Uganda to borrow $320mn for infrastructure development

The money will be used to fund a number of infrastructure projects

The money will be used to fund a number of infrastructure projects

KAMPALA – The Ugandan government on Thursday announced plans to borrow $320 million from the World Bank's International Development Association to fund a number of infrastructure projects.

"Some $145 million will be invested in the rolling out of development infrastructure and social services in the Albertine region," Rose Namayanja, minister for information and national guidance, told reporters.

Namayanja said significant oil exploration activities in the Albertine region had led to a surge in population.

"The influx of people from other regions seeking profits, jobs and market opportunities related to the oil industry is projected to increase further," she added.

She underlined the need for urbanization, infrastructure upgrades and social progress in the region.

"This will greatly contribute to rapid economic growth and poverty reduction in the Albertine region in particular," Namayanja said.

Uganda's official statistics bureau puts the region's total population at nearly 2.85 million.

According to a working paper by the Albertine Region Sustainable Development Project, 12 percent of the local population lives in poverty.

-Kampala Roads-

Minister Namayanja said the other $175-million loan would go towards implementing the Second Kampala Institutional and Infrastructure Development Project.

The loan is intended to improve service delivery in capital Kampala with a focus on upgrading and expanding the road network.

"The Kampala City Authority will upgrade road designs with better pedestrian walkways and street lighting," she said.

The minister added that the number of automated signal intersections and elevated crossing facilities would be increased in the city with a view to reducing pedestrian fatalities.

"Faster connectivity and mobility in the city will also reduce costs related to chronic traffic jams and vehicle repairs due to breakages caused by pot-holes," she said.

Implementation of the Second Kampala Institutional and Infrastructure Development project comes at a time when the capital is grappling with myriad infrastructure challenges.

For instance, of the city's 1200km road network, only about 360km, or 30 percent, is paved.

The Greater Kampala Metropolitan Area is estimated to contain around 3.15 million people, while Kampala City is thought to hold some 1.53 million.

"The cabinet is hopeful that parliament will support borrowing of the said funds to enable commencement of the infrastructure development," Namayanja told Anadolu Agency.

Uganda's 2013/14 budget framework paper indicates that, for the period ending June 2012, Uganda's external debt exposure rose to $5.85 billion – up from $5.03 billion for the period ending June 2011.

Concessional loans from the World Bank's International Development Association, the African Development Bank and the Africa Development Fund account for over 90 percent of the country's multilateral debt.

Uganda's total domestic debt, meanwhile, stood at $2.54 million – or 11.5 percent of GDP – as of the end of June 2012.

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