Cabinet approves Shs950b loan for safe water

Mr Frank Tumwebaze, the minister of ICT and National Guidance

What you need to know:

  • The Finance ministry has also moved to tighten conditions for all government agencies that want to borrow loans.

Kampala. Cabinet has given the government the green light to borrow up to $251m (about Shs950b) for construction of safe water sources in more than 20 districts, municipalities, town councils and refugee hosting areas across the country.
The beneficiary districts and towns include Gulu Municipality, Adjumani Town Council, Busia, Budaka-Kadama, Namungalo-Kaliro, Kyegegwa, Namasale, Mbale Municipality, Butaleja, Budaka, Tirinyi and Kibuku.
Others are the refugee hosting districts of Adjumani, Arua, Moyo, Yumbe, Lamwo, Koboko, Isingiro Hoima, Ciforo, Djaipi, Rwampara, and Pakele.

Mr Frank Tumwebaze, the minister of ICT and National Guidance during press briefing in Kampala yesterday, said the loan will be used to provide safe water and sanitation facilities in areas that have had water scarcities, support provision of water and sanitation services to refugees and refugee hosting communities.
“The Cabinet approved the proposal to borrow up to $251m from the International Development Association for financing integrated water development management project. Many of these places have had problems with access to safe and clean water, so this project will help in addressing the gaps. It will also strengthen the national water monitoring and information system,” he said.

The approval of the loan request comes two weeks after the Accountant General, Mr Lawrence Semakula, reported to Parliament that Uganda had failed to withdraw Shs18.4 trillion the country borrowed from external lenders as of financial year 2016/2017.
According to Mr Semakula, the commitment fees paid for debt contracted but not yet expended had also increased by 281 per cent, an increase he attributed to the government’s failure to withdraw and use the contracted debt.
He attributed the failure to utilise the money to failure to secure counterpart funding, a condition many lenders impose before borrowers get their hands on the loans.

However, officials from the Finance ministry said they approved the loan request because the beneficiary agency, the National Water and Sewerage Corporation (NWSC), has always performed well when they requested for funds.
The Finance ministry has also moved to tighten conditions for all government agencies that want to borrow loans. Mr Gabriel Ajedra Aridru, the State minister of Finance in charge of General Duties, said for any ministry or government department to access a loan from international lenders, they must have a budget for counterpart funding.