Members of Parliament reject a proposal by the government to borrow US$200 million from the Eastern and Southern African Trade and Development Bank to stabilize the exchange rate.
The decision to reject the proposal was reached at a sitting of Parliament chaired by the Speaker, Rt.Hon. Rebecca Kadaga on Thursday, 07th January 2016.
Hon. Theodore Ssekikubo (Lwemiyaga County) said that the country is borrowing for consumption and the multinationals will take away the same foreign exchange that was being borrowed.
“The big multinationals will take away the foreign exchange back to their countries and this makes no difference,” Hon. Ssekikubo said.
Serere district MP, Hon. Alice Alaso wondered whether it was an admission that the Bank of Uganda had failed to stabilize the foreign exchange by resorting to borrowing from foreign sources.
“Has Bank of Uganda failed? For as long as we run a boda boda economy, we shall not realize stability in the foreign exchange sector,” Alaso said.
Hon. Felix Okot Ogong (Dokolo County) said that the ruling party of NRM was not aware that there was need to borrow money to stabilize the foreign exchange rate.
He advised that government should find alternatives to the problem.
“I beg to move that the Minister withdraws the Motion because there are other ways of controlling the inflows and outflows of foreign exchange rather than borrowing,” Hon. Okot Ogong stressed.
The Minister of State for Finance for Privatization, Hon Aston Kajara, had earlier stated that there was need for borrowing because the shilling had depreciated against the dollar.
He also added that this has been caused by the low exports and weakening of foreign direct investments.
“We need a short term intervention to stem these factors which are causing problems in the economy,” he said.