Uganda owes banks $345m in project funding for delayed and stalled roads

Business reporter in Kampala, Uganda

Nation Media Group

The Uganda Bankers Association fronted a proposal for issuance of a Treasury bond by the Finance ministry but there are few signs of progress

Uganda Bankers Association (UBA) says road contractors are owed Ush1.3 trillion ($344.9 million) by government in unpaid invoices linked to existing road projects across the country.

This would be cheaper than borrowing money from a commercial bank at very high interest rates. Most of the multinationals in this town pay contractors and suppliers after 30 days upon receiving an invoice. Getting approval for a work certificate is not very hard. One might get an approval today and payment might come after seven months. There is also a challenge of gaps in budget allocations and disbursements. The Ministry of Works and Transport might send a requisition for Ush100 billion ($26.5 million) to the Ministry of Finance but the latter might disburse just Ush15 billion ($3.9 million). This means the Ministry of Works and Transport will split that amount among different contractors and each will get less than what they expected,” argued Charles Eibu, who runs a construction company.

Uganda owes banks $345m in project funding for delayed and stalled roads

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