Gov’t Seeks Shs2.436 Trn Loan For Agriculture and Road Construction

KAMPALA – The Finance Minister, Matia Kasaija, presented two motions in the recent Parliamentary session, proposing a borrowing of Shs2.436 Trillion.

This includes a Shs1.217 Trillion loan from the World Bank for smart agriculture and Shs1.219 Trillion from the Islamic Development Corporation for road construction.

During the plenary session yesterday, Minister Kasaija outlined the first loan request, amounting to US$295 million (UGX1.104tn) from the Islamic Development Bank and US$30 million (UGX112.360bn) from the OPEC Fund for the upgrading of national roads in Uganda, bringing the total to UGX1.219tn.

The government is also seeking to borrow up to US$325 million (UGX1.21tn) and receive a grant of up to US$25 million (UGX93.601bn) from the International Development Association (IDA) of the World Bank Group to fund the Uganda Climate Smart Agricultural Transformation Project (UCSATP).

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This development occurs as the Ministry of Finance reported that Uganda’s public debt has reached UGX87tn.

The Debt Statistical Bulletin for June 2023 indicates an increase from US$20.97bn (UGX78.495tn) in June 2022 to US$23.22bn (UGX86.918tn) in June 2023. External debt rose from US$12.8bn (UGX47.915tn) to US$13.79bn, and domestic debt increased from US$8.2bn to US$9.4bn during the same period.

Minister Kasaija disclosed that 60.55% of Uganda’s external debt, totaling US$8.35bn, is owed to multilateral creditors.

The major contributors include the International Development Association-World Bank, International Monetary Fund (IMF), and African Development Fund, comprising 51.06% (US$7.04bn) of the external debt portfolio.

If approved by Parliament, this would be the second loan sought by the Government since the World Bank’s decision in August 2023 to halt further funding due to the enactment of the Anti-Homosexuality Act 2023.

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The World Bank cited a conflict with its values, emphasizing the importance of inclusivity in achieving its vision of eradicating poverty on a diverse and equitable planet.

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