By Badru Nsubuga Musician Weasel Manizo is up in arms with Chagga again. Weasel accuses his now former manager Chagga Geoffrey of working with his enemies to see him fail, though he didn’t say no names. “All friends turned enemies, God is watching you, and your fake love. You used to pretend to love me […]
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China will not take over Uganda's assets because of failure to pay back loans, Finance minister Matia Kasaija has said.
Kasaija says Ugandans shouldn't be at all worried because all the money owed to China shall be serviced thanks to the smart investment decisions being made by government officials. Uganda owes China $1.6bn (about Shs 6 trillion). Kasaija said Uganda's economy is growing at a faster pace, adding that unless there is a catastrophe, nothing will stop Uganda from servicing the Chinese loans.
The debt owed to China arose from infrastructure project financing for the Kampala-Entebbe expressway, Isimba hydro power project and the ongoing expansion of Entebbe international airport.
In his recently released report, the auditor general warned that Uganda was at risk of losing some of its national assets as some unfavourable conditions such as losing sovereignty over national assets had been attached to some loans.
In recent months, there were reports in international media that China wanted to take over Zambia's airport and national power distributor due to the country's failure to service its loans.
Last year, China took over Sri Lanka's port for 99 years due to loan default. Kasaija said takeover of national assets can happen anywhere else but not Uganda.
"China taking over assets? I don't know. I have heard but in Uganda I have told you as long as some of us are still in charge, unless there is some catastrophe which I don't really see at all that will make this economy going behind, I want to assure you the economy is now on [track]. And it is possible, am talking about China taking over assets, they can do it elsewhere but here I don't think they can." said Kasaija.
The minister said government is investing the loan money in critical sectors with quick returns that can in turn be used to pay back debts. These sectors, Kasaija further argued are buttressing Uganda's rising economic growth. The economy grew at 6.1% above the 5.8% projection last year financial.
"The issue really which you should be questioning, when you borrow, do you put the money in projects that will quickly expand the economy so that these benefit expand the economy and increase income," Kasaija argued.
"I have told you precisely that we are doing that only," he said.
Kasaija said Uganda prefers getting bi-lateral loans from China Exim Bank and Japan International Corporation Agency (JICA) because they offer preferential terms with grant element that range between 20% and above 35%.
At the end of June 2018, public debt amounted to $10.7 billion equivalent to Shs 41.3 trillion. This is 41.5 per cent of the country's GDP. External debt accounts for 67.2 per cent ($7.2 billion) and domestic debt Shs 32.8 ($3.5 billion).
The debt levels are below the international sustainability thresholds 50% debt to GDP and significantly below the sub-Saharan average (45.4% debt to GDP). But Uganda is further courting China for a $2.23 billion loan for the Standard Gauge Railway (SGR) project.
In the past months, Kasaija has been saying Uganda submitted all documents to Exim Bank of China and are waiting for a final call from Beijing to ink agreement for SGR loan. If Uganda is given this loan, it will hastily push Uganda's debt past the 50% threshold.
Uganda further plans to fund oil projects such as roads, pipeline and refinery construction through loans in the coming years. But Kasaija insisted that he will not allow debt ratio to surpass 50% of GDP.
"We're very cautious. If we find that we're getting near the threshold we'll hold back. We shall not hesitate to hold back. We shall hold back. We're not reckless, by the time we take these loans, it takes days and nights - writing to check this and that. So we're not going to lead your country into debt recklessness…we're there for you. Don't worry" he said.
Kasaija was responding to auditor general's report on Uganda's debt sustainability.
By Our Reporter American gospel singer and worship leader, Don Moen is coming to Kampala, it has been announced. Don Moen will headline the Kampala Praise Fest which is slated to take place on Friday, 8th February this year at Kololo Airstrip. This was revealed during a press briefing held at Mestil Hotel on Tuesday morning. Organised […]
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After a successful musical start to the year 2019 with Eddy Kenzo holding a full house concert at Serena, fellow singer and friend Ykee Benda seeks to hold his concert at the same venue. Ykee Benda has announced he will hold his concert on the 29th of March in what he has named SINGA concert. […]
The post Ykee Benda will also go to Serena for his concert appeared first on BigEye.UG.
