October 24, 2017

Uganda to borrow $14m for border upgrades

March 16—The government has been given a parliamentary go-ahead to borrow $14 million from the International Development Association (IDA) for implementing the Great Lakes Trade Facilitation Project. The IDA is the concessional arm of the World Bank Group providing loans at minimum interest.

This project financing, which was tabled by the government in August last year, is meant to improve coordination of trade and improve the capacity of Uganda in providing cross border services.

D avid Bahati, the State Minister of Finance for Planning, said the money is meant to be invested in the development of infrastructure as well as support the development of Bunagana and Bukole border posts in western Uganda.

Bahati said the government intends to invest in these border posts as a way to increase their capacity to boost cross-border trade, increase economic opportunities in the area and beyond, and improve border security and policy procedure.

He said the government is required to provide counter-funding of up to $3million. Some $12 million of the borrowed funds will go to build and develop infrastructure while about $3 million is to be allocated for monitoring and evaluation and other costs.

However the Chairperson of the Committee on National Economy, and a former finance minister, Syda Bbumba said despite the creation of One Stop Border Posts (OSBPs) at Uganda’s main crossing points, there are still delays at border areas impeding trade especially on the Ugandan side.

She said this project is intended to address such challenges that have continued to exist.

“SMSs operating in the border areas in Uganda have been constrained. Many businesses in the border areas have been limited by inadequate border services, goods are still being verified manually, causing delays and raising costs of doing business,” Bbumba said.

She said the project will improve trade with countries in the COMESA block and that by the end of the project, it will lead to increase in inter regional trade by 30% or 40% as well as improve product marketing by establishing border export zones.

However, legislators opposed the idea of spending more than $2.7 million on monitoring and evaluation and recurrent costs. The consensus was that instead the money be used to build other border posts which the government accepted and the loan was later approved.

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