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AfDB loans $252M for Uganda’s infrastructure.

AfDB loans $252M for Uganda’s infrastructure.

In a bid to enhance its infrastructural capabilities, Uganda has secured a substantial loan of $252.83 million from the African Development Bank Group. The funds will be allocated to the construction of the Laropi-Moyo-Afoji and Katuna-Muko-Kamuganguzi roads, aimed at improving rural transport connectivity and fostering regional integration.

The financial package comprises two components: a $179.68 million loan from the African Development Bank and a $73.15 million concessional loan from the African Development Fund.

Augustine Ngafuan, the African Development Bank’s Country Manager in Uganda, emphasized the strategic significance of the Katuna-Muko-Kamuganguzi road project, spanning 66km, which aims to facilitate trade and create an alternative transport corridor linking Uganda with South Sudan. Ngafuan highlighted that the infrastructure development would contribute to income growth, regional integration, and overall trade efficiency.

Despite concerns over Uganda’s escalating public debt, which currently stands at Shs 80.7 trillion, officials assert that heavy borrowing remains imperative for advancing critical infrastructure projects. The budget committee report for the financial year 2023/24 reveals that external debt accounts for Shs 47.7 trillion, while domestic debt amounts to Shs 30 trillion.

Aside from the primary road projects, the funding will also support various social initiatives, including the construction of roads in small towns, non-motorized traffic facilities, street lighting, and a regional bus terminus in Moyo. Market stalls with cold storage facilities in Kashasha/Katuna, Moyo, and Laropi are also part of the project, aimed at boosting earnings for women traders dealing in perishable products such as fish and vegetables.

Flood protection works in Laropi will strengthen resilience to climate change, reducing disruptions to commercial activities. Additionally, a one-stop border post in Afoji/Jale on the Uganda-South Sudan border will be constructed to enhance trade and transport activities, harmonize customs operations, and facilitate cross-border supply chains.

The Laropi-Moyo-Afoji road, situated in northwestern Uganda’s Moyo district with a population of approximately 140,000, is expected to provide crucial access to over 500,000 refugees from the Democratic Republic of Congo and South Sudan currently residing in the Western Nile sub-region. Moreover, the road will support agricultural communities in Kabale and Rubanda districts, benefiting around 460,000 inhabitants.

As of November 2023, the African Development Bank Group has an active portfolio in Uganda comprising 23 projects with a total commitment of $1,957 million.

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