In a heated session on Thursday, 20 March 2025, Uganda’s Parliament approved a government request to secure a loan exceeding US$190 million from Stanbic Bank Uganda to facilitate the buyout of Umeme Limited, the country’s main electricity distributor. The decision came despite strong reservations from lawmakers, particularly members of the Committee on National Economy, who raised concerns about transparency and the accuracy of the buyout figures.

The debate was intense, with Committee Chairperson Hon. John Bosco Ikojo leading the charge against rushing the loan approval. He argued that the government should wait for the Auditor General to finalize an assessment of the exact buyout amount before proceeding. “The Auditor General has yet to determine the final buyout figure. Given the limited time remaining before Umeme’s concession expires, the Auditor General must urgently coordinate with the Electricity Regulatory Authority (ERA) and Uganda Electricity Distribution Company Limited (UEDCL) to establish the actual cost and submit it to Parliament to guide the loan authorization,” Ikojo stated.

The committee’s concerns were echoed by both majority and minority members, who pointed out discrepancies in the estimated buyout sum. Initially, the Electricity Regulatory Authority projected the cost at US$225.7 million, but this figure was later revised to US$127.6 million. Despite this, the government requested US$190.9 million, raising questions about the rationale behind the higher amount.

Hon. Charles Tebandeke, MP for Bbale County, presented the minority report and emphasized the need for transparency. “We cannot sanction a loan when ERA’s latest estimate places the buyout at US$127 million, yet the request before us stands at US$190 million. This inconsistency is alarming,” Tebandeke remarked. He insisted that approving the loan without the Auditor General’s final confirmation would set a dangerous precedent.

Despite these concerns, Minister of State for Finance (General Duties), Hon. Henry Musasizi, urged Parliament to approve the loan without delay. He warned that any postponement could disrupt the transition process and expose the government to hefty financial penalties. “The government is legally mandated to compensate Umeme, and failure to do so within the stipulated period will result in significant interest penalties,” he emphasized.

The debate also highlighted broader issues surrounding the buyout. Hon. Denis Oguzu Lee, MP for Maracha County, questioned whether the government had a comprehensive understanding of Umeme’s assets and liabilities. “What are Umeme’s assets and liabilities? Are there pending tax obligations or unresolved environmental compliance matters? If these liabilities fall on the government, who will be held accountable?” Oguzu queried. His concerns underscored the need for thorough due diligence before finalizing the buyout.

Speaker Anita Among criticized the government’s timing, noting that the buyout should have been addressed much earlier rather than being rushed just nine days before the concession’s expiration. However, Attorney General Hon. Kiryowa Kiwanuka defended the timing, explaining that the terms of the concession agreement stipulated that the buyout process could only be executed upon contract completion.

Despite the objections, the loan was ultimately approved, with Speaker Among directing that only the amounts verified by the Auditor General should be disbursed to prevent overpayment. This decision reflects Parliament’s attempt to balance the urgency of the buyout with the need for accountability.

In a related development, Parliament also approved two significant loans aimed at boosting the financial capacity of the Uganda Development Bank (UDB). The House authorized a US$100 million loan from the Arab Bank for Economic Development in Africa (BADEA) and the OPEC Fund for International Development (OFID), as well as another US$100 million loan from the Islamic Development Bank (IDB), the Islamic Corporation for the Development of the Private Sector (ICD), and the International Islamic Trade Finance Corporation (ITFC).

However, concerns were raised about the equitable distribution of UDB’s funds. Hon. Godfrey Onzima, MP for Aringa North County, pointed out that UDB’s funding predominantly benefits a limited group of Ugandans and does not reach all regions of the country equally. Speaker Among echoed these sentiments, emphasizing the need for fairness. “We must ensure fairness in the allocation of these funds. It should not be that some regions are excluded from benefiting. The sectoral committee must oversee equitable distribution of these loans,” Among stated.

In response, Minister Musasizi assured Parliament that a detailed breakdown of UDB’s fund distribution across the country would be provided to guarantee transparency. Hon. Esther Apwoyochan, NRM Woman Representative for Zombo District, acknowledged UDB’s positive impact but conceded that not all regions had reaped equal benefits. “Although not everyone has accessed the funds, boosting UDB’s financing will empower more Ugandans and expand its reach,” she remarked.

With these loan approvals, the government is expected to expedite the Umeme buyout process and enhance financial accessibility through UDB. However, the debates in Parliament have highlighted the need for greater transparency and accountability in handling such significant financial decisions. As Uganda moves forward with these initiatives, the focus will remain on ensuring that the benefits are felt equitably across the nation.