in the “Report on Public Debt, Grants, Guarantees, and Other Financial Liabilities for the Financial Year 2023/2024,” which the Ministry of Finance will present to Parliament. This presentation is in accordance with the Public Finance Management Act (2015), Sections 39(4), 42(2-3), and 44(5).

Among the projects listed, the Standard Gauge Railway project, estimated at US$1,928.86 million (Shs7.296 trillion), is a significant one, though it still lacks a confirmed financier. Another major loan in the pipeline is US$414.8 million (Shs1.569 trillion) for the 2023/24 budget support, with ongoing discussions with potential financiers.

Negotiations with Citi Bank are also underway to fund the construction of oil roads, including the Lusalira-Nkonge-Lumegere-Ssembabule road by the Uganda National Roads Authority (UNRA) at a cost of US$130 million (Shs491.848 billion). Similar negotiations are ongoing for the Kabwoya-Buhuka and Ntoroko-Karugutu roads at US$108.11 million (Shs409.028 billion). Additionally, a loan of EUR150 million (Shs616.870 billion) is being discussed for the development of Kisoro Industrial Business Park by the Uganda Investment Authority.

The development of Kasese Industrial Business Park by the Uganda Investment Authority is also in the pipeline, with a loan of EUR196 million (Shs806.044 billion) currently under discussion. The Ministry of Agriculture has proposed a loan of US$160 million (Shs605.352 billion) to enhance agricultural production, quality, and standards for the Market Access Project.

The French Development Agency has shown interest in funding the construction of the Katuna-Muko Kamuganguzi Road (104.0 km) and the Laropi-Moyo-Afogi Road with a 1.2 km bridge at a cost of US$206.15 million (Shs779.958 billion), with UNRA overseeing the project. Discussions are ongoing for these funds.

In the health sector, there are plans to secure EUR8.5 million (Shs34.955 billion) for establishing a Regional Oncology and Diagnostic Center at Mbale Institute from Australia, managed by the Uganda Cancer Institute. Additional funding of US$14 million (Shs52.968 billion) is being sought to expand the Uganda Cancer Institute Project. The Ministry of Health also plans to rehabilitate Bugiri Hospital at a cost of US$20 million (Shs75.669 billion), with discussions ongoing with the identified financier, BADEA.

Despite the World Bank halting funding to Uganda following the passing of the Anti-Homosexuality Act 2023, the government still plans to rely on the lender for the Northern Uganda Social Action Fund 4 (NUSAF-4) at US$250 million (Shs945.862 billion), to be overseen by the Office of the Prime Minister. Additionally, the government is awaiting the World Bank’s Board approval for Uganda’s Learning Acceleration Program (ULEARN) by the Ministry of Education, valued at US$150 million (Shs567.517 billion).

In the water sector, the development of large gravity flow schemes to increase safe water coverage in rural areas is planned, with the India Exim Bank expressing interest in funding this project to the tune of US$87.625 million (Shs331.524 billion). The French Development Agency is also in negotiations with the government to fund the construction of roads in the Greater Kampala Metropolitan Area Urban Development Project at a cost of EUR40 million (Shs164.498 billion).

The Uganda Electricity Generation Company Limited is seeking EUR145 million (Shs596.308 billion) to rehabilitate the Nalubale Kiira Dam, while the Uganda Electricity Transmission Company Limited (UETCL) plans to extend electricity along the Mirama-Kikagati-Nsongenzi Transmission line. Negotiations are underway with the Swedish Export Credit Agency for EUR29.66 million (Shs121.975 billion) to fund this project.

SOURCE: Parliament Watch

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