AfDB commends Uganda on project performance

Mr Calleb Weggoro Nyamajeje, the executive director representing the East African region at the AfDB, while meeting ministry of Finance officials and sector ministers on Monday, said Uganda is part of the leading pack in project implementation along with Ethiopia, Rwanda and Kenya among others.

This comes amidst revision of the period of approval and processing of loan proposals by the government from more than a year to five months, there by allowing projects access funds from the bank.

“The change in project implementation approvals to five months will help in the utilisation of the funds,” Mr Nyamajeje said.

The AfDB chief, who is in Uganda to inspect the bank’s funded projects, said Uganda’s total loan portfolio now stands at $1.2b (Shs4.3 trillion) which has gone into funding various projects in infrastructure and energy sectors among others.

Some of the projects are; Mulago (Kiruddu Hospital worth $10.3m (Shs37b) and Kawempe Hospital worth $11.3m (Shs40.6b) and about $690,000 for supervision consultancy for both hospitals in advances.

Accordingly, he said the Africa Development Fund, an investment arm of the bank, had further approved about $300m (Shs1.08 trillion) for projects in the sectors agreed upon under Uganda’s Country Strategy Paper (CSP) for 2017-2021, which focuses on infrastructure development for industrialisation, skills and capacity development.

The CSP is expected to support government’s quest to transform Uganda into a prosperous and inclusive middle income economy as per its Vision 2040 and the National Development Plan 2 (NDP II). The CSP is articulated around the following two strategic pillars, - Infrastructure development for industrialisation, and skills and capacity development.

However, Mr Nyamajeje challenged the government to include skills development in their projects design because the bank has capacity to assist member countries through training so that they have the right capital to carry out complicated projects.

Loan processing
While addressing the media after the meeting, Finance minister Matia Kasaija, said they have resolved the loan proposal processing from more than a year to five months to avoid delays in implementing government projects as one of the problems piling pressure on government debt and borrowing.

“He said the AfDB warned that if they approve money and they take more than six months to start using the money, they will withdraw it and give it to another country.

Mr Kasaija said Cabinet engaged all stake holders and they have cut down the time taken to approve loan proposals to a maximum of five months. He also explained that compensation of people in the right of way was one of the causes of delays in the implementation of the projects.

“Project implementation delay has two major losses: You lose the development effect of the project and also interest rates on the borrowed money increases without due benefit of the project,” he said.

loan approvals
In a letter to Parliament recently, President Museveni approved the borrowing of about Sh15.7 trillion for infrastructure projects. However, he rejected 11 loan requests worth Sh2.5 trillion. The letter was intended to control Uganda’s rapidly increasing debt and interest payments, which are blamed on uneven contracts signed by government officials.

For the 2017/18 Financial Year, Uganda will spend Sh17 trillion on loan and interest payments. This is more than half of Uganda’s Sh29 trillion Budget.