The latest Auditor General’s report revealed that the Government has a total of sh18 trillion it borrowed lying idle because of delayed implementation of projects
MPs on the parliamentary committee on national economy have expressed concern regarding the high rate at which the Government borrows funds to implement its projects.
The committee chairperson, Syda Bumba, said from a report they have compiled, out of 150 projects the Government obtained loans to fund since the 2006, only 34 projects have been successfully implemented.
“There are so many loans Government got, which are yet to be utilised partly because the Government could not provide counterpart funding,” Bumba explained.
The latest Auditor General’s report revealed that the Government has a total of sh18 trillion it borrowed lying idle because of delayed implementation of projects.
Buvuma County MP Robert Migadde raised concern that the rate at which the Government is borrowing is not sustainable because there is a mismatch between the tax to GDP ratio of 13% and the debt to GDP ratio of 33%, which implies it lacks the necessary revenue-generation capacity to pay back the debts.
“It is unbelievable that even for a counterpart funding for the UKEF loan, the Government had to get another loan from the Standard Charted Bank to raise the money.
"That even stops being counter funding. The rate at which we are borrowing is so high. We also have loans for the Standard Gauge Railway, the oil pipeline, and the oil refinery. We need to reduce the appetite of borrowing,” Migadde argued.
The MPs made the remarks today at Parliament while the finance ministers Matia Kasaija, David Bahati and works and transport minister Ntege Azuba were appearing before them to defend loan requests for constructing Kabaale International Airport to aid the transportation of equipment for oil production.
Government is seeking a total of €270.2m from the UK Export Finance (UKEF) and another €37.1m from the Standard Chartered Bank (London) to finance the construction of the airport.