Parliament has given the green light for the government to secure loans of US$15.22 million and US$73.15 million from the African Development Bank Group.
These funds are earmarked for the construction of the Laropi-Moyo-Afoji Road and the Katuna-Muko-Kamuganguzi Road.
This approval came after a motion was introduced by Henry Musasizi, the Minister of State for Finance, Planning, and Economic Development (General Duties), during a plenary session led by Speaker Anita Among on Thursday, January 9, 2025.
The initiative stems from a government proposal submitted on September 18, 2024, which sought additional financing from the African Development Fund for these projects.
The proposal was subsequently sent to the Committee on National Economy for detailed examination.
Musasizi highlighted that the project is designed to create all-weather roads that will enhance tourism from South Western Uganda and improve access to mining areas.
Additionally, it aims to strengthen regional connectivity with a permanent bridge at Laropi and establish a one-stop border post between Uganda and South Sudan.
“The project scope remains the same as initially approved in August 2020. It includes four components; road and bridge civil works, project implementation support services, institutional support, and compensation for project-affected persons,” Musasizi stated.
The Chairperson of the Committee on National Economy, Hon. John Bosco Ikojo described the loan facility as beneficial due to its national reach covering three regions of the country.
“The US$73 million loan from the African Development Fund will be repaid over 50 years with a 10-year grace period. It carries no interest but includes a 0.1 per cent annual service charge on the disbursed balance” he said.
Parliament also approved a government request to borrow over Shs171.63 billion from Agence Française de Development (AFD) for the Lake Victoria Water and Sanitation Project.
Musasizi said the funding aims to expand the distribution network, enhance the New Katosi Water System and increase clean water access in the Greater Kampala Metropolitan Area (GKMA).
The loan approval increases Uganda’s external debt exposure by US$252.83 million and raises the public debt share of GDP by 0.13 per cent
Musasizi further assured Parliament that the debt remains manageable under the Charter of Fiscal Responsibility.
