The Parliamentary Budget Office has cautioned Members of Parliament against approving the €126,440,160.68 (Shs508.44 billion) loan request by the government for the construction of the 97-kilometer Lusalira-Nkonge-Ssembabule road.

The proposed funding terms by Citi Bank would result in Ugandan taxpayers paying an additional Shs300 billion in interest.

The warning rose after scrutinizing the documents submitted by the Ministry of Finance, revealing that if approved, the highly commercial loan would burden Ugandan taxpayers with a total of Shs808.3 billion. Additionally, the government would need to pay Shs141.47 billion in Value Added Tax on behalf of the lender.

“The total borrowing is highly commercial with a grant element of negative (-20.3%). Uganda’s Debt Management Strategy guides that Government shall borrow for social services development under highly concessional terms with a minimum grant element of 35%. The Minister provided no evidence to show this was the cheapest financing option for this project, and its effective interest rate exceeds the recommended benchmark for external borrowing for projects on non-concessional terms,” noted the Parliamentary Budget Office in documents submitted to Parliament’s National Economy Committee.

The loan request followed a commercial contract signed between the Uganda National Roads Authority (UNRA) and M/S Technovia S.A, in joint venture with Technovia Angola, on September 12, 2022. The commencement of civil works is pending financial clearance by the government.

Ahead of the planned scrutiny of the loan, the Parliamentary Budget Office, which provides technical advice to Parliamentary Committees, raised several red flags on the loan proposal. They recommended that the government rectify these issues before the loan is considered or renegotiate the entire deal due to its high cost.

“Uganda’s debt remains sustainable at moderate risk of debt distress. However, given the increased rate of debt accumulation, the increased share of debt service obligations, and less than proportionate growth in domestic revenue collection over the past five years, it is necessary that the Minister of Finance renegotiate the terms offered by Citi Bank or consider alternative and cheaper financing options to ease the pressure on the struggling fiscal space in the country,” the Budget Office advised.

In addition to paying Shs300 billion in interest, the government will bear the burden of paying all the taxes arising under this loan, tentatively marked at Shs141.47 billion. The project cost is Shs534.9 billion exclusive of Value Added Tax, with Shs479.8 billion funded by Citi Bank and Shs55.11 billion (10.3%) by the Government of Uganda.

Concerns Over Financial Commitments and Legalities

The National Economy Committee has requested the Ministry of Finance to clarify whether signing the contract in September 2022 amounts to entering a financial commitment. Parliament also faulted the government for not submitting the contract signed by Uganda National Roads Authority (UNRA).

“There is a need for clarity on whether the Solicitor General had cleared it. There is a need for legal guidance on whether signing the contract amounts to entering a financial commitment contrary to Section 23 of the Public Finance Management Act 2015, or whether the clearance by the Government makes it pending approval of Parliament,” highlighted the documents.

The Budget Office also questioned the discrepancies in the rates submitted by the Ministry of Finance. The draft financing agreement indicates that the commitment fees shall be computed at a rate of 25% of the margins, resulting in a commitment fee of 1.25%. However, the Ministry of Finance’s brief to Parliament placed this rate at 1.75%, prompting the National Economy Committee to demand clarification.

John Bosco Ikojo, Chairperson of the Committee of National Economy, revealed that although the Committee was called from recess to handle the loan due to its urgency, the meeting flopped because top officials from the Ministry of Works, UNRA, and the Ministry of Finance failed to present the loan.

“Unfortunately, this morning, we received a call from the Ministry of Finance, expressing their inability to appear before the Committee to officially present this loan. However, this does not stop our business as a Committee. We shall continue understanding the loan so that when we later interact with the Executive, members are well-informed about the loan and its components,” said Ikojo.

Maurice Kibalya (Bugabula South) pointed out several loopholes in the loan, remarking, “One of the things we have realized with this loan is that it is very expensive. Government isn’t supposed to get commercial loans. Most loans to the government have a grant component and a longer grace period, which isn’t present in this loan. Additionally, this loan is managed by multiple agencies, each wanting to make money. So, the whole loan is suspicious.”

Kibalya also questioned why the latest loan bore the approval letter from the Prime Minister, Robina Nabbanja, despite the President’s directive requiring all loans to be approved by him. This prompted the Committee to seek clarification if the President rescinded his earlier directive.

Robert Migadde (Buvuma County) questioned the urgency behind recalling the Committee from recess under the pretext that the loan request would be top of the agenda when Parliament resumes next week, only for the Executive to snub the meeting.

“This makes us question who we should listen to because we were informed the loan is urgent. Now the people requesting the loan are acting like it isn’t urgent. We wasted our fuel driving from the constituencies during recess when we are supposed to be in our constituencies,” remarked Migadde.

However, this is not the first loan to raise suspicion, in May 2023, Parliament witnessed drama when the government sought clearance to borrow €500 million (Shs2 trillion) from Amarog Capital Ltd Sovereign Infrastructure Group, later discovered to be a private money lender in Kenya, prompting the government to withdraw the loan request.

The government, in documents submitted to Parliament, defended the loan request, arguing that the existing gravel road is in fair condition with surface corrugation, potholes, inadequate drainage, and poor alignment, necessitating fresh works.

“The current gravel state of this road does not meet the expected level of service, leading to high vehicle operating costs, poor connectivity, and low economic activities in the project area,” read the documents.

In the same turn of events, recently UNRA suspended the road construction works on Mityana-Mubende road over financial constraints. The Sh395 billion project which began in April 2021, was scheduled to be completed two months ago but is currently 50 percent complete.The work was carried out by Energoprojekt Niskogradnja, a Serbian civil engineering and construction company.

