Parliament Convenes to Debate Gov’t Unending Borrowing Appetite & UPDF Deployment In S.Sudan

By Andrew Irumba Katusabe [Sankara]

Kampala—Parliament has convened for its 24th sitting this afternoon, with a packed agenda dominated by government borrowing proposals and a motion on the deployment of Ugandan troops to South Sudan.

Top on the order paper is the government’s request for approval to borrow up to USD 190,988,556 (UGX 700.155 billion) from Stanbic Bank. The funds are earmarked for the buyout of Umeme Limited, Uganda’s largest electricity distribution company. The motion, presented by the Minister of Finance, Planning and Economic Development, seeks to facilitate the government’s plan to retake control of the power distribution sector following the expiry of Umeme’s concession.

The government argues that acquiring Umeme will enable Uganda to have direct oversight of the electricity distribution sector, potentially leading to lower tariffs and improved service delivery. However, the motion has sparked debate among MPs concerned about the growing public debt burden.

In addition to the Umeme buyout loan, Parliament is also considering several other government borrowing proposals. These include:

• A request to borrow up to USD 100 million (UGX 366 billion) from the Arab Bank for Economic Development in Africa (BADEA) private window, USD 50 million (UGX 183 billion) from BADEA public window, and USD 25 million (UGX 91.5 billion) from the OPEC Fund for International Development (OFID). The funds will be used to capitalize Uganda Development Bank Limited (UDB).
• A motion to guarantee borrowing of up to USD 40 million (UGX 146.4 billion) from the Islamic Development Bank (IDB), USD 30 million (UGX 109.8 billion) from the Islamic Corporation for the Development of the Private Sector (ICD), and USD 30 million (UGX 109.8 billion) from the International Islamic Trade Finance Corporation (ITFC), also intended for UDB financing.

Meanwhile, Parliament is also debating a motion authorizing the deployment of the Uganda Peoples’ Defence Forces (UPDF) to the Republic of South Sudan. The deployment is in line with a memorandum of understanding on defence cooperation and a status of forces agreement signed between Uganda and South Sudan. The government says the move is aimed at stabilizing the region and safeguarding Uganda’s security and economic interests.

The Minister of Defence and Veteran Affairs, who tabled the motion, emphasized the importance of Uganda’s continued involvement in regional peacekeeping initiatives. Nonetheless, some lawmakers have raised questions about the cost implications and the risks involved in deploying troops abroad.

The day’s proceedings will conclude with the second and third readings of the Engineering Professionals Bill, 2024, which seeks to strengthen regulation in the engineering sector and enhance professional standards.

As Parliament grapples with these weighty issues, concerns persist over the sustainability of Uganda’s rising debt levels and the transparency of military deployments.

According to the Ministry of Finance, Planning and Economic Development, Uganda’s public debt stock stood at UGX 96.1 trillion (about USD 25.3 billion) by December 2024, with UGX 59.3 trillion in external debt and UGX 36.8 trillion in domestic debt.