The Leader of the opposition, Mathias Mpuuga yesterday questioned why the International Monetary Fund approved a loan facility to Uganda without seeking the input of Parliament.
He made the query during discussions with the country representative of the International Monetary Fund (IMF), Izabela Karpowicz, and the donor agency’s chief of mission, Amine Mati.
The meeting, held under the auspices of the Parliamentary Forum on the IMF and the World Bank was intended to brief the opposition leadership on government programs supported by the two lending institutions.
Addressing the meeting via zoom from Washington DC, Mati explained that the $ 1 billion loan facility for Uganda which was approved by the IMF executive board in June under the Extended Credit Facility (ECF) arrangement to support the post-Covid-19 recovery efforts.
Mati said that Uganda was picked for the three-year financing package upon realisation that its economy had been hit hard by the Covid-19 pandemic.
Mpuuga told the IMF team that questions about the loan have remained in the public domain since the government remained cagey on the intentions of the loan, and also questioned the manner of in which the IMF approved the loan without first seeking parliamentary approval.
“We are surprised that seeking parliamentary approval for the loan wasn’t critical for the IMF,” Mpuuga said, adding that, “some of these conditions that are subject to the laws of the land should be respected because oversight begins with respect to the laid down procedure.”
Mati however said that since the IMF deals directly with the government and the central bank, the donors took it that there was conformity with the laws by the time applied for the loan.
Budadiri West MP, Nathan Nandala Mafabi who is also a board member of the Parliamentary Forum on the IMF and the World Bank tasked the IMF team to explain whether they took into consideration Uganda’s absorption capacity following the Auditor General’s report that indicated that many loans have not been utilized.
In March this year, the Auditor General reported that 12 loans valued at Shs 1.3 trillion expired before disbursement to respective ministries and government entities which undermines the attainment of planned development targets.
Other MPs notably, Ibrahim Ssemujju Nganda, for MP Kira Municipality; Betty Nambooze, MP Mukono Municipality and Abed Bwanika, MP Kimanya – Kabonera raised questions on how the IMF came up with the figure for the loan and as to whether it cared about Uganda’s high public debt.
Karpowicz told the meeting that although Uganda’s public debt is high, it does not cause so much concern since its GDP is better than that of many other countries.
“This is why domestic revenue is a key component of the program [ECF],” she said.