Henry Musasizi, State Minister for Finance (General Duties)
Government through the Ministry of Finance has withdrawn a request to borrow Euros 96.270Million (aboutShs386.24bn) for the construction of oil roads.
While appearing before Parliament’s National Economy Committee yesterday, Henry Musasizi, State Minister for Finance (General Duties) informed Parliament of Government’s decision to withdraw the loan after realizing that the money can be generated internally.
“Following our internal reviews of the project performance and financial performance, we think using government resources, we can finance these projects without necessarily going to borrow externally. And in this regard, I wish to withdraw the loan request for consideration. We shall internally finance it and we have progressed,” Musasizi said.
Last week, Government tabled a loan request seeking approval of Parliament to borrow USD270 108,323,942 from China Construction Bank Corporation towards the construction of oil roads including; Masindi-Biiso Road 54KMs, Hohwa-Nyairongo-Kyarushesha-Butole 25KMs and Kabaale Kiziranfumbi Road 25.7Kms.
However, the decision shocked the lawmakers on National Economy Committee, who wondered why Government doesn’t go ahead with acquiring the loan and instead use it for maintaining several roads across the country that are in a dilapidated state.
Nathan Byanyima (Bukanga North) asked the Ministry of Finance not to bow to criticism over the endless borrowing, saying Uganda can’t do away with loans and instead, the loan should be acquired in order to repair some of the dilapidated roads across the country.
“I can’t believe this is true because we have been grappling with expenditure in our budget through budget cuts. Are you really serious to tell us you have some money to build those roads, that is a pure lie, there must be something fishy that we don’t know. These people are complaining about loans, but there is no way we can do without loans especially for infrastructure,” said Byanyima.
Although Mukono South’s Fred Kayondo commended the Ministry of Finance for not sinking Uganda into further debt, he wondered why UNRA has ignored Kampala- Jinja Highway, a road he says connects Uganda to the coast but has been left in a sorrowful state.
“There is no way you can assure me that because money for Hoima is got, so other areas can’t benefit. Jinja Road is the only road that is connecting us to the coast, but look at the state in which it is in. it takes you 4hours from Kampala to Mukono, but you have worked on other roads and neglected Jinja Road and then you asked for a loan and are withdrawing it, is it because Jinja Road isn’t in Hoima?” asked Kayondo.
Allan Atugonza (Buliisa County) who hails from the Bunyoro region wondered why the loan isn’t used to compensate land acquired by Uganda National Roads Authority (UNRA) for the construction of some oil roads instead of rejecting the loan in totality. This is the second time this year that Government has withdrawn a loan from Parliament.
Abed Bwanika (Kimanya Kabonera) welcomed the decision to withdraw the loan and asked the Minister to clarify on Uganda’s debt burden and when the nation is likely to cross the 50% debt threshold set by International Monetary Fund.
The Central Bank in the Monetary Policy Report for the period ended August, revealed that the stock of public debt had grown from USD17.96Bn equivalent to Shs65.83Trn as of June 2020 to Shs70.3Trn as of June 2021 representing an increase of Shs4.47Trn.
Uganda discovered Commercial crude oil reserves in 2006, amounting to 6.5 billion barrels of oil, of which 1.4-1.7 billion barrels are estimated to be recoverable and the deposits are mainly located on the East Bank of Lake Albert and in the Nile Delta north of Lake Albert.
However, there has been numerous postponement of dates when Uganda would receive its first oil and the latest date given by Government is 2025 and the postponement was blamed on absence of infrastructure like oil roads, oil refinery, East African Crude Oil Pipeline as well as lack of enabling laws to operationalise oil production. Parliament passed into law the latest set of oil roads last week and they are awaiting assent by President Museveni.