Uganda to borrow USh1.9 trillion despite World Bank ban

Uganda to borrow USh1.9 trillion despite World Bank ban

The parliament of Uganda has approved for borrowing of USh1.9 trillion to facilitate rehabilitation of projects in Kampala.

Uganda intends to get a loan from the International Development Association of the World Bank.

The parliament’s approval for external borrowing comes at a time when the World Bank had banned additional funding to Uganda due to the passing of the anti-homosexuality act.

During the debate in parliament, some legislators raised questions on whether the World Bank would reject the loan application.

In a rejoinder, Uganda’s Minister for Finance Henry Musasizi assured the members of parliament that the World Bank had approved the Kampala Metropolitan Area Urban Programme on May 31, 2022.

“I want to assure this House that the project is not among those affected by the World Bank statement,” Musasizi stated.

At the same time, parliament approved another loan request of USh931 billion to facilitate the Kamapala – Malaba meter gauge railway project.

The USh931 billion will be borrowed from the African Development Fund, the African Development Bank, and the Corporate Internalization Fund of Spain.

The loan approvals come a few days after President Yoweri Museveni on August 17, claimed that the external loans add no value to Uganda.

“On the contrary, those loans and aid packages can be a source of distortion and stunted growth as you can see across Africa. Many of the loans and aid packages, are either of no value addition to the country or are even anti-growth, all together,” Museveni said.

Museveni released the statement as a response to the World Bank’s announcement, on suspending lending to Uganda over the passing of the Anti-Homosexuality law.

The World Bank noted that Uganda’s Anti-Homosexuality Act contradicts the principles of the money lending institution.

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