The Executive Director of Uganda National Bureau of Standards (UNBS) Dr. Ben Manyindo has revealed that the body has embarked on issuing distinctive Mark to various products before they are allowed on the market. He said the move is in line with the use of Distinctive Mark Regulation that came into force on January 1, […]
The post UNBS to issue distinctive mark to products before going on the market appeared first on Eagle Online.
Uganda's public debt has increased by 22 per cent, rising from Shs 33.99 trillion as at June 30, 2017, to Shs 41.51 trillion as at June 30, 2018, according to the 2018 auditor general's report released today.
Handing over the report to the speaker of parliament Rebecca Kadaga, the auditor general John Muwanga said that payment for loans worth Shs 3.9 trillion which are 50 per cent of those he has studied, expires in 2020.
Muwanga said that if the government is to service the loans as projected in the next financial year 2019/2020, it would require more than 65 per cent of the total revenue collections which is over and above the sustainability levels of 40 per cent.
"Although Uganda's debt to GDP ratio of 41 per cent is still below the International Monetary Fund (IMF) risky threshold of 50 per cent and compares well with other East African countries, it is unfavorable when debt payment is compared to national revenue collected which is the highest in the region at 54 percent", reads the summary of the audit report.
He noted that the interest payments on domestic and external debt during the financial year 2017/2018 amounted to Shs 2.34 trillion, 17 per cent of the total revenue collections, which is above the limit set in Public Debt Management Framework, 2013 of 15 per cent.
"Although absorption of external debt has improved compared to last financial year, I noted some loans with absorption levels as low as 10 per cent and below. An example is the USMID project with over Shs 95 billion (95 per cent) still on the various accounts of Municipal Councils by close of the year, despite various incomplete and abandoned works due to non-payment to contractors," further reads the summary report.
Another project cited by the auditor general is the Mbarara-Nkenda and Tororo-Lira transmission line, which, he said has delayed for almost 8 years - resulting into the cancellation of the loan by the funder with a disbursed loan amount of $6.5 million.
Muwanga also noted that significant value loans have stringent conditions which could have adverse effects on Uganda's ability to sustain its debt.
He says that conditions include a waiver of sovereign immunity by the government over all its properties and itself from enforcement of any form of judgment, adoption of foreign laws in any proceedings to enforce agreements, requiring the government to pay all legal fees and insurance premiums on behalf of the creditor.
Keto Nyapendi Kayemba, the deputy auditor general said that their office carried out a special audit on public debt management saying that it is worrying. She said that the government needs to pay more attention to the the country's indebtedness.
"The revenue to GDP is actually standing at 55% which is the highest in the region. We did a special audit on public debt and we expect you to look at it in detail and see the issues that we're raising. We have concerns about the sustainability of debt, it is currently still sustainable, but if we go at the rate at which we're going, we need to be careful. And there issues there that really need addressing. We're taking in more commercial loans, we're taking in more loans whose conditionalities are probably not very conducive for us as a development country." she said.
A lot of losses were made after Uganda Police decided to out of the blue stop Bobi Wine's 2018 Boxing Day concert that takes place at his owned One Love Beach, Busaabala annually. At least we all saw or heard about what happened in Busaabala and more is set to happen if Bobi and Police […]
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As the year 2018 comes to a close we can't help but notice the tale tell signs that keep reminding us of this year near summation. We take a look back at this year's biggest and most memorable events and which lessons we should carry with us into the New Year and what it means […]
The post How boat cruise, age-limit ruling and social media\mobile money tax ruled 2018 appeared first on Eagle Online.
