The State Minister for Finance in charge of general duties, Henry Musasizi has revealed that the government intends to reassess the existing budget for the fiscal year 2023/24, just one month after the start of the financial year.
Musasizi informed members of the finance committee of parliament that this step is a rigorous effort aimed at protecting the economy from the repercussions of the suspension of new financial assistance from the World Bank.
“We took a firm decision, and we agreed that we would face the consequences. We shall be coming [to you MPs] soon. I want to prepare your minds that very soon we are going to revise the budget downwards, and we shall be coming to you for support. Even the emoluments are going to be affected given the preliminary results we are seeing. We shall be coming in one week or so to tell you the consequences and ask for your approval on how we shall move forward with the current challenges,” Musasizi said.
The government’s plan to revise the budget downwards comes just days after the World Bank announced that it was suspending any new funding of projects in Uganda, and reviewing the ongoing projects over Uganda’s passage of the anti homosexuality law.
“Immediately after the law was enacted, the World Bank deployed a team to Uganda to review our portfolio in the context of the new legislation. That review determined additional measures are necessary to ensure projects are implemented in alignment with our environmental and social standards. Our goal is to protect sexual and gender minorities from discrimination and exclusion in the projects we finance. These measures are currently under discussion with the authorities. No new public financing to Uganda will be presented to our Board of Executive Directors until the efficacy of the additional measures has been tested,” the World Bank statement reads in part.
The Bank’s decision will negatively affect projects valued at over 6.7 trillion shillings.
Projects within the Bank’s sh6.7 trillion portfolio in the country will continue moving forward only if they are determined to be both inclusive and free from discrimination.
Some of the affected projects that will be subjected to review for non discrimination include; ones aimed at improving urban infrastructure, like the $566 million program known as the Greater Kampala Metropolitan Area Urban Development Programme. This program is dedicated to enhancing roads and drainage systems in the densely populated urban area surrounding the city.
President Museveni responded defiantly to the World Bank’s move.
“Last night, an official from the World Bank rang me to alert me about the statement from that Bank regarding the suspension of any new requests from Uganda for loans. I want to inform everybody, starting with Ugandans, that Uganda will develop with or without loans,” he said in a statement,” he said.
“It is therefore, unfortunate that the World Bank and other actors dare to want to coerce us into abandoning our faith, culture, principles and sovereignty, using money. They really under-estimate all Africans. We do not need pressure from anybody to know how to solve problems in our society. They are our problems. We are continuing to talk to with the World Bank so that both they and we avoid this diversion if possible,” he added.
DEPRECIATION OF UGANDA SHILLING
Uganda’s currency, the shilling, is on track to experience its largest decrease in value in almost eight years over the revision of the budget.
The shilling’s value dropped by 1.76% against the US dollar, reaching a rate of 3,729.35 per dollar on Thursday.
This decline is the most significant one-day drop since December 2015, and it marks the fifth consecutive day of losses for the currency.