Uganda Army Seeks Shs 380bn Loan for ‘Urgent Classified’ Expenditure

The Ministry of Finance has asked Parliament to give Government a green light to quickly borrow Shs 380bn from the domestic financial market for a “classified” expenditure under Ministry of Defence and Veteran Affairs.

It remains unclear what the money is meant for as the military doesn’t disclose details of its classified budgets.

“Hon. Speaker, as you are aware, the total approved budget for financial year 2018/19 is Shs 32,707.82bn. However, Shs 9,517.9bn of this budget is to be financed through borrowing of which Shs l,734bn is from external sources and Shs 1,783bn is from the domestic market. So far, Shs 605bn has been raised in Net domestic Financing leaving Shs 1,178bn to be raised in the remaining auctions in financial year 2018/19 based on the approved NDF of Shs 1,783bn,” reads a brief from Finance Ministry to Parliament.

This financial year as part of the appropriation, the Net Domestic Financing of Shs 1,783bn was approved for the defence Ministry.

“However, an urgent need has arisen which requires to finance a classified expenditure of USD 100mn (approximately equivalent to Shs 380bn),” reads the note to Speaker Rebecca Kadaga.

It is possible the requisition is meant for payment of salaries for Local Defence Unit (LDU) personnel who were recently recruited to reinforce police in countering rising levels of crime in Uganda.

Most importantly, Uganda has of late been reinforcing military deployments along the western border to prepare for ADF which has increased attacks in the neighbouring Democratic Republic of Congo.

The Finance Ministry emphasized to Kadaga the urgency for which the funds are needed: “This expenditure was budgeted for and is a fiscal deficit, since it is over and above the approved budget for this financial year, Financial Year 2018/19. These funds are required immediately and since they cannot be raised by an increase in tax collection or external borrowing all of which take long to accomplish, hence the request to borrow locally.”

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