Museveni says all State loans must get his personal approval
What you need to know:
- Uganda President directs that all government loans must get his “personal approval”.
- Mr Museveni has already ordered that 11 government loans that are before Parliament be rejected
- Uganda’s external and domestic public debt amounted to $8.7 billion as of December 31, 2016
Ugandan President Yoweri Museveni has written to Speaker Rebecca Kadaga directing that all government loans must get his “personal approval” before they are tabled in Parliament.
In the letter tabled in the House Wednesday, Mr Museveni also directed that 11 government loans that are before Parliament be rejected on grounds that they do not add value to the economy.
Mr Museveni ordered that only 16 loan requests be approved, explaining that only infrastructural development in the health and education sectors be funded by loans.
Some of the loan requests the President directed be rejected include a $200 million for the construction of the Kampala-Jinja Expressway, $100 million from Islamic Development Bank (IDB) for poverty reduction and a $200 million for fiscal transfers and management.
On the loan for the Kampala-Jinja Expressway, Mr Museveni said the money should be recovered from the road tolls while he stated that the loan from the IDB lacked clarity.
“The President feels that we are over-burdening the country by contracting so many loans, some of which do not add value to the country. He proposes that the loans should have his personal endorsement before they come to this House,” Ms Kadaga said.
Figures by finance minister Matia Kasaijja indicate that Uganda’s external and domestic public debt amounted to $8.7 billion as of December 31, 2016, equivalent to 33.8 per cent of Gross Domestic Product (GDP).
Delivering his budget speech last month, Mr Kasaija was in a bullish mood, arguing that when future debt payment obligations are discounted to today’s value, the public debt to GDP ratio would be at 27 per cent.
“This is much lower than the threshold of 50 per cent beyond which public debt becomes unsustainable. Uganda’s public debt, therefore, is sustainable over the medium to long term,” Mr Kasaija said.
