Kampala, Uganda | THE INDEPENDENT | The government is rejecting loans from the World Bank in favour of those from China.
This is according to the National Economy Committee of Parliament.
According to Syda Bbumba, the committee chairperson, while meeting officials from the World Bank recently they said that they had offered the government some loans but were rejected.
The committee was meeting officials from the Ministry of State for Minerals and Ministry of Finance led by Peter Lokeris and David Bahati over a proposal to borrow 2.4 trillion shillings from Stanbic Bank and Trade Development Bank to finance budget deficits just a few months into the 2019/2020 financial year.
According to Bbumba, World Bank says they provided the loan, but government was not willing to take it.
Keefa Kiwanuka, the Kiboga East MP asked why government is rushing to get a loan to support the budget, instead of looking at how to cut the costs following the budget deficit.
Kiwanuka urged Government not to heavily rely on China loans.
Bahati says the west has been pushing them to stop working with China, and yet China loans are good unlike loans from World Bank whose duration is long.
The committee also questioned why World Bank had reportedly backtracked on the offer to provide budget support of about 100 million dollars.
Although China loans come easily, they have a short term repayment period and also high interest. However, loans from the World Bank take a long duration to acquire but also have a longer repayment period and low-interest rates.