Finance Minister Maria Kiwanuka reveals that US$54million, more than 50percent of the acquisition will be for the lands sector, US$25million for business registration and licensing, US$25m for tourism marketing, administration and training, and US$8million as grants to SMEâ€™s under the Private Sector Foundation Uganda (PSFU).
The World Bank signs a US$100 million loan deal with the Uganda government for the country to reform land policies, boost tourism and grow small enterprises.
Maria Kiwanuka, the finance minister while signing on behalf of the government said the money would improve the business environment in Uganda and make it more competitive.
Kiwanuka says the loan will be used to improve land administration, tourism and provide grants to micro-enterprises. Nine new zonal land offices would be constructed in the country, Maria Kiwanuka adds.
Kiwanuka reveals that US$54million, more than 50percent of the acquisition will be for the lands sector, US$25million for business registration and licensing, US$25m for tourism marketing, administration and training, and US$8million as grants to SME’s under the Private Sector Foundation Uganda (PSFU).
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Approved by the World Bank Board in May 2013, the loan with a grace period of 10years, will be paid in a period of 40 years.
Last week, the Uganda government was given the green light by the International Monetary Fund (IMF) to increase its debt ceiling to US$2.2bn from US$1.5bn. This was amidst governments increased spending on infrastructure in the 2013/14 financial year.
Additionally, a credit rating agency, S&P had downgraded Uganda’s ability to pay its debts from B+ to B due to a mismatch in revenues and expenditure. Kiwanuka however emphasizes that this loan is at a good rate of less than 1percent, maintaining that Uganda’s debt is manageable.
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The World Bank in 2012 had suspended some of its development financing to Uganda due to corruption allegations in the Office of the Prime Minister and Ministry of Public Service. However, the financing has since resumed after the government carried out some reforms like having a Single Treasury Account.
Moustapha Ndiaye, the World Bank Uganda Country Director said that improving the private sector environment would create jobs for Ugandans considering that the labor force is growing at a 4percent rate every year.
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He further points out that business registration – Uganda Registration Service Bureau - would be improved to have one-stop-shop.
Additionally, he says that improving land administration would remove the “cumbersome land polices and weak lend tenure, which frustrate investors.”
The World Bank has previously extended financing towards computerization of the lands registry and the private sector. This project however faced cost overruns and slow implementation.
Gideon Badagawa the Executive Director, PSFU acknowledged that they had made mistakes and learnt a lesson from the previous project.