World Bank Funding Withdraw Affects Projects Worth Sh6.7T

by Christopher Kiiza
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The move by the World Bank to suspend any new funding of projects in Uganda, and review the ongoing projects over Uganda’s passage of the anti homosexuality law, 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.

Additional projects that are not immediately impacted but will now undergo assessment for non-discrimination encompass a $355 million endeavor aimed at enhancing the agricultural sector’s ability to withstand climate change, as well as a $217 million undertaking focused on fostering economic prospects for women entrepreneurs.

Other projects funded by the World Bank in Uganda, which would have a massive impact on people’s lives if their financing were suspended, include the $638 million Electricity Access Scale-up Project (EASP). This project aims to connect over 1.3 million households to the national power grid.”

Government hopes that the project will address the challenge of electricity connection backlog and accelerate the country’s ambitions to clean energy.

“We expect about 1,360,000 households to be connected on the grid and we also expect about 150,000 off grid connections, and the project will also benefit our plans towards clean cooking solutions through various financial intermediation measures. This project comes in to address the government program of Electricity Connections Policy to address connection backlog. We have a backlog, very many applications not connected. So, we pray for this project. Because whenever we face challenges, we say EASP is coming. We are hoping to solve this problem,” said the Minister of Energy and Mineral Development, Ruth Nankabirwa while speaking at the Installation Permit Conference for certified electricians in Kampala on Friday. 

The Electricity Access Scale-up Project (EASP) will be implemented with funding from the World Bank for over a period of five years, and would support the Government’s efforts to increase access to electricity for households, refugee and host communities, industrial parks, commercial enterprises and public institutions.

The EASP activities aim to build on earlier Government initiatives in the energy sector, to support the expansion and strengthening of the electricity distribution network, scale-up service connections within the network, and increase access to off-grid electricity in refugee settlements and their host communities (outside the existing electricity distribution network), and to scale up clean cooking services and technologies.

In the past, the World Bank has provided extensive assistance to Uganda across various domains. This includes allocating $157 million towards environmental preservation, $218 million for enhancing digital capabilities, and over $400 million for fostering innovation in the financial sector. Additionally, the World Bank has invested more than $300 million in transportation, $400 million in water and sanitation, and upwards of $200 million in the field of education in Uganda.

The World Bank said in a statement on Tuesday that it was suspending funding to Uganda because “Uganda’s Anti-Homosexuality Act fundamentally contradicts the World Bank Group’s values.”

“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 statement reads in part.

Shortly after the World Bank released its statement, the Ministry of Health issued a statement instructing health workers not to deny care to individuals based on their gender or sexual orientation. Nonetheless, the ministry clarified that its statement was unrelated to the World Bank’s statement regarding anti-gay legislation.

MUSEVENI’S RESPONSE

President Museveni responded to World Bank’s statement, saying that Uganda will develop with or without loans.

“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.

“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.

ECONOMIST’S SAY

Senior economist, and lecturer at Makerere university, Dr Fred Muhumuza said that the World Bank’s decision ought to serve as a reminder to Uganda that even in the event of resolving matters with the World Bank, it’s crucial for the country to streamline its spending and manage its borrowing.

“This should be a wake-up call to Uganda that even if we work out things with the World Bank, we need to rationalize our expenditure and control our borrowing,” he said.

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