Uganda will get at least $1.9billion from the World Bank for the period between 2021 and 2023, Africa Tembelea has learnt.
The money is part of new funding round that the bank has put aside for developing countries under the International Development Assistance (IDA) round 19.
Antony Thompson, the World Bank Country Director for Uganda, said they would disburse $ 500m to $ 600m in the next financial year (starting July 1). This is an increment from the USD 1.4bn that Uganda received in the three years to 2020.
According to Thompson, this money is a loan that can be refunded. However, it falls under the concessional funding part where the money is cheap and has better terms and longer period for repayment compared to the non-concessional loans that are generally expensive.
Non-concessional or expensive loans usually come from bilateral lenders like China. Uganda’s borrowing is currently bending heavily on expensive loans (non-concessional) raising fears that payment might be a problem.
The increase in funding from the World Bank will be a boost for Uganda at the time when the country needs more resources to carry out key projects.
In general, between 2021 and 2023, the World Bank will give $82 billion for the IDA assistance to the poorest countries.
Africa Tembelea understands that the money will be spent on road and energy projects, and on the health, education, agriculture and water sectors.
While Uganda plans to cut its budget by about 2% to 39.5 trillion shillings ($10.8 billion) in 2020-21, its fiscal deficit may climb to 10.4 trillion shillings from 8.8 trillion shillings in 2019-20, according to the Finance Ministry.
Uganda’s public debt was $12.6 billion in June, with multilateral lenders — chiefly the World Bank’s International Development Association — accounting for 65%, according to the ministry.
The East African nation may see output slowing to 6% in 2019-20 from an earlier projection of 6.3% following delays in the start of oil production, according to the International Monetary Fund.