Parliament has authorized government to borrow USD 99.56 million (approximately UGX 352.9 billion) from the International Fund for Agricultural Development (IFAD) to finance the Resilient Livestock Value Chain Project (RELIV).
The approval followed the adoption of a report by the Committee on National Economy, which had earlier scrutinized the loan request.
While presenting the committee’s findings during Tuesday’s plenary sitting chaired by Speaker Anita Among, Committee Chairperson John Bosco Ikojo warned that the new loan could push Uganda closer to debt distress.
“The approval of this loan will increase the external debt exposure for public and publicly guaranteed debt by USD 99.56 million and the share of GDP by 0.16 percent. Even though public debt will remain within sustainable levels, Uganda is rated at moderate risk of debt distress. If Uganda experiences an adverse shock, leading to a decline in GDP growth, some of the debt risk indicators will exceed the CFR thresholds rendering our debt unsustainable,” Ikojo said.
The Resilient Livestock Value Chain Project (RELIV) is expected to support livestock farmers by improving productivity, strengthening market access, and enhancing resilience against climate change. Government has argued that the project will directly benefit thousands of households that depend on livestock for income and food security.
However, the debate in Parliament once again highlighted concerns over Uganda’s rising debt levels. Public debt currently stands at over UGX 96 trillion, and projections show it could grow further as government continues to borrow to fund infrastructure and social projects.
Speaker Anita Among acknowledged the debt concerns but emphasized the importance of ensuring borrowed money is properly monitored. This was after Butambala District and NUP shadow Minister, Hon Muwanga and expressed his concerns.
“Can I ask the clerk to immediately get the resolution and forward for us to meet the deadline. Hon. Kivumbi, for us we will borrow, your work is to ensure that you report back on what is happening and I hope you are going to report exactly what is happening in these projects,” the Speaker said.
The approval means government will now proceed to finalize arrangements with IFAD for the release of the funds. The success of the RELIV project, observers say, will depend on strict accountability and ensuring that resources are directed towards improving Uganda’s livestock sector rather than being lost to inefficiency.
