Uganda is turning to local pension funds as a survival measure following external freezing of funding from the World Bank.
The government is in talks with the World Bank for the lender to rescind its decision to withhold budget support for Kampala worth Ush6.7 trillion ($1.787 billion). The bank suspended funding last month in the wake of Kampala’s decision to pass a new anti-homosexual law deemed by the West as a violation of rights of minorities.
Last week, the National Planning Authority, technical officials at the Ministry of Finance, Parliament’s Committee on National Economy, Budget Committee and Finance Committee held a retreat over the economy. Officials said the Treasury is rethinking its fiscal strategy to increase domestic revenue collection, reduce borrowing, cut nugatory public expenditure and reduce supplementary budgets of government agencies spending above their vote
Other measures, Secretary to the Treasury Ramathan Ggoobi said, are to downsize state agencies, suspend purchase of vehicles, reduce workshops and foreign travel and freeze creation of new administrative and electoral units.
“We agreed that if this is not done, we will soon go into financial distress and as a country and be flagged by the IMF as a credit risk,” said opposition legislator Gorreth Namugga.