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The hearing of the bail application of the former Rubaga Deputy Resident City Commissioner (RCC), Anderson Burora Herbert, has flopped over the absence of the trial magistrate.

Burora was arrested last month and detained at Kira Road police station and later at Central Police station. He was arraigned before the Buganda Road Chief Magistrate and subsequently remanded to Luzira.

He is facing charges of hate speech and spreading malicious information against Speaker of Parliament Anita Among.

Prosecution alleges that between March 2024 and June 2024 in the areas of Kampala District or thereabout, while using a computer via X handle shared information that is likely to ridicule, degrade, demean, and promote hostility against a person of the Anita Annet Among, the Speaker of Parliament of the Republic of Uganda.

Through his lawyers, led by David Kamukama, he applied for bail; however, the prosecution led by Richard Birivumbuka, asked for adjournment to determine the authenticity of his sureties.

However, earlier today, the court couldn’t proceed due to the absence of trial magistrate Ronald Kayizi and was subsequently remanded until July 25, 2024.

In the previous court session, the defense’s lawyer, David Kamukama, said the charge sheet, the way it stands, defends the rules of drafting a charge sheet. The person appearing in court should be given facts and understand the cases he committed. The charge was later amended to introduce new charges.

“The charge sheet before the court alleges that he made work between March and June. The words were not produced. Surely the works must be specific; they can’t be guessed. He could have made words about greetings, praising her but saying that whatever you made between March and June is improper,” he said.

He said that the complainant has failed to prove that the Twitter handles she claims to have been used belong to Burora. Any person can use it, including the complainant, and it alleges that it is our client. He asked that the matter be dismissed.

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President Yoweri Museveni will tomorrow, Saturday, July 20 address the nation focusing on wealth creation and national issues, the Presidential Press Unit has announced.

The Presidential Press Unit is pleased to announce that the President of the Republic of Uganda Yoweri Kaguta Museveni will address the nation tomorrow Saturday, July 20, 2024 at 8 pm,” read the statement.

“During the address, the President will focus on the issue of wealth creation and other crucial matters of national importance,” the statement confirmed.

The address will be broadcast live on all radios and television stations and other digital platforms.

Museveni has over the time established that wealth creation funds are meant for wealth and job creation in the sectors of agriculture, industry, services and technology.

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Ms Lynda Biribonwa, an environment, health, and safety specialist, has been appointed Chairperson of the Board of Directors of the Petroleum Authority of Uganda (PAU), replacing Ms Jane N. Mulemwa (PhD), whose term of office ended in May 2024.

Following her successful vetting and approval by the Parliamentary Appointment Committee, led by the Speaker of Parliament in June 2024, President Yoweri Museveni appointed Ms Biribonwa as the new Chairperson and six others as Members of the PAU Board on June 18, 2024, in accordance with Section 17 (2) of the Petroleum (Exploration, Development, and Production) Act, 2021.

Ms Biribonwa, a certified Lead Environmental Management Systems Auditor with over twenty-three years of experience in environment, health, and safety at strategic, policy, compliance, and practitioner levels, brings her environmental engineering and finance expertise to the Board. She holds an MBA in Oil and Gas from CWS School of Energy, London, UK; an MSc in Environment and Development from the University of Reading, UK; and a BA (Hons) in Environmental Management and Business Administration from Keele University, Staffordshire, UK.

Before her appointment, Ms Biribonwa served on the previous Board as the head of the Governance, Board, and Audit Committee. This committee develops and recommends policies and procedures to ensure sound governance practices are in place and guides the Board in fulfilling its oversight role.

Ms Biribonwa brings experience in environmental engineering and finance to the Board. She holds an MBA in Oil and Gas from CWS School of Energy, London UK, a MSc in Environment and Development from the University of Reading, UK and a BA (Hons) in Environmental Management and Business Administration from Keele University, Staffordshire, UK.

During her tenure at the second Board, Ms. Biribonwa headed the Governance, Board and Audit Committee. This committee develops and recommends policies and procedures to ensure sound governance policies and practices are in place and assist the board in fulfilling its oversight role. It also provides a structured reporting line for the internal audit function of the Authority.

Others appointed to the new Board include Mr Bernard Ongodia, a Geophysicist with over twenty years of experience in Petroleum Exploration, Development, and Production, who currently serves as the Principal of Uganda Petroleum Institute, Kigumba (UPIK); Mr Adrian Bukenya, the Country Director for the Mastercard Foundation in Uganda, with over twenty years of global professional experience in the energy, infrastructure, and financial services sectors; and Mr. Innocent Kihika, an Energy Lawyer with over twenty-five years of experience in Energy, Mining, and Infrastructure Law. The trio previously served on the Board and will be serving their second term as members.

The new entrants to the seven-member Board include Ms Oduka Ochan Achan, a finance specialist with over forty-two years of experience in financial planning, marketing, strategic planning, program/project design management, institutional and organisational development, communication, and banking; Ms Solome Galiwango, a seasoned professional with over twenty years of experience, ten of which are in the energy sector. She is a member of the Association of Energy Engineers and the Energy Efficiency Association of Uganda; and Prof. Vincent Bagire, a management specialist with over twenty-seven years of teaching experience in strategic management. Prof. Bagire is the Dean of the Faculty of Graduate Studies and Research at Makerere University Business School.

Ruth Nankabirwa, the Minister of Energy and Mineral Development, will inaugurate and hand over instruments of power to the new Board on July 19, 2024, at Amber House, Kampala. The new Board takes over when the industry is experiencing a ramp-up in activities during the development phase and will be expected to steer the Regulatory Authority in its mandate of monitoring and regulating the oil and gas sector to create lasting value for Uganda.

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