USMID project in balance as Uganda rushes to China’s Exim to borrow $150M after World Bank halts funding

The continuation of the World Bank funded Uganda Support to Municipal Infrastructure Development (USMID) project that has transformed Uganda’s cities and municipalities remains in balance after loans were suspended when the country passed the Anti Homosexual law .

The government of Uganda had lined-up a number of additional municipalities and urban centers that were set to benefit from this national project which helps local authorities to improve infrastructure by building new and expanding old roads, install street lights , construct parks , green spaces and improve garbage collection among other utilities .

After the successful implementation of the first phase of the Uganda Support to Municipal Infrastructure Development program (USMID), the government of Uganda received additional financing to the tune of US$ 360 million from the World Bank/IDA to implement the second phase of the Program (USMID Additional Financing-USMID-AF) for 5 years starting in fiscal year 2018/19. This USMID-AF project ends next month December ,2023 and there are no assurances that it will continue next year .

Judith Nabakooba ,the Minister of Lands Housing and urban Development while briefing the nation about the progress of work done under the World Bank Funded project recently said that another 15 new municipalities were set to benefit from the well run project . 

The municipalities are; Mityana, Iganga, Masindi, Rukungiri, Bushenyi-Ishaka, Kumi, Nebbi, Koboko, Kisoro, Kapchorwa, Ibanda, Njeru, Bugiri, Sheema, and Kotido.  

Nabakooba  said the government is intending to roll out the extension of this program between 2024 and 2029, to ensure  more cities and  municipalities are developed.

“Urban roads of 116km, 22 local economic development and 57 km of primary drainage channels have been designed and are ready for implementation in the next phase, once the government and the World Bank sign the financing agreements,” the Minister explained.

Between phase one and ending phase two of the USMID, Ms Nabakooba explained that  $138million was spent on 14 municipalities some of which have since been elevated to city status  while $360million is being spent in phase two on 8 additional municipalities and 11 refugee hosting communities.

The 14 municipalities under phase one  were , Entebbe, Moroto, Kabale, Mbarara, Masaka, Fort Portal, Hoima, Gulu, Mbale, Tororo, Jinja, Arua, Lira and Soroti.

The Eight additional municipalities include; Busia, Apac, Ntungamo, Kasese, Lugazi. Kamuli, Kitgum and Mubende and the refugee hosting districts are (Isingiro, Kamwenge, Kiryandongo, Obongi, Lamwo, Terego, Madi-Okollo, Arua, Adjumani, Moyo, and Yumbe.

“This means that right now, the ministry is implementing USMID in 10 Cities, 12 Municipalities and 11 Refugee Hosting Districts. The Ministry support to the RHDs is in three fold; – infrastructure that enhances social cohesion between refugees and the host communities, physical planning of the land of the host communities and systematic land adjudication and titling of the same land,” she said.

Gulu roads were done through the USMID project

USMID-AF’s  development objective is to “Enhance Institutional Capacity of Selected Local Governments.” Its geographical coverage is in 10 cities namely: Fort Portal, Gulu, Hoima, Jinja, Lira, Soroti, Mbarara, Masaka, Mbale and Arua; 12 municipalities and 11 refugee hosting districts.

The program is executed and coordinated by the Ministry of Lands, Housing and Urban Development (MLHUD) led by minister Judith Nabakooba and Project Coordinator Dr. Isaac Mutenyo.

But after the World Bank suspension of loans to Uganda officials at USMID are not sure whether the project will receive funding from elsewhere .

This as government of Uganda is preparing to borrow $150M from China’s Export Import Bank (Exim) to help expand its internet infrastructure, according to the finance ministry.

The move underscores the East African country’s increasing reliance for credit on Chinese lenders after the World Bank halted all new lending to Uganda earlier this year in protest at a new anti-homosexuality law.

A junior finance minister and the minister for information asked lawmakers on Monday to authorise the debt, the finance ministry wrote on X, the social media platform.

The money, the ministry said, is “to finance the supply, installation, commissioning and support of the national data transmission backbone infrastructure.”

Uganda is in negotiations with Chinese export credit agency SINOSURE and Exim Bank for a loan to finance the construction of a pipeline to help Uganda export its crude oil to international markets.

The World Bank, traditionally Uganda’s biggest development lender, halted loans to Uganda after President Yoweri Museveni signed the Anti-Homosexuality Act which hands out tough sentences for a range homosexual activities.

Local leaders talked to in Mityana , Sheema and Kotido told that they needed the USMID project to be implemented in their areas next year as promised by government with or without the World Bank funding. “Let govt seek financing from other sources to implement this program which the locals are eagerly waiting for. We have seen what the program has done for cities like Gulu and Arua we want it as well, ” a lady district leader who declined to be named stated .

Sam Kidega a political activist said that the NRM government must have USMID extended because it “delivered” northern Uganda in the last elections. ” The voters were happy with USMID because infrastructure has greatly improved . The cities are beautiful and well lit . Commerce has increased . the same should be implemented in other areas of Uganda . Government can get financing from many other sources ,” Kidega argued .

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