Parliament Approves Loans for Key Infrastructure Projects

By Phillipa Among On Jan 9, 2025 19

File Photo: Speaker of Parliament Anita Among chairing a parliamentary session that passed the National Coffee Amendment Bill 2024.

Parliament has approved two government loan requests amounting to US$15.22 million and US$73.15 million from the African Development Bank Group for the construction of the Laropi-Moyo-Afoji Road and the Katuna-Muko-Kamuganguzi Road, respectively.

The approval, made during a plenary session chaired by Speaker Anita Among on Thursday, January 9, 2025, followed a motion presented by the Minister of State for Finance, Planning, and Economic Development (General Duties), Hon. Henry Musasizi. The motion stemmed from a government proposal submitted in September 2024 and later scrutinized by the Committee on National Economy.

Musasizi highlighted that the loans aim to construct all-weather roads to boost tourism in southwestern Uganda, improve access to mines, and enhance regional connectivity through a permanent bridge at Laropi and a one-stop Uganda-South Sudan border post.
“The project scope includes road and bridge civil works, project implementation support, institutional support, and compensation for project-affected persons,” Musasizi said, emphasizing that the scope remained unchanged from its initial approval in 2020.

The Chairperson of the Committee on National Economy, Hon. John Bosco Ikojo, described the loans as strategically beneficial, given their national significance spanning three regions. He further explained that the US$73 million facility from the African Development Fund is interest-free, repayable over 50 years, and includes a 10-year grace period with a minimal 0.1 percent annual service charge.

In addition, Parliament approved a separate government request to borrow Shs171.63 billion from Agence Française de Développement (AFD) for the Lake Victoria Water and Sanitation Project. This funding will expand the distribution network, enhance the New Katosi Water System, and improve access to clean water in the Greater Kampala Metropolitan Area.

The combined approvals increase Uganda’s external debt exposure by US$252.83 million, raising the public debt-to-GDP ratio by 0.13 percent. However, Musasizi reassured Parliament that the debt remains within manageable limits under the Charter of Fiscal Responsibility.

These projects are expected to enhance infrastructure development, boost economic activity, and improve living standards across Uganda.