Africa-Press – Uganda. Parliament has given Government clearance to borrow 65.6 million special drawing rights valued at approximately US $90 million that will finance the Uganda Secondary School Education Expansion Project (USSEEP).
The project development objective is to enhance access to lower secondary education by focusing on underserved populations in targeted areas, who include communities hosting refugees, girls and people with limited access to public lower secondary schools.
The loan that will be provided by the International Development Association of the World Bank Group has been approved by the House owing to the fact that it is consistent with the external debt principle that requires borrowing for social sectors to be on concessional terms.
While presenting a report of the Committee on National Economy on Wednesday, the committee chairperson, Mr Ikojo John Bosco (Bukedea County MP) told the House that the loan is concessional in nature with a significant grant element.
He explained that the loan is consistent with the medium term debt strategy for the Financial Year 2020/21 that prioritizes external financing over domestic financing with preference to concessional borrowing.
“This project is economically viable given the merits that will accrue from enhanced access to lower secondary education…as well as the improvement in the education system,” Mr Ikojo said.
Speaking about the loan request, Mr Mathias Mpuuga, the Leader of Opposition, said Uganda ranks lowest in the Sub-Saharan when it comes to financing education, with a GDP percentage of 2.4.
He urged legislators to put those facts into consideration while approving loan requests to uplift the education sector, so as to keep alive to the obligations and attendant future challenges that may come up.
“In the third year of the project, the government is supposed to offer counter-funding the equivalent of Shs75 billion. The Minister of Education and that of Finance should confirm to Parliament that this money will be tabled in the budget framework paper later this month so that we have a yearly report on it until its financing,” Mr Mpuuga said.
Kiboga East County MP, Mr Keefa Kiwanuka, said his major concern is on the government’s preparedness to implement the project because the loan has a commitment fee where money set aside, if not used, raises the commitment fee. He sought government assurance to Parliament that they are prepared to start the project.
Finance Minister, Mr Matia Kasaija, informed Parliament that of the $90 million loan, there is a grant of $60 million. He said that if the loan was not taken up, then it would be withdrawn along with the grant.
In the Committee’s report, it was observed that in the recent past, the tax-to-GDP stagnated at 12 per cent while that public debt increased to 35.6 per cent.
The committee recommended that government revises tax exemptions and tax holidays as well as other means of enhancing domestic revenue mobilization.
The committee also recommended that government continues reviewing operations with a view of eliminating wasteful or inefficient expenditure, so as to reduce spending pressures.
In addition, the committee observed that most of the designs for school projects are implemented without the involvement of Local Governments during the planning level, which caused designs to be defective.
The committee report follows a directive by the Speaker of Parliament on September 01, 2021, to study the loan request and report back to the House on its viability.
The loan is expected to fill the gap of 116 schools and absorb the growing number of school going children in Uganda, thus achieving the national goal of universal secondary education by 2025.
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