Uganda poor at negotiating foreign debts

Reposted from All Africa

A researcher at the Economic Policy Research Centre (EPRC) has said that Ugandan technocrats still have a challenge in negotiating for external debt.

[clickandtweet handle=”” hashtag=”” related=”” layout=”” position=””]Lack of negotiating skills leads to the failure by the country to absorb the funds for a project.[/clickandtweet] Dr Ezra Munyambonera, a senior research fellow at EPRC, said most ministries don’t have the capacity to negotiate debts and also don’t have the capacity to implement some of the projects when they get the foreign debts.

“We see a problem when it comes to ministry level; the level of skills at the project implementation stage are limited and sometimes projects are not adequately negotiated,” he said. He added: “Lack of negotiation skills lead to over-costing or under-costing and when you come to implementation, you find something else.”

Munyambonera was speaking at a validation workshop on Mobilising and Managing Financial Flows for the Development of Uganda, which was organized by African Centre for Economic Transformation (ACET) and EPRC.

Uganda has a cumulative debt of $9bn but roughly $4.5bn has not been utilized between 2002 and 2012. The absorption of loans stands at 50 per cent. ACET is undertaking a study to review and assess what some African countries have done in light of the changing development finance. The study is being carried out in Burkina Faso, Ghana, Rwanda, Tanzania, and Zambia.

Munyambonera also explained that debt absorption capacity is still a problem and the government should address this in order to benefit from the loans it gets.

“We are seeing a cumulative loan of about $9bn and we are projecting to borrow more. The issue of lack of adequate procedures to absorb these loans continues to come up; we need to create means on how to absorb these loans,” he said.

“Countries like China are giving us loans to build infrastructure but how these funds will be absorbed and projects implemented is still a challenge, we have to see that we have institutions that will put these funds into use to avoid lag,” he added.

Read more at All Africa

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