The 11th Parliament approved loans to a tune of US$1,259.18 million (Shs4.671Trn) in 2022 that Government moblised through external borrowing.
The details are contained in the Report on Public Debt, Grants, Guarantees and Financial Liabilities for 2022/2023 that highlighted that Parliament approved 9 loans by 31st March 2023.
The first loan approved by Parliament was from the Islamic Development Bank and this was meant to finance the the Irrigation Schemes Development Project in Unyama, Namalu and Sipi to a tune of US$80m (Shs296.825).
A similar loan from the same lender, Islamic Development Bank to finance the Irrigation Schemes Development Project in Unyama, Namalu and Sipi Loan worth US$6.5 (Shs24. 117Bn) was approved by Parliament.
Parliament also approved a loan from BADEA for the capitalisation of Uganda Development Bank Limited which loan facility was intended to be used for the Financing of the Private Sector Projects and the said loan was to a tune of US$10 (Shs37.103Bn).
BADEA also extended another loan facility to Uganda Development Bank Limited and this time around, the loan was intended to finance traders in Uganda worth US$10m (Shs37.103Bn)
For the construction and expansion of facilities at the Uganda Heart Institute, Government sought funds from three lenders including; BADEA (US $20M, Saudi Fund (US$ 30M) and OPEC FUND (US$ 20M) a loan facility totalling US$70m (Shs259.721Bn).
Following negotiations with officials from Ministry of Finance, Standard Chartered Bank agreed to lend Uganda US464.13 (Shs1.72Trn) to Finance the 2022/2024 Budget.
However, the Ministry of Finance informed Parliament that Standard Chartered has only disbursed Euro146M (Shs584.609Bn) of the part guaranteed by ICIEC and the balance of the Euro 36 million (Shs144.150Bn) is to be disbursed in May 2023, and the failure by the Bank to raise the funds prompted the Ministry of Finance to source for a loan from a street money lender based in Kenya, whose capability to raise the said Shs2Trn was scritunised by Parliament, prompting Government to backtrack on dealing with the money lender.
Parliament also approved a loan from the International Development Association and this was targeting Energy Access Scale Up Project worth US&331.5M (Shs495.381Bn).
The proposal by Ministry of Finance to acquire another loan from the International Development Association to finance the Uganda Digital Acceleration Project-LGOVNET to a tune of US$133.63M (Shs495.809Bn) was approved by Parliament.
The same lender International Development Association agreed to finance the Uganda Secondary Education Expansion Project at a cost of US$153.42M (Shs569.236).
Over the years, from FY 2016/17 there has been a gradual increase in the amount of loans and grants mobilized and in the FY 2019/20, Government mobilized the highest amount of loans (USD2,879million) and grants (USD113million).
The development comes at the time the Bank of Uganda State of the Economy April 2023 Report put Uganda’s provisional total public debt stock as at end March 2023 at Shs86.352Trn.
However, despite the skyrocketing public debt, the Ministry of Finance while reporting on the loans approved by Parliament indicated that there has been a slight decline in new external financing mobilized which was majorly caused by the effect of the COVID 19 pandemic on global economies.
The Ministry of Finance expressed hood that with the recovery from the pandemic, there has been an increase in new external financing mobiized increasing from US$279 million in FY 2021/22 to US$1,886.11million in the FY 2022/23.
“We therefore expect a positive trend in new financing mobiized in the forthcoming years as global economies recover from the negative effects of the COVID19 pandemic,” the report reads in part .
The Ministry of Finance in the same report indicated Government’s plans to hit the foreign market in search for more loans with already 18 loans in its pipeline to finance key infrastructure projects in Uganda.
