In response to the suspension of external funding from the World Bank, Uganda is exploring alternative means of financial stability, with a notable pivot towards leveraging local pension funds.
Reports from The EastAfrican indicate that the Ugandan government is currently engaged in discussions with the World Bank, urging the lender to reconsider its decision to withhold budget support totaling Ush6.7 trillion ($1.787 billion) earmarked for Kampala. The World Bank had taken this action last month in the aftermath of Uganda’s enactment of a controversial anti-homosexual law, which was strongly condemned by Western nations for its perceived infringement on the rights of minority groups.
Recently, key stakeholders in Uganda’s financial planning, including the National Planning Authority, technical officials at the Ministry of Finance, as well as parliamentary committees such as the Committee on National Economy, Budget Committee, and Finance Committee, convened for an economic retreat. During these discussions, it became evident that the Treasury is contemplating a comprehensive fiscal strategy overhaul. This strategy aims to boost domestic revenue generation, curtail borrowing, trim unnecessary public expenditures, and curbing the allocation of supplementary budgets to government agencies exceeding their budget limits.
Secretary to the Treasury, Ramathan Ggoobi, further detailed additional measures being considered, including the downsizing of state agencies, a temporary halt on vehicle procurement, reductions in workshops and foreign travel, and the suspension of the creation of new administrative and electoral units.
Opposition legislator Gorreth Namugga expressed a sense of urgency in addressing these fiscal challenges, stating, “We agreed that if this is not done, we will soon go into financial distress and, as a country, be flagged by the IMF as a credit risk.”
As Uganda navigates these economic challenges, the nation’s focus on local pension funds underscores a shift towards self-reliance and a determination to stabilize its financial situation amid the current funding freeze from international sources.