Is a drop in Uganda’s debt ratio a breather to borrow more?
By Edward Baliddawa
Recently Bank of Uganda reported that Uganda’s debt to GDP ratio had dropped from the earlier anticipated 50.1% level to 45.5% at the ending of June 2021 of the FY 2020/21. It was reported that Uganda’s debt stock had risen to Shs. 67.4 trillion
The drop in the country’s debt ration to the GDP was attributed to an increase in the country’s economy (GDP) from the earlier anticipated Shs 139.7 trillion to 148 trillion that was recorded at the ending of FY 2020/2021.
This drop in our debt ration to the GDP should come as a big sigh of relief to those that are managing the affairs of our country. It offers a window of breathing. As to whether the sigh of relief will be used to borrow a little more is something that we have to watch and see.
On each and every occasion that the Government has presented requests to Parliament for approval to borrow, the question that the Parliamentarians and indeed the wananchi have asked loudly and passionately is about where the earlier borrowed money had gone and what it had done.
Sometimes, this question has resulted in acrimony and stalemate where the government side accuses those opposing further borrowing of blackmail and not being patriotic enough.
On the other hand, those opposing the borrowing would accuse the government side of greed and not being nationalistic enough to see how much the debt burden is weighing too heavy on the shoulders of the wananchi.
In all, this altercations and counter accusations, one thing that is clear is that somehow the people in Ministry of Finance continue to fail or to be hesitant to offer open information on what the borrowed money has done.
This exercise of sharing information with the public ought to be a culture of the Ministry of Finance.
Once open and proper information and explanation is offered, certainly the wananchi however skeptical they have forced to become, will always offer a benefit of doubt.
There is no reason therefore for such valuable information on what the borrowed money and certainly the money collected in form of taxes by the tax body URA should be denied to the public.
For example, here below is what I have been able to able to find out from the various sources available about the money that Uganda has borrowed over time and what it was intended for.
Some of the big infrastructure projects funded by loans
| Project | Lending Institution | Amount | |
| 1 | Karuma Dam | China Exim Bank | $1.7bn |
| 2 | Isimba Dam | China Exim Bank | $570mn |
| 3 | Bujjagali Dam | International Finance Corporation & others | $862mn |
| 4 | Entebbe–Kampala Expressway | China Exim Bank | $476mn |
| 5 | Vurra-Koboko-Oraba Road | World Bank | $52.8mn |
| 6 | Kampala Northern By-pass | European Union | €67.4mn |
| 7 | Hoima–Butiaba–Wanseko Road | African Development Fund | $179.5mn |
| 8 | Kabale-Kisoro-Buanagana Rd | African Development Bank | $107mn |
| 9 | Fort-Portal-Bundibugyo-Lamia Rd | African Development Bank | Shs.217.8bn |
| 10 | Gulu-NimuleRd | JICA, World Bank | $102mn |
| 11 | Masaka-Bukakata Rd | OPEC | $70mn |
| 12 | Rukungiri-Kihihi-Ishasha-Kanungu Rd | African Development Bank | $57mn |
| 13 | Ntungumao-Mirama HillsRd | Trade Mark East Africa -Uganda | $22mn |
| 14 | Kayunga-Galiraya Rd | African Development Bank | - |
| 15 | Bumbobi-Bubulo-Lwakhakha Rd | African Development Bank | $42mn |
| 16 | Nyakahita-Kazo-Kamwenge-FortPortal | African Development Bank | Shs. 300bn |
| 17 | Kigumba-Masindi-Hoima-Kabwoya Rd | African Development Fund | $150mn |
| 18 | Kyenjonjo-KabwoyaRd | World Bank | $145mn |
| 19 | Mbarara-Ntugumo-Kabale-Katuna Rd | European Union | €116mn |
