The State Minister for Finance, Hon. Henry Musasizi, has said government is engaging the World Bank on its decision to cut financing of projects in Uganda.
“We are negotiating with the World Bank but should we fail to agree, then we shall make some decisions on the budget which we shall bring to the attention of Parliament for approval,” said Musasizi.
He revealed this to the Committee on Finance, Planning and Economic Development during a meeting held on Thursday.
This followed a question by Committee Chairperson, Hon. Amos Kankunda on government’s plans to absorb shocks that will be occasioned by the decision of the World Bank.
On Wednesday, 09 August 2023, the World Bank issued a statement declaring the funding cuts following the recent passing of the Anti-Homosexuality Act, 2023.
The World Bank indicated that a team was deployed to Uganda to review additional measures necessary to ensure projects are implemented in line with World Bank environmental and social standards.
“No new public financing to Uganda will be presented to our Board of Executive Directors until the efficacy of the additional measures has been tested,” reads the World Bank statement in part.
Musasizi noted that a number of projects planned for Financial Year 2023/2024 including in the Greater Kampala Metropolitan areawill be affected.
He added that the move by the World Bank will have dire consequences on the operations of government.
“We are still gathering ideas about what to do in line with adjusting the budget but this will require your approval,” Musasiszi said.
In another development, MPs expressed concerns over the country’s domestic debt and failure by government to pay the private sector timely.
The Deputy Chairperson of the Committee, Hon. Jane Pacuto noted that domestic arrears are not to a tune of over shs7 trillion.
“This is a big slap on the faces of the players in this sector. We are being threatened by big partners like World Bank that are not going to give us money, and we have been threatened by our own budgets being cut,” Pacuto said.
She added that timely payment of the private sector will aid in spurring the growth of the economy and expand the tax base.
Hon.Muwanga Kivumbi (NUP, Butambala County) tasked the Finance Ministry to present current copies of outstanding reimbursements to Bank of Uganda.
He added the ministry should present primary debt obligations for domestic suppliers for all Ministries, Departments and Agencies.
“If you are holding on to something like shs8 trillion for services provided to government, you are stifling growth of the economy. We need this data so that we can move it to a logical conclusion,” Muwanga Kivumbi said.
Hon. Karim Masaba (Indep., Industrial Division, Mbale City) tasked the ministry to also furnish the committee with figures on money collected by Uganda Revenue Authority.
Musasizi attributed the domestic debt burden to delayed disbursements.
“We are not failing to pay the private sector by choice but it is because the money is limited,” said Musasizi.
He added that the figures on government’s domestic debt obligations will only be presented after an audit has been completed in December this year.