Museveni Rejects Loans worth USD 1 Billion Top story

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In short
According to Kadaga, its only when the minister presents an acceptance letter from the president, that the loan request will be forwarded to the appropriate Committees for consideration and report back to Parliament.

President Yoweri Museveni has rejected 11 loans, amounting to 1 billion US Dollars that are not targeting infrastructural development.

The communication for the rejection was in a letter addressed to the Finance, Planning and Economic Development Minister and copied to Speaker of Parliament Rebecca Kadaga. In the letter, the President directed that all future loan requests to Parliament are to be personally endorsed by him.

Up to 27 loan requests had been presented to him by the finance ministry. However he approved only 16 of them and offered reasons for each rejection.

"I reject the loan of USD 200 million for fiscal transfers and fiscal management. Do we need a loan in order to learn how to transfer money?" the President questioned in his letter. He also rejected a USD 60 million loan intended for farming on computers (ICT) describing it as fancy.

"This is too much maridadi (fancy). The farmers need good farming practices, fertilizers, irrigation, bush clearing, ploughing and not computers because, even without computers, we know how much we produce," he said.

The President also wondered how government should guarantee a USD 13.79 million to Islamic University in Uganda, a private university, leaving out the other private universities. Another loan of USD 30 million from Korea meant for agriculture, the President said, "I do not accept the vague description of commercialization and enhanced productivity.

He also said there was no need for a strategy paper as the NRM Manifesto was a strategy paper in itself, as he rejected a USD 50 million for enhancing value chain agriculture.

"What do these mean? They want a consultant for country strategy paper! Really!" the President asked.

President Museveni said that loans should be infrastructural based and meant for roads, electricity, railways, water transport, Information and Communication Technology, telephones, piped water and irrigation systems. He added  that human capital like education, skills and health should be funded by the government of Uganda.

On Tuesday, the Speaker of Parliament confirmed receipt of the letter detailing the rejections adding that the President agrees with Parliament that we should avoid over burdening the state of Uganda with debts that do not add value to the Gross Domestic Product of the country. 

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With regard to human capital like education, skills and health, Kadaga told MPs that the President is of the view that these are required continuously and should be funded by Government.               
                          
Museveni proposes that the only aspect of human capital formation that can be gainfully funded by loans is some of the elements of infrastructure citing hospitals, government skills and science education centers. 

These, he says, are more time interventions that do not require recurrent expenditure but create durable capacity for health, education and technical skills.

"The President agrees that any loan to be contracted should be for elements of infrastructure, science and education, equipment for value addition and funds for soft loans through Uganda Development Bank." Kadaga told legislators. 

Kadaga said that moving forward, loan requests will tabled on the floor of parliament by the Finance Minister accompanied by a letter of approval from the President.  Prior to the new development, the finance minister would table any loan request and justify the request.
 
According to Kadaga, it's only when the minister presents an acceptance letter from the president, that the loan request will be forwarded to the appropriate Committee for consideration.


Below is the complete list of rejected loans and reasons for rejection.

1.   US Dollars 13.79 million for the Islamic University in Uganda. This University is private, If we guarantee their loans, how about Mukono, Nkozi, Ndejje, Basajjabalaba, etc?

2.       US Dollars 30 million from Korea for Agriculture. I do not accept the vague description of "commercialization and enhanced productivity." What do these mean?
 
3.       US Dollars 100 million Islamic Development Bank for "poverty reduction". What do these mean? If it is for Technical Schools, it should go to Education. If it is for industrial equipment and machine tools, it should be in State House or Ministry of Industry and we should have the freedom to buy equipment from the best sources.
 
4.       I reject the loan of US Dollars 200 million for "fiscal transfers and fiscal management". Do we need a loan in order to learn how to transfer money?
 
5.       I reject the US Dollars 40 million for the vague target of Gender Based Violence. How will you know which women fought with which husband? Let us get equipment for women groups to do maize milling, wine-making, etc. Equipment for value addition, not seminars. The survivors of violence, if confirmed, can be supported by our own budget.
 
6.       I reject the US Dollars 60 million for "nutrition, incomes, climate change" etc, for Eastern and Central Africa. This is vague.
 
 
7.       I reject the US Dollars 60 million because it aims at vague elements such as "hunger, eradication of poverty, quality of education, clean water, health, well-being", etc. How can you meaningfully address all these elements? Let the money be used for irrigation. I will support it, then.
 
8.       I reject loan of US Dollars 101 million because of the nebulous aims of "household incomes, food security, sustainable natural resources management". If it is for agriculture, let us use it for irrigation.
 
9.       Kampala - Jinja Expressway of US Dollars 200 million and of US Dollars 100 million should not be guaranteed by the State. The money should be recovered through the road tolls. The loan is good but no guarantee.
 
10.   I reject the US Dollars 60 million of farming on computers (ICT). This is too much maridadi (fancy). The farmers need good farming practices , fertilizers, irrigation, bush-clearing, ploughing and not computers because, even without computers, we know how much we produce.
 
 
11.   I reject loan of US Dollars 50 million for "enhancing value chain of agriculture". What do these mean? They want a "consultant" for "country strategy paper" Really? Do we need a strategy paper? Our Manifesto is the strategy paper.

 

About the author

Olive Nakatudde
Olive Nakatudde is a URN journalist based in Kampala. Nakatudde has been a URN staff member since 2013.

Nakatudde started out in journalism in 2009 with Dembe FM radio in Kampala. In 2012, Nakatudde joined Voice of Africa as a political reporter. She has been a photographer since her journalism school days at Makerere University.

Nakatudde is interested in good governance and public policy, which she reports on intensively from the Uganda Parliament. She is a keen follower of cultural affairs in Buganda Kingdom and covers the kingdom's Lukiiko (parliament). Nakatudde also reports on education and health.