By Sylvia Katushabe & Jane Nafula
Both the Najjanankumbi and the Katonga Forum for Democratic Change (FDC) factions yesterday condemned the government’s decision to borrow from local commercial banks to fund supplementary budgets that were passed by Parliament last week.
Addressing journalists during the weekly press briefing yesterday at party headquarters in Najjanankumbi, Kampala, Ms Margaret Wokuri Madanda, the deputy president for eastern region, said if the government borrows from local banks, the business community may not be in a position to access funds from the same banks.
“Banks will prefer dealing with the government than the business people. The business community will either fail to find money and run out of business, [and therefore] worsening the unemployment problem in the country,” Ms Madanda said.
At a press conference at their offices on Katonga Road in Kampala, Mr Harold Kaija, the secretary general of the FDC Katonga faction, said borrowing from local banks is likely to affect the economy.
“The money which is going to finance the supplementary budget is not in our Treasury. It is going to be borrowed locally. When it is borrowed locally, it means those are going to be commercial loans whose conditions are that you pay in a shorter period and with high interest rates yet we already have a very bad debt to pay back,”he said.
Last week, Parliament approved three loans amounting to more than Shs5.2 trillion, including Shs3.5 trillion from local commercial banks to fund the supplementary budget, Shs1.227 trillion from World Bank for smart agriculture and Shs554.689 billion from China to finance the e-government infrastructure project phase.
Mr Kaija said accountability of the money must be availed to ensure that it is spent on the intended purposes. However, Ms Madanda wondered if the government had exhausted all the sources of borrowing to the point that it is going to local banks to compete with the local businesses.
