Government Chief Whip Thomas Tayebwa on Wednesday tabled a motion informing Parliament that government wants to get Shs384.98bn loan from China Construction Bank Corporation which will be used in the construction of several roads in the oil graben.
If Parliament approves the loan, the roads to be constructed include; Masindi-Biiso Road 54KMs, Hohwa-Nyairongo-Kyarushesha-Butole 25KMs and Kabaale Kiziranfumbi Road 25.7Kms.
On why he is the one who presented the motion yet the ministry of Finance has over five ministers, Tayebwa informed the House that the ministers of Finance were meeting the President to discuss the budget framework paper which is to be presented to parliament next week.
If the loan is approved, it will increase Uganda’s public debt following Central Bank’s Monetary Policy Report for the period ended August, that revealed that the stock of public debt had grown from Shs65.83Trn as of June 2020 to Shs70.3Trn as of June 2021 representing an increase of Shs4.47Trn.
The country’s debt load is seen surging past 50 percent of Gross Domestic Product (GDP) by the end of the current financial year in June, according to Finance Minister Matia Kasaija.
Uganda’s total public debt surged to $18 billion as of December 2020, a 35 percent rise from a year earlier, fuelled by fresh borrowing to cover revenue shortfalls as measures taken to combat the coronavirus hit the economy hard and stifled tax collections. External creditors hold two-thirds of the country’s debt, finance ministry data shows.
Uganda is joining fellow African countries such as Ethiopia, Zambia, Chad and others that are facing debt pressure either triggered or exacerbated by the effects of COVID-19 plus some huge borrowings to facilitate huge projects such as power dams and roads.
About two-thirds of Uganda’s debt is held by external creditors, and the public debt is now 40.8 percent of GDP.
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