Uganda News

Mpuuga wonders why the IMF authorized Uganda’s borrowing facility without asking parliamentary permission.

The purpose of the conference, which was hosted by the Parliamentary Forum on the IMF and the World Bank, was to inform the opposition leadership about government policies backed by the two lending agencies.

Mathias Mpuuga, the opposition leader, questioned why the International Monetary Fund authorized a loan facility for Uganda without consulting Parliament.

He asked the question during a meeting with Izabela Karpowicz, the IMF’s country representative in Poland, and Amine Mati, the donor agency’s chief of mission.

The purpose of the conference, which was hosted by the Parliamentary Forum on the IMF and the World Bank, was to inform the opposition leadership about government policies backed by the two lending agencies.

Mati, who spoke to the audience via skype from Washington DC, said that the IMF executive board granted a $ 1 billion loan facility for Uganda in June under the Extended Credit Facility (ECF) structure to help the post-Covid-19 recovery efforts.

Uganda was chosen for the three-year finance plan after it was discovered that its economy had been severely impacted by the Covid-19 outbreak, according to Mati.

Mpuuga told the IMF delegation that questions regarding the loan have stayed in the public realm because the administration has remained tight-lipped about the loan’s purpose, and he questioned the IMF’s acceptance of the loan without first seeking parliamentary permission.

“We are astonished that the IMF did not consider requesting parliamentary permission for the loan,” Mpuuga said, adding that “some of these requirements that are subject to the laws of the land should be observed since oversight begins with regard to the laid out procedure.”

Mati, on the other hand, claimed that because the IMF works directly with the government and the central bank, the donors assumed that the laws had been followed by the time the loan was asked for.

Following the Auditor General’s report indicating that many loans have not been utilized, Budadiri West MP Nathan Nandala Mafabi, who is also a board member of the Parliamentary Forum on the IMF and the World Bank, tasked the IMF team to explain whether they took Uganda’s absorption capacity into account.

The Auditor General stated in March that 12 loans totaling Shs 1.3 trillion had expired before being disbursed to various ministries and government bodies, jeopardizing the achievement of targeted development goals.

Other MPs, including Ibrahim Ssemujju Nganda for MP Kira Municipality, Betty Nambooze for MP Mukono Municipality, and Abed Bwanika for MP Kimanya – Kabonera, questioned how the IMF arrived at the loan amount and whether it was concerned about Uganda’s huge public debt.

Although Uganda’s public debt is significant, Karpowicz told the gathering that it does not raise concern because its GDP is higher than that of many other countries.

“This is why domestic revenue is such an important part of the [ECF] program,” she explained.

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