| 20 | Soroti-Dokolo-Lira Rd | World Bank, Uganda Government | Shs. 153.1bn |
| 21 | Kapchorwa-Suam Rd | ADB, ADF | $105.76 |
| 22 | Muyembe-Nakapiripiriti Rd | International Development Bank | $114.12mn |
| 23 | Kampala-Mpigi Expressway | African Development Bank | $150mn |
| 24 | Guarantee for Credit Lines to UDB | African Development Bank | $15mn |
| 25 | Support to Uganda Intergovernmental Fiscal Transfers Programme | IDA of World Bank Group | $200mn |
| 26 | Balance of Payments and Budget Support | IMF | $491.5mn |
| 27 | Upgrading & Construction of National Oil Roads | China Exim Bank | $456.3mn |
| 28 | Uganda Irrigation Development and Climate Resilience Project | International Development Agency | $195mn |
| 29 | Irrigation Schemes Across the country | UK Export Finance Facility | €101.8mn |
| 30 | Upgrading Rwenkunye-Apac-Lira-Acholibur Rd | International Development Agency | $210mn |
| 31 | Entebbe International Airport Expansion | China Exim Bank | $200mn |
| 32 | Loan to mitigate the negative effects of Covid-19 on the economy | World Bank | $300mn |
| 33 | Construction & equipping of Oncology and Diagnostic center in Gulu District | UNICREDIT Bank of Austria | Shs. 31bn |
| 34 | Financing Budget Deficit for FY 2020/21 | IMF | $600mn |
| 35 | Solar Powered Water Pumping Systems for lowest safe water coverage | China Exim Bank | Shs. 111bn |
| 36 | Support Irrigation for the Climate-Resilient Project | International Development Association | Shs. 628bn |
| 37 | Construction of Kabaale International Airport | UK Export Finance Facility | $318mn |
| 38 | Uganda Rural Electricity Access | African Development Bank | Shs. 4.2bn |
| 39 | Farm Income Enhancement II | African Development Bank | Shs. 46.4bn |
| 40 | Markets and Trade Improvement | African Development Bank | Shs. 24.8bn |
| 41 | Rural Electrification Project | African Financing Development | Shs. 136.4bn |
| 42 | Inland Port at Bukasa | AKA | Shs. 28.8bn |
| 43 | Four Industrial parks | China Exim Bank | Shs. 131.4bn |
| 44 | National Transportation Backbone III | China Exim Bank | Shs. 57.2bn |
| 45 | One Regional Common Infrastructure V | International Development Agency | Shs. 40.8bn |
| 46 | Additional Finance to E.A Public health | International Development Agency | Shs. 14.5bn |
| 47 | Development Response to Displacement | International Development Agency | Shs. 58bn |
| 48 | NUSAF | International Development Agency | Shs. 275.4bn |
| 49 | Energy for Rural Transformation | International Development Agency | Shs. 45.6bn |
| 50 | Skills Development Projects | International Development Agency | Shs. 42.1bn |
| 51 | Agriculture Cluster Development Project | International Development Agency | Shs. 49.4bn |
| 52 | Grid Rural Electrification | International Development Bank | Shs. 26.1bn |
| 53 | Mirama – Kabale Transmission Lines | International Development Bank | Shs. 25.4bn |
| 54 | Restoration of Livelihood | International Development Bank | Shs. 30.9bn |
| 55 | Profila | IFAD | Shs. 46.5bn |
| 56 | Procurement of Earth Moving Equipment | JBIC | Shs. 367.3bn |
| 57 | Rehabilitation of Kayunga & Yumbe Hospitals | OPEC Fund | Shs. 8.6bn |
| 58 | Kayunga and Kamuli Rural Electrification Project | OPEC Fund | Shs. 8.6bn |
| 59 | Uncommitted Trade Facility | PTA | Shs. 392.6bn |
Disclaimer: Note that this information of borrowed money and what it was borrowed for doesn’t in anyway offer an accountability of how actually the money was utilised. It doesn’t attempt to qualify that all the borrowed money was used on the respective item or whether all the indicated borrowed money was actually disbursed or received by the Ministry of Finance.
The author is former MP for Kigulu North
