Uganda’s Parliament has approved a government request to borrow $190 million from Stanbic Bank to settle outstanding electricity arrears owed to Umeme Limited, the country’s main electricity distributor. The decision, made during a heated session today, comes just days before the March 31 deadline for settling the debt. However, the approval was not without controversy, as some Members of Parliament (MPs) raised concerns about the loan’s terms and the broader implications for the economy.
Background of the Loan Request
The government’s request to borrow the funds was based on a report by the Committee on Finance, Planning, and Economic Development, chaired by John Bosco Ikojo. The committee had initially scrutinized the loan proposal and recommended its approval after verifying the amount needed to clear the arrears. According to the Electricity Regulatory Authority (ERA), Umeme’s outstanding arrears stand at $127 million, but Parliament approved a higher amount of $190 million to avoid penalties and ensure timely payment.
Concerns Raised by MPs
Despite the approval, several MPs expressed reservations about the loan. Charles Tebandeke and Dennis Oguzu were among those who opposed the move, arguing that the government should explore alternative solutions to settle the debt without accumulating more loans. They also questioned the transparency of the agreement between the government and Umeme.
Abdu Katuntu and Faith Nakut further highlighted the risks of rushing to approve the loan without proper scrutiny. They warned that such decisions could lead to financial mismanagement and increased public debt.
Government’s Justification
Henry Musasizi, the State Minister for Finance, defended the loan request, stating that the funds would only be disbursed after thorough verification of the arrears. He assured Parliament that the government was committed to prudent financial management and would ensure the loan is used for its intended purpose.
Approval of South Sudan Peacekeeping Mission
In a separate but equally significant decision, Parliament also approved a request by the Minister of Defense, Jacob Oboth Oboth, to deploy Uganda People’s Defence Forces (UPDF) troops to South Sudan for peacekeeping operations. The deployment follows a request from South Sudanese President Salva Kiir to Ugandan President Yoweri Museveni for assistance in stabilizing the region.
Gilbert Olanya, an MP who supported the motion, emphasized the importance of maintaining peace along the Uganda-South Sudan border. He noted that instability in South Sudan often spills over into Uganda, affecting trade and security.
Speaker’s Caution
Anita Among , the Speaker of Parliament, urged caution in handling the South Sudan deployment, emphasizing the need to protect Uganda’s interests while fostering regional stability. She also called for transparency in the loan approval process, warning against rushed decisions that could have long-term consequences.
Conclusion
The approval of the $190 million loan to settle electricity arrears and the decision to deploy UPDF troops to South Sudan reflect Parliament’s role in addressing both domestic and regional challenges. While the decisions were made with the aim of resolving urgent issues, the debates highlighted the need for greater transparency and accountability in government operations.
As Uganda continues to navigate its economic and security challenges, the focus remains on ensuring that such decisions benefit the country in the long term without exacerbating existing problems.
