OPPOSITION MPS CASTIGATE IMF OVER LOANS EXTENDED TO UGANDA
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By Joel Mugabi
MPs, headed by Leader of the opposition in Parliament Mathias Mpuuga, have expressed concern that the International Monetary Fund (IMF) had continued to extend billions of dollars in loans to Uganda despite her ballooning debt burden.
On Monday, Mpuuga and other MPs held discussions with the IMF country representative to Uganda Izabela Karpowicz, and chief of mission Amine Mati, under the auspices of the Parliamentary Forum on the IMF and the World Bank as the donor agency sought to brief the opposition on development programs the IMF and World Bank support in the country.
Mati addressed the opposition MPs via zoom from Washington DC. Mati noted that in June 2021, the IMF Executive Board approved a $1bn loan facility for Uganda under the Extended Credit Facility (ECF) arrangement as a way of supporting Kampala’s post-Covid19 recovery efforts.
Mati explained that IMF was concerned about how badly the Covid19 pandemic had hit Uganda, throwing millions back into poverty, and upsetting fiscal balances and external buffers in an unprecedented economic reversal. He added that the IMF was convinced the loan facility fitted well into the Ugandan Government’s programs geared towards boosting household income, promoting inclusive growth and encouraging private sector development.
But the opposition MPs noted that despite the good intentions the IMF might have, there was need for the agency to pile more pressure on Government to explain how it intended to spend the loan. The MPs also tasked IMF to explain why it had made it a habit to extend loans that Parliament knew nothing about.
“We are surprised that seeking Parliamentary approval for the loan wasn’t critical for the IMF. 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,” said Mpuuga, also the Nyendo-Mukungwe MP. In response, Mati told Mpuuga that the IMF directly deals with Government and Bank of Uganda, and always assumes that the two institutions respect the laws on borrowing.
Former Leader of Opposition and Budadiri West MP Nandala Mafabi (FDC) demanded to know if the IMF had interested itself in the Auditor General’s report that indicated that Uganda had 12 unutilized loans worth Shs1.3tn. Mafabi, also a board member of the Parliamentary Forum on the IMF and the World Bank, explained that Uganda’s poor loan absorption capacity undermines the attainment of planned development targets and renders commitment charges paid in respect of the undisbursed funds meaningless, as the Auditor General had noted in his report.
Kira Municipality MP Ibrahim Ssemujju Nganda (FDC) tasked IMF to explain what criteria were followed in arriving at the $1bn loan figure. MP Ssemujju also asked for answers on whether the IMF was mindful of Uganda’s skyrocketing public debt.
In response to Ssemujju, Karpowicz assured the opposition MPs that although Uganda’s public debt was high, there was nothing much to worry about it since it was sustainable, especially based on the size of the country’s GDP compared to the size of the debt.(For comments on this story, call, text or whatsapp us on 0705579994, 0779411734, 0200900416 or email us at firstname.lastname@example.org).