The Minister of Finance, Planning and Economic Development, Matia Kasaija, explained the delay in the use of the loans.
The Minister told the deputies of the National Economy Committee that he was also disappointed that the entities responsible for implementing the programs for which loans are acquired, are slow to absorb.
“Once the loans are signed, the money is always available, but many responsible entities do not submit requests for the funds when they have not planned activities for the money,” the minister explained.
“I borrow this money under pressure, and then the money is held idle by responsible sectors,” he added.
Kasaija also admitted that some projects are delayed when the government, due to financial constraints, fails to provide counterpart funding.
“But in such circumstances, the responsible sector should be able to make noise during the budgeting process to ensure that money for counterpart funding is allocated because we usually have many funding pressures, which makes us forget certain priorities,” Kasaija said.
Increase in debt
According to the latest report on the state of public debt published by the Ministry of Finance, Uganda’s public debt has fallen from $15.27 billion (54.9 trillion shillings) in June 2020 to $19.5 billion. (74.1 trillion shillings) in June 2021.
The Minister was responding to MPs’ concern that the country continues to lose money due to late use of borrowed (loan) funds.
The Auditor General’s latest report says that out of a total of 64.5 trillion shillings that the government had guaranteed in loans from international creditors, 44.3 trillion shillings had been drawn down.
Funds that have yet to be used stand at 20.2 trillion shillings, up from 16 trillion shillings three years ago.
In his report, the Auditor General expressed concern that due to the late implementation of the loans, the country is losing more money in terms of more interest and more commitment fees that must be paid for these loans.
The loan performance inquiry was triggered by a directive from Thomas Tayebwa, the Deputy Speaker of Parliament, after learning that one of the loans secured for a project in Karamoja a few years ago had taken a long time to come through. used.
On March 19, 2020, the Ministry of Finance presented to Parliament a request for a loan of 10 million euros from the Italian government to finance phase II of the Karamoja infrastructure development project, within the framework of the development plan of the health sector.
The committee found out that so far no money has been released to start the implementation of the project.
The committee also discovered that the delay was due to the Ministry of Finance signing the loan agreement before obtaining clearance from the Attorney General.
The Ministry of Finance implicated
MPs criticized the Finance Ministry for always rushing to seek loans before adequately preparing projects for implementation.
Kitgum Woman MP Lillian Aber said: “For projects that are performing poorly, the Department of Finance should be able to say why. We cannot continue to approve loans that are slow to be used. We will look lousy to the public as a Parliament if we keep approving new loans when old ones are not yet used.
Bugabula North MP John Teira said: “These challenges point to poor planning. Before applying for a loan, make sure the land and other requirements are secured. We have been in this circus for a long time and you are the minister responsible for development. Do what is necessary.”
Robert Migadde, the vice chairman of the committee, called on Kasaija to urgently come up with the necessary measures to address the poor loan performance.
Margaret Makokho, MP Namayingo Woman, said: “I am also disappointed with the non-performing loans. It means we get the money when we are not ready. Why should we borrow when we are not ready to use the funds? »
About the Buvama palm project, Kasaija explained that the investor is waiting for land because the residents have not been compensated.