Parliament has postponed the approval of government loan requests meant to capitalise and guarantee additional financing for Uganda Development Bank (UDB).
The government sought approval to borrow up to $125 million from the Arab Bank for Economic Development in Africa (BADEA) and $25 million from the OPEC Fund for International Development to support UDB.
It also requested guarantees for UDB to borrow $40 million from the Islamic Development Bank, $30 million from the Islamic Corporation for the Development of the Private Sector, and $30 million from the International Islamic Trade Finance Corporation.
Presenting a report on the loans, National Economy Committee Chairperson John Bosco Ikojo recommended approval of all loans except those from BADEA. He noted that BADEA had not provided draft financing agreements or details on borrowing through the private window.
“The draft agreements must be submitted for Parliament to review their terms as required by Article 159 of the Constitution and Section 36 of the Public Finance Management Act,” Ikojo said.
He also urged the Finance Ministry to ensure loan proposals are sourced from affordable financing to ease Uganda’s growing debt burden.
Speaker Anita Among stressed the need for due diligence before Parliament approves the loans.
“It is good to support UDB, but we should not fund it in bits. We need to see the due diligence done by the UDB Board before approving these loans,” she said.
