The Leader of the opposition in Parliament, Hon Mathias Mpuuga has held discussions with the country representative of the International Monetary Fund (IMF), Izabela Karpowicz, and the donor agency’s chief of mission, Amine Mati.
The meeting, held under the auspices of the Parliamentary Forum on the IMF and the World Bank was intended to brief the Opposition leadership on government programmes supported by the two lending institutions.
Addressing the meeting via zoom from Washington DC, Mati took time to explain the US$1 billion loan facility for Uganda which was approved by the IMF executive board in June under the Extended Credit Facility (ECF) arrangement to support the post-COVID-19 recovery and the authorities’ plan to increase households’ incomes and inclusive growth by fostering private sector development.
Mati said that Uganda was picked for the three-year financing package upon realisation that its economy had been hit hard by the COVID-19 crisis which reversed decade-long gains in poverty reduction, a deterioration of the fiscal balances plus causing pressures on external buffers.
Mpuuga told the IMF team that questions about the loan have remained in the public domain since the government remained cagey on the intent of the loan, and also questioned the manner of how the IMF approved the loan without first seeking Parliamentary approval.
“We are surprised that seeking Parliamentary approval for the loan wasn’t critical for the IMF,” Mpuuga said adding that, ‘some of these conditions that are subject to the laws of the land should be respected because oversight begins with respect of the laid down procedure’.
Mati however, said that since the IMF deals directly with the Government and the Central Bank, the donors took it that there was conformity with the laws by the time applied for the loan.
Budadiri West MP, Hon 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 into consideration Uganda’s absorption capacity following the Auditor General’s report that indicated that many loans have not been utilised.
In March this year, the Auditor General reported that 12 loans valued at shs1.3 trillion expired before disbursement to respective ministries and government entities which undermines the attainment of planned development targets and render commitment charges paid in respect of the undisbursed funds meaningless.
Other MPs notably, Hon Ibrahim Ssemujju Nganda (FDC Kira Municipality), Betty Nambooze (NUP, Mukono Municipality) and Abed Bwanika (NUP, Kimanya – Kabonera) raised questions on how the IMF came up with the figure for the loan and as to whether it cared about Uganda’s high public debt.
Karpowicz told the meeting that while Uganda’s public debt is high, it does not cause so much concern since its GDP is better than that of many other countries.
“This is why domestic revenue is a key component of the programme [ECF],” she said.
The meeting agreed to further engage the legislators to have a better understanding of how the loan facility was structured and to identify the major gaps in it.