afrol News, 24 February - The government of Uganda has secured three financing agreements with the World Bank and one loan disbursement from the International Monetary Fund (IMF) today, totalling US$ 205 million. The World Bank financed projects are in the fields of private sector development, road sector development, power sector reform and a privatisation programme.

The government of Uganda has signed several financing agreements with The World Bank, securing loans and grants for several key development and reform projects. The World Bank funded projects focus on infrastructure and economic reform.

The largest loan agreement, worth a total of US$ 107.6 million, is to finance a Ugandan project focusing on road sector development in the country. Uganda's "Roads Development Programme" (RDP) aims to improve access to rural and economically productive areas and to continue to improve road sector planning, design and management capability.

The current phase of the government's road programme includes the rehabilitation of the Busega-Mityana road, upgrading from gravel to paved bitumen standard of 284 kilometres of highways and the detailed design for upgrading about 300 kilometres of selected district feeder roads to the national road standard. Other activities are the construction of new Road Authority headquarters building, and the provision of institutional support for the establishment of the Road Authority.

The second World Bank financing agreement for Uganda signed yesterday, worth a total of US$ 70 million, aims to support private sector development in the country. The loan partly finances a government programme to eliminate "key constraints to Uganda's international competitiveness." The programme however currently awaits approval by parliament in order to become effective.

The government reforms are to create sustainable conditions for enterprise creation and growth that respond to local and export markets. They also aim to help "reduce the costs of doing business and encourage investment while enabling the private sector to be better positioned to respond to investment and export opportunities."

According to Judy O'Connor of the World Bank, Uganda's private sector development programme and its approach "is trend setting for private sector development projects within the Bank." Many African countries were said to be "looking at the success of this programme closely" for similar approaches.

The third World Bank funding agreement is an amendment to Uganda's state power project, which will make use of cost savings amounting to about US$ 25 million to enhance the implementation of the government's power sector reform and privatisation programme. It focuses on helping to improve power supply to meet demand by "supporting critically needed investments in the power sector."

Finally, the IMF today announced the disbursement of about US$ 3 million to finance Uganda's poverty reduction and economic growth programme. The disbursement came after IMF staff had completed a review of current reform work and budget spending of the Ugandan government and found this to be in line with agreements earlier made with the Fund.

According to the IMF's Takatoshi Kato, Uganda had indeed accomplished an "impressive economic growth and poverty reduction" during the last few years. This had been achieved through a first wave of economic reforms that had "started to taper off," but there was now "a need to launch a second wave of reforms to increase the rate of growth, address the challenges stemming from the high population growth and continue to reduce poverty," Mr Kato said.

Economic growth rebounded and inflation declined in 2003/04 due to improved agricultural production, an IMF analysis had found. Ugandan authorities plan to sustain a higher rate of growth by "pursuing a medium-term fiscal consolidation strategy to maintain debt sustainability and create more room for the private sector," Mr Kato had been told in Kampala.

By staff writer

© afrol News

Related pages and feature

Current afrol News Top Stories