The ugandan Parliament, on Thursday November 17, 2022, approved another loan worth Shs523 billion ($140m) from the international development association of the World Bank to finance the Uganda digital acceleration project – government network.
The House also approved grant financing of Shs224 billion from the same financing agency for the same purpose, bringing the total approved amount to Shs747 billion.
The new approval comes almost a week after Parliament approved another request to borrow Shs1.7 trillion.
“Honourable members, I now put a question that the House approves a resolution of Parliament to authorise the government to borrow up to special drawing right of 98.2 million equivalent to $140 million and secure grant funding amounting to a special drawing right of 42.4 million equivalent to $60 million from the international development association of the World Bank to finance Uganda digital acceleration project government network and with amendments. Those in support say aye and those against say nay…,” Ms Anita Among, the Speaker of Parliament, said.
With the pronouncement, the loan was approved, further sinking Uganda towards the debt red zone.
The latest approval of loans takes the total amount of money government has borrowed this financial year to about Shs2.5 trillion, more than half the government had planned to borrow externally this financial year.
Prior to the two approvals, the Finance ministry tabled a request to borrow up to Shs3.5 trillion to finance part of the Shs48.2 trillion budget it passed in June .
In August, Parliament approved a $70 million (about Shs261.8b) loan to be borrowed from the Arab Bank for Economic Development in Africa, Saudi Fund for Development and the Opec Fund for International Development for the construction of a state of the art facility to house the Uganda Heart Institute.
Another loan request of $331.5 million (about Shs1.2 trillion), which comes with a grant totalling $276.5 million (about Shs1.03 trillion) is in the offing, which Parliament may be asked to approve soon.
The government this financial year planned to spend up to Shs48.1 trillion.
By end of June, total public debt stood at Shs78.799 trillion ($ 20.98 billion), an increase by 13 percent from Shs61.513 trillion ($19.54 billion) as at end June 2021.
According to Bank of Uganda, public debt had increased to Shs80.044 trillion by end of July 2022, translating to a debt to GDP ratio of 49.2 percent. The committee report says if implemented this financial year, the proposed borrowing will increase the debt to GDP ratio for FY 2022/23 thus increasing the nominal share of debt to GDP projected to perform at 51.9 percent in FY 2022/23.
