Summary:

• FDC factions criticize the government’s decision to borrow from local banks for supplementary budgets, expressing concerns about potential adverse effects on the business community and the economy.

Both the Najjanankumbi and Katonga factions of the Forum for Democratic Change (FDC) criticized the government’s recent decision to borrow from local commercial banks for the approved supplementary budgets. Speaking at a press briefing in Najjanankumbi, Kampala, Margaret Wokuri Madanda, the FDC deputy president for the eastern region, expressed concerns that government borrowing from local banks might disadvantage the business community, potentially leading to reduced access to funds and exacerbating unemployment.

In a separate press conference at their Katonga Road offices in Kampala, Harold Kaija, the secretary-general of the FDC Katonga faction, emphasized the potential negative impact on the economy. Kaija highlighted that the funds for the supplementary budget would be sourced locally, involving commercial loans with shorter repayment periods and higher interest rates. He underscored the existing challenges of servicing a substantial national debt.

Parliament recently approved loans totaling over Shs5.2 trillion, which included Shs3.5 trillion from local commercial banks for the supplementary budget. Kaija called for transparency in the utilization of the funds to ensure they are allocated for their intended purposes. Madanda questioned the government’s decision to resort to local banks, expressing doubt whether all available borrowing options had been exhausted, potentially affecting local businesses in the process.