Finance minister Maria Kiwanuka has asked the private sector to fund natural resource development activities.
This, she said will enable the country get money to invest in Information and Communications Technology, irrigation, roads, innovations and electricity to attain inclusive growth in a youth dominated country.
Ms Kiwanuka said the discovered oil, estimated at 3.5 billion barrels alone, cannot provide inclusive and sustainable development but can be used to put in place an enabling environment for the agricultural sector to grow.
“We have oil but we look up to you (private sector) to make sure that the resource is financed properly to propel sustainable inclusive economic development. Invest in the resources below the ground to translate into sustainable resource above ground,” Ms Kiwanuka said.
The minister was speaking at a public sector workshop organised by Barclays Bank in Kampala on Tuesday. The bank is seeking to offer borrowing options for infrastructure development.
Mr Raj Shah, the head of East Africa investment banking said East African countries should not rely on single funding options since each financial support source has limitations.
“You cannot rely on a few funding options. Every source has its limitations,” Mr Shah said.
Currently, Uganda borrows from the International Monetary Fund, African Development Bank, World Bank and other countries to fund development projects in the country.
Ms Kiwanuka, however, said the priority source of funding should be first, domestic resource mobilisation and then borrowing options as last alternative and on a low interest rate if the government is to break dependence on aid that has both political and economic strings on a borrowing country.
The minister referred to the Budget she read recently as the best financial plan for the country as it taps into the informal sector particularly agriculture that for long has not been taxed yet the sector has potential to contribute to the national resource envelope.
Uganda’s debt burden
Uganda borrowed close to Shs1 trillion by the financial year ended June 30 to carry out different projects (mainly infrastructure) raising fears that the country may be trapped into a debt burden as it was before in 1990s to early 2000. Ms Kiwanuka, however, said Uganda’s debt repayment is below 30 per cent of the Gross Domestic product and borrows most of the loans at low interest rates on long term periods lasting more than 20 years.