By Insight Post Uganda
Kampala, Uganda
Parliament has granted its approval for the government to secure a loan of up to US$566 million (Shs2.1 trillion) from the International Development Association (IDA) within the World Bank Group.
This substantial loan is earmarked to fund the Greater Kampala Metropolitan Area Urban Development Programme (GKMA-UDP). This significant decision was reached during a comprehensive plenary session held on Wednesday.
The primary objective of the GKMA-UDP is to channel resources towards the development of infrastructure, with a particular focus on roads, spanning several key areas including Kampala, Entebbe, Kira, Makindye-Ssabagabo, Mukono, and Nansana municipalities, as well as Mukono, Mpigi, and Wakiso district local governments.
It is worth noting that out of the total loan amount, US$518 million will be allocated as a loan, while an additional US$48 million will be extended as a grant.
During the parliamentary session, Deputy Speaker Thomas Tayebwa urged the Finance Minister to provide clarification regarding whether this loan was affected by the recent World Bank decision to suspend loans to Uganda.
“We took note of the World Bank’s statement, and before I placed this matter on the agenda, I conducted a preliminary assessment. However, we require confirmation that this project is not among those affected,” Tayebwa articulated.
In response to this, State Minister for Finance, Hon. Henry Musasizi, provided reassurance to his fellow parliamentarians by explaining that this loan remained valid in light of the fact that the World Bank Board had previously given its approval to the project on May 31, 2022.
“I want to assure this House that the Greater Kampala Metropolitan Area Project is not among the projects impacted by the World Bank’s statement. Consequently, it is fitting that we deliberate on this project and initiate the necessary procedures to enable the Executive to commence implementation,” Musasizi affirmed.
Deputy Speaker Tayebwa subsequently clarified that the World Bank’s statement pertained exclusively to new projects and that all projects that had already received the World Bank’s approval would be presented before Parliament for further processing.
The GKMA-UDP will also receive a significant injection of funds in the form of a US$42.66 million (Shs156.4 billion) loan from Agence Francaise de Development (AFD).
Hon. Robert Migadde, the Deputy Chairperson of the Committee on National Economy, presented recommendations aimed at ensuring the effective utilization of the project funds.
His recommendations underlined the critical importance of subjecting the services provided by KCCA and the eight Greater Kampala Metropolitan Area local governments to rigorous audits in order to guarantee both value for money and the timely delivery of services.
Certain concerns were expressed by several Members of Parliament, including Hon. Betty Nambooze and Hon. Cecilia Ogwal, with regard to the administrative structure governing the Greater Kampala Metropolitan Area.
They highlighted that the administration of Kampala operates separately from that of other local governments and suggested that efforts should be made to harmonize these administrative units at the ministerial level to facilitate seamless operations.
Deputy Speaker Tayebwa clarified, however, that through a program-based budgeting approach, the government could readily integrate the implementation of the program throughout the Greater Kampala Metropolitan Area.
Furthermore, Nakasongola County MP, Hon. Noah Mutebi, vigorously advocated for the engagement of experienced project contractors as a means to ensure the effective execution of the program.
Lastly, Hon. Asuman Basalirwa conveyed his intention to potentially pursue legal action against the World Bank for its decision to suspend loans to Uganda in response to the passage of an anti-gay law. He argued that such actions by the World Bank were unjust.
Debate on World Bank Loan Suspension
Amidst persistent efforts to secure the loan, Deputy Speaker (Tayebwa), on Wednesday, declined to permit Members of Parliament (MPs) to engage in a discussion regarding the World Bank’s suspension of new loans to Uganda.
Tayebwa expressed concerns that the statements made by MPs could potentially disrupt ongoing negotiations between the government and the lender.
“In Parliament, our role is to facilitate the country’s activities. I have already made a ruling on this matter,” he stated, adding that it is being handled by the Executive, and debating it at this stage may not be conducive.
Tayebwa’s remarks were prompted by Bugiri Municipality MP Asuman Basalirwa’s request for Parliament to receive formal authorization from the executive to address this issue on the parliamentary floor. Basalirwa also urged the executive branch of the government to clarify how Uganda planned to address the suspension of the loan.
“Wouldn’t it be procedurally correct for us to receive a response from the Executive regarding how we intend to navigate this situation? I am even contemplating taking legal action against the World Bank,” he remarked.
Earlier this month, the World Bank announced the suspension of new public funding to Uganda in response to the country’s adoption of an Anti-Homosexuality law. In its official statement, the lender asserted that Uganda’s Anti-Homosexuality Act fundamentally contradicted its core values.
Despite this, President Museveni has remained steadfast in his stance that Uganda can do without the World Bank’s loans, asserting that many of these loans and aid packages do not provide significant value addition to the country.
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