Government has revised its proposal to borrow money to
mitigate the effects of Coronavirus by up to 1.3 trillion shillings.
On April 2, the government presented a motion to borrow up to
1.7 trillion shillings to cushion the economy from the effects of COVID-19.
This figure has now been revised upwards to 2.9 trillion Shillings.
During plenary on Wednesday evening, David Bahati, the
Minister for Planning told Parliament that following the International Monetary
Fund (IMF) and the World Bank’s decision to increase its funding proposal
towards COVID-19 and support to economies, the government has sought to withdraw
the earlier loan proposals and replace them with new ones since figures and
dates had changed.
The government had earlier on tabled a loan request of 719
Billion Shillings from the World Bank’s International Development Association
(IDA) to provide sufficient financial resources to the health sector and
mitigate the effects of COVID-19 on the economy of Uganda, but this figure has been
revised upwards to 1.1 trillion shillings, a difference of 416 billion Shillings.
For Balance of Payments support to Bank of Uganda (BoU), the
government has also revised this loan request upwards by an additional 912
billion shillings. Initially, the Government had requested to borrow 946
billion Shillings, but the new figure now is 1.8 trillion Shillings.
Balance of Payments is the country’s record of transactions
between its residents and foreign residents over a specified period of time.
According to Bahati, of the 1.8 trillion shillings, 1.2
trillion shillings will help BoU in bridging the gap in the balance of payments
position while 117 billion shillings will be used for budget support to finance
Government’s response plan to the pandemic.
Another 454 billion Shillings will support the private sector
through the Uganda Development Bank (UDB) by boosting their capacity through
loans.
Cue in; “From 100 million…
Cue out:…request to Parliament.”//
Aruu County MP Odonga Otto demanded to know how much money
Uganda has in its reserves and the debt portfolio, saying Government was borrowing
too much.
//Cue in; “So how much…
Cue out…loan request, borrowing.”//
Igara East MP Michael Mawanda called on Government to give a
comprehensive statement on the economy, and what is needed instead of borrowing
too much simply because the IMF and the World Bank decided to give more money.
//Cue in; "The status of...
cue out...right honourable speaker."//
For the proposal to borrow from the African Development Bank
(ADB) to fund the Kampala City Roads Rehabilitation project, this has been
revised by six billion shillings taking the figure to one trillion shillings.
“The changes in the loan amounts and disbursement periods
requires a formal withdrawal of the loan requests from Parliament, and
submission of a new loan request,” Bahati told the house.
Parliament forwarded the loan request of 2.9 trillion
shillings to the National Economy Committee for scrutiny.
Alex Otto
Freelancer