Gov’t Seeks $117.26m Loan from Standard Chartered Bank for Kitgum-Kidepo Road Project

Summary:

• The government seeks a $117.26 million loan from Standard Chartered Bank for the Kitgum-Kidepo road. Concerns about delays and a supplementary request of Shs1.106 trillion were raised in Parliament.

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The government has put forward a loan request of US$117.26 million (Shs446.7 billion) from Standard Chartered Bank to fund the construction of the Kitgum-Kidepo road. This proposal was presented by Amos Lugoloobi, the Minister of State for Finance, Planning, and Economic Development (Planning), during the plenary session on Thursday, April 18, 2024.

During the session, Speaker Anita Among highlighted the government’s efforts to enhance tourism roads nationwide to bolster revenue from the sector. She emphasized the significance of improving roads for tourism, particularly introducing the proposal to borrow funds for constructing a tourism road from Kitgum to Kidepo, which could significantly enhance tourism in Northern Uganda.

Speaker Among expressed concerns about the prolonged approval process for the loan, stretching over a year and a half, resulting in the accumulation of fees like commitment fees. She questioned the delay, given that feasibility studies had been completed, stressing the importance of considering the time value of money.

Responding to these concerns, Attorney General Kiryowa Kiwanuka acknowledged the delays, attributing them to the necessity for comprehensive information to ensure efficiency in the process. He emphasized the importance of obtaining accurate information from relevant entities, which sometimes prolongs negotiations.

Musa Ecweru, the Minister of State for Works, highlighted the issue of outdated road designs due to delays in the process. Lugoloobi expressed serious concerns about the evaluation of the loan acquisition value chain, approval process, and subsequent implementation and performance evaluation.

The proposal was referred to the Committee on National Economy for review.

Additionally, Lugoloobi presented a supplementary request of Shs1.106 trillion for Parliament’s consideration. This supplementary expenditure, outlined in Schedule No. 2 for the financial year 2023/24, adheres to the Public Finance Management (Amendment) Act (2015), which stipulates that supplementary expenditure exceeding 3 percent of the total approved budget requires Parliament’s approval.

The breakdown of the supplementary request includes Shs578 billion for settling the offtake arrangement between the Government and DEI Pharmaceuticals, Shs125 billion for addressing wage and pension shortfalls, and allocations for various government entities such as State House, the Office of the Prime Minister, and the Ministry of Finance.

The supplementary schedule was referred to the Budget Committee for examination.

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