Uganda to Seek $1.059 Trillion World Bank Loan for Refugee Support, Addressing Funding Suspension

The Minister of Relief and Disaster Preparedness, Hillary Onek, revealed the Ugandan government’s plan to secure a loan of Shs1.059 trillion from the World Bank aimed at offering assistance to refugees in the country.

This announcement follows recent negotiations with the World Bank, led by the State Minister for Finance, Henry Musasizi, focused on resolving the suspension of funding to Uganda triggered by the passing of the Anti-Homosexuality Act.

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Musasizi expressed confidence in the ongoing negotiations, assuring Ugandans of positive progress. “We are actively engaged in discussions with the World Bank and have made considerable strides,” Musasizi stated. He outlined that the World Bank has set benchmarks and raised concerns, which Uganda is diligently addressing by providing requested information and assurances.

Onek informed Members of Parliament about the government’s efforts to secure an additional amount of US$280 million (Shs1.059 trillion) from the World Bank. This fund is intended to support specific districts such as Bundibugyo, Amuru, Kisoro, and Kitgum to improve services for the increasing refugee population.

Uganda currently allocates Shs4.944 trillion annually towards refugee response, with a significant portion, Shs4.019 trillion, designated for the purchase of firewood to aid refugees in cooking their food.

Reports from the Food & Agricultural Organization (FAO), World Bank, and World Food Programme (WFP) revealed that 97% of the 1.3 million refugees rely on firewood, consuming 1.6 kilograms per year, valued at Shs5000 per day.

The Bank of Uganda reported to Parliament a noticeable fluctuation in the exchange rate, attributing the depreciation of the Ugandan shilling to the World Bank’s decision to suspend new loans due to the Anti-Homosexuality Act. The shilling dropped from approximately 3650 to nearly 3750 within two days after the World Bank’s decision was made.

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Michael Atingi-Ego, Deputy Governor of the Bank of Uganda, highlighted the sustained pressure on the currency due to uncertainties following the passage of the Anti-Homosexuality Act.

In response to Uganda’s enactment of the Anti-Homosexuality law, the World Bank Group announced a pause in public financing to the country, citing the law’s contradiction with the organization’s core values. This led to the suspension of new loans until further assessments are conducted.