Why gov't borrowed Shs270 billion less for Umeme buyout
The Ugandan government saved approximately 270 billion shillings by borrowing less than the parliamentary-approved ceiling for the Umeme buyout. Despite the lower loan amount, the government remains potentially exposed to further financial liabilities due to ongoing disputes.
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This highlights fiscal management and the complexities of public-private utility concessions in emerging markets.
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NEWS ANALYSIS | URN | The government avoided taking on approximately 270 billion shillings in additional debt after the Auditor General’s assessment reduced the amount the Government borrowed to buy out electricity distributor Umeme Company Limited at the end of its 20-year concession.
Parliament had authorised the Government to borrow up to the euro equivalent of US$190.99 million, about 711 billion shillings, for the Umeme buyout.
But the Government eventually borrowed the equivalent of US$118.39 million, or about 440 billion shillings, leaving roughly US$72.6 million, about Shs270 billion, unborrowed.
The reduction represents nearly 38 per cent of the borrowing ceiling approved by Parliament.
However, documents submitted to Parliament on Tuesday show that while the Government may have contained its immediate borrowing requirement, the lower payout did not necessarily bring a complete end to the financial dispute surrounding Umeme’s exit.
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