Parliament has approved a government request to borrow \u20ac500 million, comprising \u20ac270 million from Afreximbank and \u20ac230 million from Ecobank Uganda and the Development Bank of Southern Africa (DBSA) to finance the 2024\/2025 national budget. But the decision has sharply divided lawmakers, igniting a heated debate over rising debt, transparency, and legal compliance.<\/p>\n\n\n\n
The vote comes as Uganda\u2019s public debt hits US$25.55 billion, prompting concern from Members of Parliament (MPs) who say the country is borrowing recklessly without ensuring that funds are efficiently absorbed or allocated.<\/p>\n\n\n\n
\u201cWe have a number of pending invoices. The contractor is on the road. “He has to be paid,\u201d said Finance Minister Matia Kasaija, tabling the motion. \u201cIf we do not pass these loans, we are going to default.\u201d<\/p>\n\n\n\n
Opposition MPs challenged the loan\u2019s legality, timing, and purpose. Hon. Muhammad Muwanga Kivumbi (NUP, Butambala County) described the process as \u201cunconstitutional\u201d and accused the government of using \u201cpost-mortem approval\u201d tactics.<\/p>\n\n\n\n
\u201cThe President clearly stated that borrowing should only be for security, infrastructure, and human capital, not recurrent expenditure. “So is the minister serious when he says this loan is to pay wages?\u201d Kivumbi asked.<\/p>\n\n\n\n
He also decried poor fiscal discipline, pointing out that UGX 16 trillion in borrowed funds remains undisbursed, yet taxpayers are already servicing interest on idle loans.<\/p>\n\n\n\n
\u201cOne reason the Auditor General keeps highlighting is Parliament\u2019s failure to attach proper conditions to these loans,\u201d he added.<\/p>\n\n\n\n
Hon. Theodore Ssekikubo (NRM, Lwemiyaga County) demanded clarity on what he called hidden loan conditions, including management, agency, and commitment fees.<\/p>\n\n\n\n
\u201cThere\u2019s a middle entity called the agent who is going to get free money. He arranges the loan and takes a cut. “Can we unpack this?\u201d Ssekikubo asked. \u201cWe\u2019re not saying don\u2019t borrow, but don\u2019t ambush Parliament at the last minute.\u201d<\/p>\n\n\n\n
Hon. Karim Masaba (Indep., Mbale City Industrial Division) raised legal concerns under the Public Finance Management Act, insisting that Parliament was violating procedure by approving the loan after passing the annual budget.<\/p>\n\n\n\n
\u201cWe are breaking the law by passing it now,\u201d Masaba warned.<\/p>\n\n\n\n
In response, government leaders defended the urgency of the loan, blaming protracted negotiations with lenders for the delay.<\/p>\n\n\n\n
\u201cSome of this money is intended for Supplementary Schedule No. 3, which was already approved by Parliament,\u201d said Government Chief Whip Denis Hamson Obua.<\/p>\n\n\n\n
Hon. Eddie Kwizera (NRM, Bukimbiri County) questioned the Finance Ministry\u2019s planning capabilities.<\/p>\n\n\n\n
\u201cDo they even plan? If they did, they should have given Parliament adequate time,\u201d Kwizera said.<\/p>\n\n\n\n
Speaker Anita Among acknowledged MPs\u2019 frustrations but sided with the urgency of securing funds.<\/p>\n\n\n\n
\u201cThere is no money. So can we agree that, since we do not have money, nobody should be paid a salary? “Should we stop building roads?\u201d she asked rhetorically, urging MPs to approve the loans for continuity of government functions.<\/p>\n\n\n\n
According to the motion:<\/p>\n\n\n\n
\u2022 The Afreximbank loan carries an effective interest rate of 7.33%<\/p>\n\n\n\n
\u2022 The Ecobank loan is at 7.28%<\/p>\n\n\n\n
\u2022 The DBSA loan is at 7.18%<\/p>\n\n\n\n
Although the rates are relatively moderate, MPs raised concerns about long-term repayment obligations, loan servicing costs, and diminishing fiscal space for future budgets.<\/p>\n\n\n\n
While the loan was ultimately approved, the debate exposed growing tensions over Uganda\u2019s rising debt load, lack of fiscal discipline, and executive overreach in public borrowing. <\/p>\n\n\n\n
Opposition MPs argue the government is rushing Parliament into approving loans without proper scrutiny, while the executive insists the funding is essential to avoid payment defaults and keep development projects on track.<\/p>\n\n\n\n
As Uganda\u2019s debt climbs, the pressure mounts on Parliament to demand greater accountability, timely planning, and transparent loan terms, before it\u2019s too late.<\/p>\n","protected":false},"excerpt":{"rendered":"
Parliament has approved a government request to borrow \u20ac500 million, comprising \u20ac270 million from Afreximbank and \u20ac230 million from Ecobank Uganda and the Development Bank of Southern Africa (DBSA) to finance the 2024\/2025 national budget. But the decision has sharply divided lawmakers, igniting a heated debate over rising debt, transparency, and legal compliance. The vote […]<\/p>\n","protected":false},"author":1,"featured_media":4303,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[31],"tags":[],"class_list":["post-4302","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government"],"yoast_head":"\n