The Ministry of Energy has the largest share of funds borrowed by government, according to a parliamentary committee report.
The report, authored by the Parliamentary Committee on National Economy, analyses the state of Uganda’s indebtedness, grants and guarantees for the year ended 20l9.
The report indicates that the current stock of debt under the Ministry of Energy as of December 20l9 stood at $2.8b.
However, the report indicates that disbursement for the money already borrowed stood at about 45 per cent, which is “below the required 50 per cent rate.
The report also indicates that some of the loans acquired as far back as 2013 continue to have low disbursement levels.
For instance, disbursement rates for the Entebbe-Mutundwe and Masaka-Mbarara transmission line projects, stood at 0 per cent as of December 2019.
The loan for the Entebbe-Mutundwe project was committed in October 20l3 while the Masaka-Mbarara line loan was approved by Parliament on March 13, 2018 and signed on April 27, 2019.
The Kampala Metropolitan Transmission Systems Project approved on March 20, 2018 and signed on April 26, 2018, also had a disbursement rate of 0 per cent as of December 31, 2019.
Others, such as the construction of the 44.7 megawatt Muzizi Hydropower Project and associated transmission line, which was approved on January 8, 2016 had by December 31, 20l9 also not recorded any disbursement.
The committee report also noted that lengthy and protracted negotiations, land acquisition challenges and vandalism of transmission lines and other installations, continue to stall implementation of planned projects.
The report also lists the Ministry of Works as another sector that has a large stock of debt.
As of December 20l9 approved debt in Works amounted to $ 2.3b with at $39m already disbursed.
However, the disbursement rate, which stand at 37 per cent is still low compared to the required 50 per cent.
The water and environment sector under the Ministry of Water has a debt stock of $ 1.098b.
However, according to computed data, only $390.75m had by December 31, 2019 been disbursed, which represents an average disbursement rate of 35 per cent.
Agriculture, which is also among the most indebted ministries, has six approved projects amounting to $428.9m. However, only $120.2m which stands at an average of 28 per cent has been disbursed as of December 31, 2019.

Debt projected to grow
The International Monetary Fund recently said Uganda’s public debt will rise from 49 per cent in the 2020/21 financial year to 50.7 per cent in the 2021/22 financial year due to increased borrowing for infrastructure projects.
IMF indicated that public debt will grow to 45.7 per cent in the next financial year (2019/20), before growing to 50.7 per cent in the 2021/22 financial year.
Loan disbursement the over years

The committee report points out that there has been noticeable decline in disbursement levels.
In the 2016/17 financial year undisbursed credit declined from $ 5.15b to $ 4.79b in the 2017/18 financial year.
However, in the period to December 2019, the levels increase from $4.79b in the 20l7/18 financial year to $5.08b.
“This is not a desirable outcome as undisbursed resources continue to remain high, affecting timely completion of debt financed projects,” the report says, noting that “this further delays the timely realisation of programmed projects goals as well as attracting an increase in interest payments”.

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