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Opposition pin IMF on big lending to Uganda

Mathias Mpuuga engages IMF's Izabela Karpowicz at parliament

Mathias Mpuuga engages IMF's Izabela Karpowicz at parliament

The Leader of the opposition in Parliament (LoP) Mathias Mpuuga has held 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 took time to explain 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 and the authorities’ plan to increase households’ incomes and inclusive growth by fostering private sector development.

Mati said that Uganda was picked for the three-year financing package upon realization that its economy had been hit hard by the COVID-19 crisis which reversed decade-long gains in poverty reduction, a deterioration of the fiscal balances plus causing pressures on external buffers.

Mpuuga told the IMF team that questions about the loan have remained in the public domain since the government remained cagey on the intent of the loan, and also questioned the manner of how 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 of 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 and renders commitment charges paid in respect of the undisbursed funds meaningless.

Other MPs notably, Ibrahim Ssemujju Nganda (Kira Municipality), Betty Nambooze (Mukono Municipality) and Abed Bwanika (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.

MPs Ssemujju Nganda (R) and Nandala Mafabi

Karpowicz told the meeting that while 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.

The meeting agreed to further engage the legislators to have a better understanding of how the loan facility was structured and to identify the major gaps in it.

Comments

0 #1 peterson 2021-09-14 11:11
good observations
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+1 #2 Unguru Robert 2021-09-14 16:36
The problem with aging black African leaders is that they have lost direction due to obsession with power !

They borrow money from credible institutions like the IMF or even the World Bank, but quickly forget what they have borrowed the money for .

The borrowed money ends up in the pockets of their cronies or even family members and relatives. The sleeping tax payers have to later pay back for loans that did nothing.
that is Africa in the 21st century.
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0 #3 kabayekka 2021-09-14 19:42
Since it is the people of this country that is going to pay for all these debts, the people should be shown the timetable of payment for all these expensive international loans as clearly defined and understood by the President of Uganda, the Minister of Finance, and the lenders themselves.

This is to request the Uganda national medium to pass on this very important classified information to the public as soon as possible before this determined European lady releases her funds!
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0 #4 kabayekka 2021-09-16 01:28
It is necessary for this observer news media to show the truth of the matter.

The truth we put up in this media should not be a problem. We informed you of some of the world terrorists that are against American policy that they felt that some of the external policies of the USA seem to encourage dictatorship to continue to grow in many countries.

This is an opinion that should not frighten the job of many journalists if it is published!
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