PARLIAMENT .
Parliament has given government a green light to borrow up to €500 million (Shs2.066 trillion) to finance the current Shs72.1 trillion budget amid protests from opposition legislators .
This comes less than two months to the end of the current 2024/2025 Financial Year.
Part of the €500millin will be borrowed from the African Export-Import Bank (Afreximbank) while the remaining €230 million (Shs950.8 billion) from Ecobank Uganda Limited and the Development Bank of South Africa.
This urgent controversial proposal, which was brought up on the floor of the House on Thursday despite not being on the order paper, was presented by Finance Minister Matia Kasaija .
The minister told legislators that the monies are urgently needed to fund the current budget.
“The total appropriated budget support financing was Shs1,393.66 billion, of which the Budget Support grants amounted to Shs39.48 billion while the Budget Support loans comprised Shs291.53 billion from the World Bank, Shs467.84 million from the International Monetary Fund (IMF), and Shs594.81 billion from external commercial sources.
“However, given that Government is yet to conclude the programme negotiations with the IMF, the Shs467.84 billion from the IMF will not be disbursed. Government is therefore proposing to raise both Shs467.84 billion which was the portion from the IMF and Shs594.81 billion (a total of Shs1,062.65 billion), approximately Euro 270 million, through borrowing from African Export-Import Bank of which Uganda is a shareholder,” Mr Kasaija said.
But Mr Muhammad Muwanga Kivumbi, the Butambala County MP (NUP), questioned the speed at which this loan request was brought at the last eleventh hour when the current financial year is being concluded. “Before my committee is one of the reports on debt management.
You are speaking to the Minister who has un-disbursed borrowed money Shs16 trillion lying out there borrowed as we are paying interest. You have Shs225 billion in Bank of Uganda that is disbursed and unutilised…we are approving borrowing without taking necessary conditions that this money will be utilised,” he said.
“Budget expenditure is recurrent and for how long shall we borrow money for it…the Minister may be here when he borrowed the money and is here asking the Parliament to rubber stamp his international borrowing.” he added.
Backing Kivumbi’s argument, Bukimbiri County MP Eddie Kwizera Wa-Gahungu also questioned the speed at which the proposal was brought, wondering why the ministry didn’t plan early and end up presenting a commercial loan for approval. In defence, the minister noted that the government transacts business and needs this money to keep running.
After arguments, the House considered Bukooli North MP Stephen Baka Mugabi’s proposal and suspended Rule 162 paragraph 2, 3, and 4 and debated a motion that had been presented without being on the order paper.
The minister further justified to the House the need for borrowing the additional €230 million (Shs950.8 billion) from Ecobank Uganda Limited and the Development Bank of South Africa, citing the three recent supplementary budgets which the House passed to cater for the government commitments and obligations.
Previous borrowing
Parliament on January 23 this year approved a supplementary of Shs1.05 trillion, of which Shs97.2 billion was to be raised locally while the remaining Shs953 billion from borrowing. Another supplementary amounting to Shs1.2 trillion was approved by the House on February 6 and it was to be self-financed. On March 12, the House approved another Shs4.2 trillion supplementary where Shs223.5 billion was to be self-financed by the government, Shs920 billion from external borrowing, and Shs3.1 trillion from internal borrowing .