Kampala, Uganda: The Ugandan parliament has approved three loans totaling over US$5.2 trillion ($1.38 billion), further increasing the country’s national debt. This move has sparked concerns and objections from opposition members.

Breakdown of Loans:

• Ush3.5 trillion ($927.2 million): Loan from local commercial banks to fund the supplementary budget.
• Ush1.23 trillion ($325.83 million): Loan from the World Bank for the “Uganda Climate Smart Agricultural Transformation Project (UCSATP)”.
• Ush554.7 billion ($146.9 million): Loan from the Export-Import Bank of China to finance the “National Data Transmission Backbone Infrastructure/E-Government Infrastructure Project Phase V”.

These loans push Uganda’s already significant debt to over Ush88.8 trillion ($23.5 billion) as of August 2023.

This has raised concerns about the country’s financial stability and the potential for unsustainable debt levels.

Opposition Criticism:

The loan for the supplementary budget was criticized by opposition members, particularly the inclusion of US$1.56 trillion ($413.2 million) already spent by the government.

They argued that this amount was available within the existing budget and that borrowing for it was unnecessary.

The government defended its actions, claiming that the swept-back funds from the previous financial year were not readily available.

They argued that the loan request represented new funds required for critical projects.

The parliamentary committee’s minority report expressed concern about the government’s “financial indiscipline.” They contended that this approach would result in increased debt and potential financial distress.

The minority report specifically criticized the supplementary budget’s increased spending for the State House. They argued that this level of spending lacked transparency and accountability.

The approval of these loans will undoubtedly impact Uganda’s economic future.

It is crucial for the government to prioritize prudent financial management and ensure that borrowed funds are utilized effectively for the benefit of the country.

Additionally, addressing concerns about transparency and accountability will be essential for maintaining public trust and ensuring responsible fiscal management.