Like Housing Finance Bank? Until last month, the government made desperate push for approval of UGX60 billion that it said would help in recapitalisation of Housing Finance Bank. Minister David Bahati failed then and had to withdraw. Now it is the National Palm Oil Project.
Cabinet has endorsed plans and directed the State Minister for Finance, Planning and Economic Development, David Bahati, to seek parliamentary approval to borrow UGX276 billion from the International Fund for Agricultural Development (IFAD) to support the National Palm Oil Project (NOPP).
Chaired by President Museveni, Bahati presented the proposal and noted that the said funds will support the NOPP and contribute to sustainable poverty reduction in the project areas.
“Development objective of this project is to increase the domestic production of vegetable oil and it’s byproducts, raising rural incomes for smallholder producers and ensuring the supply of affordable vegetable oil products to Ugandan consumers and neighboring regional markets,” Bahati said during the cabinet meeting at State House, Entebbe.
The new Cabinet move comes barely a month after the government tried and failed to earn parliamentary approval for recapitalisation of Housing Finance Bank to a tune of UGX60 billion.
According to the minister, the project will cover ‘climatically suitable areas’ within a radius of about 30km, in which at least 3,000 hectares of smallholder oil palm production can be assured.
The areas that will benefit from the project are Buvuma Island, Mayuge, Masaka and Rakai, while in Kalangala, the project will consolidate the investments undertaken under the phase two of the vegetable oil project, and support to oil palm communities with activities complementary to oil palm investment.
‘The project will consolidate the investments undertaken under vegetable oil project, phase two and support oil palm communities with activities complementary to oil palm investment, but will not expand the area under oil palm production,’ Bahati said
Meanwhile, Frank Tumwebaze, the minister for communications and ICT, also told the media during the weekly cabinet briefing at Uganda Media Centre in Kampala on Tuesday, that the Finance minister will now seek approval from Parliament as he averred that this will be achieved through increase in the domestic production of vegetable oil, and its byproducts, to raise rural incomes from smallholder producers and ensuring the supply of vegetable oil products to Ugandan consumers and regional neighboring markets.
The oil project is a component of the Vegetable Oil Development Project (VODP) under the Ministry of Agriculture.
Cabinet also approved the proposal to borrow UGX18 billion as supplementary loan from the African Development Bank to finance the Kampala Sanitation Programme. The Programme aims at improving sewerage situation in Kampala, improvement of the collection of faecal sludge, and construction of treatment facility for water and faecal sludge.
Under the project, a waste water treatment plant with capacity 45,000 cubic metres per day will be established at Bugolobi Wankoko. At least 31 kilometers of sewer networks are to be constructed within Nakivubo and Kinawataka catchment areas and a pre-treatment plant while a pumping station of capacity 9000 cubic metres per day is constructed at Kinawataka wetland.
State minister for Planning David Bahati said the country is still in an appropriate position of getting loans with the state of indebtedness at only 38.6 percent compared to the East African Community recommended threshold of 50%.
It should be noted that by May last year, Bank of Uganda State of the Economy report indicated that Uganda’s external and domestic debt had reached US$11.2 billion acquired to facilitate the construction of various government projects including the refurbishment of hospitals.
