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Parliament tightens guideline on loan requests

By Mary Karugaba

Added 21st September 2016 08:21 AM

Finance state minister in charge of planning David Bahati said the ministry has received the guidelines and plans to circulate them to all ministries and agencies.

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Finance state minister in charge of planning David Bahati said the ministry has received the guidelines and plans to circulate them to all ministries and agencies.

PIC: Finance state minister in charge of planning, David Bahati and the minister of state for industry Michael Werikhe appearing before the finance committee of Parliament on September 201, 2016. Photos by maria wamala

MPs have written to the Ministry of Finance giving new guidelines that will be followed before a loan request is passed by Parliament.

The MPs on the Parliamentary Committee on economy that scrutinizes loan requests said Parliament will not approve any loan request unless the implementing agency or ministry presents a previous loans status performance report, appraisal reports, recruitment and strategic plans and the availability of counterpart funding.

Chaired by former Finance Minister Syda Bbumba, the MPs said the new guidelines follows World Bank’s move to freeze new lending to government due to poor absorption.

“We don’t want to approve a loan and then the sector fails to implement the loan. If these guidelines are followed, there will be no problem,” Bbumba said.

Finance state minister in charge of planning David Bahati said the ministry has received the guidelines and plans to circulate them to all ministries and agencies.

 However he said the Ministry has also taken action and is developing new stringent guidelines on utilization of loans.


“We are working hard to ensure that the issues raised by World Bank are addressed especially the social issues on Fort-Portal- Kamwenge road. Hopefully by end of this year, they will have reinstated the lending,” Bahati said.

World Bank last week announced a freeze on new lending to Uganda due to low loan absorption. According to the Ministry of Finance, of the $1.2b lent to Uganda, only about $600m had been spent by April 2016.

 

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