Inter-govt body offers to fund Uganda’s SGR
Sunday, April 07, 2024
President Museveni (centre) meets some officials from United Nations Alliance for Sustainable Development Goals at Kisozi Ranch on February 13. PHOTO/PPU
By
Isaac Mufumba
What you need to know:
- The SGR is a crucial project to Uganda’s economy, as the President describes it as the “bone marrow of the economy”.
With the Chinese increasingly unlikely to fund the 273km Standard Gauge Railway (SGR) line from Malaba to Kampala, the Ugandan government has turned to the private sector and non-state actors to help mobilise funding.
Sunday Monitor has learnt that the government has been engaging the Washington-based intergovernmental organisation, the United Nations Alliance for Sustainable Development Goals (UNASDG).
This newspaper has established that President Museveni and other government officials, including the Prime Minister, Ms Robinah Nabbanja, have held several rounds of talks with representatives of the organisation.
Sources close to the presidency told Sunday Monitor that Mr Museveni has so far held two meetings with the UnASDG team led by Mr Mukesh Kumar, the UnASDG regional resident representative for East Africa; Mr Patrick K Mutabwire, the deputy resident representative; and Mr Cyprian Batala, a UnASDG advisor.
Mr Mutabwire is a former Permanent Secretary in the Local Government ministry. The two meetings were
attended by Mr Raphael Magyezi, the Local Government minister.
We understand that the first meeting took place at the President’s Kisozi Ranch on February 13, with a follow-up meeting taking place at State House Entebbe on February 21.
Mr Sandor Walusimbi, the President’s senior press secretary, confirmed the meetings. He, however, declined to reveal what the President discussed with the UnASDG delegation.
“This meeting was private to the best of my knowledge and no press release was issued. I suggest you get in touch with the minister (Mr Magyezi). He may give you more details,” Mr Walusimbi said.
Three priority areas
Minister Magyezi was not readily available, but Sunday Monitor has learnt that discussions revolved around the need to mobilise funding for investment in transport infrastructure and the energy sectors.
“The President identified three priority areas for funding. There is the Standard Gauge Railway, which he described as the bone marrow of the economy, the Parish Development Model, and the development of geothermal power plants,” our source disclosed.
Uganda’s SGR project suffered a reversal when Kenya failed to secure Chinese funding in loans and grants to extend its SGR line from Naivasha to Kisumu, and on to the Malaba border crossing from where Uganda would take over its construction to Kampala and beyond. The Chinese financiers cast doubts about the viability of that line.
China at the same time declined to provide funding for the Ugandan side of the line. Kampala was early last year forced to terminate a contract it had handed the Chinese firm, China Harbour and Engineering Company Ltd (CHEC), to build the $2.2b SGR and moved to find a new contractor for the project.
Last week, Mr Museveni received a letter from President Xi Jinping of China expressing support for the Eacop (East African Crude Oil Pipeline) project. Following this, Mr Museveni revealed his ongoing intention to emphasise to Beijing the benefits of the SGR.
“I welcome China’s cooperation, in particular, the construction of a railway to the coast with the UPDF engineering brigade,” he posted on his X account on Friday, adding, “I also urge the Chinese government to encourage their companies to invest in value-addition at the source and import finished products from Africa to reduce dependency on exporting raw materials.”
Packages on offer
Sources close to the presidency indicate that Mr Museveni’s and the UnASDG delegations are set to meet again later this month to hammer out the final details of how the projects will be funded.
We have also seen a copy of a February 7, 2023 brief that the organisation sent to Ms Nabbanja before its representatives met the president.
“UNASDG is ready to provide a Sustainable Money Supply (SMS) of $5b as an unconditional investment payment with no debt and no loan,” the brief reads in part.
The money, according to the organisation, are earmarked for financing projects in key economic infrastructure sectors such as roads and power, as well as education, health, agriculture, and local government initiatives in cities and urban councils.
The brief also indicates that UnASDG is also committing to make some funds available as investment financing for projects in the health, energy, food, water and sanitation, education, culture and sports sectors.
“That means that Uganda does not have to pay back the loan and interest on them. The organisation invests and we recoup our investment with time, but the government and the organisation share the profits depending on what is agreed in the Memorandum of Understanding. Government at the same time collects taxes,” Mr Mutabwire told Sunday Monitor.
Deal sweetener
UnASDG is also offering to collaborate with the government to provide Ugandans with a universal basic income of $160 about Shs617,000 per month for every adult Ugandan for a duration of two and a half years. Modalities for disbursement of the funds are yet to be concluded.
Currently, only persons aged 80 and above are eligible for the Social Assistance Grants for Empowerment (Sage). Each of the beneficiaries receive Shs25,000 per month.
The organisation is also offering to open up a regional campus, SDG lab and financial centre to service the East African region as well as Botswana and Lesotho.
“The hub (campus) will bring significant opportunities to the country, including, among other things, being an economic and employment boost,” the brief notes.
The organisation further commits to supporting any emergencies and humanitarian efforts in the region, as and when the need arises, but all those offers are subject to Uganda fulfilling certain conditions.
UnASDG is demanding that government recognises it with International Organisation Status through signing a treaty; establishes a secured account in the Central Bank of Uganda through which funds will be channelled; official approvals in terms of lands, projects drawings, environmental clearances, pollution clearances and all other regulatory approvals required for the implementation of any projects; and approvals of stay and opening of the regional hub in Kampala.
According to Mr Mukesh Kumar, the draft agreement was meant to have been signed by March 30, but the period was extended pending another meeting with Mr Museveni.
The SGR is a crucial project to Uganda’s economy, as the President describes it as the “bone marrow of the economy”
MY TAKE
Sarakasi za SGR Uganda zikiendelea!