Why government is borrowing to plant forests

On Wednesday, Parliament deferred a request by the government to borrow $78.2 million (more than 285.4 billion) from the International Development Association (IDA) of the World Bank Group, to plant forests in 19 districts in western and northern Uganda.

The loan is part of a litany of loans amounting to more than Shs 1.4 trillion that Parliament handled on Wednesday, despite warnings from economists over the growing public debt which by the end of last financial year stood at $15.27 billion (more than Shs 56 trillion) which is 49.9 percent of GDP. By October 2020, the Bank of Uganda in its monetary policy report put the public debt at more than Shs 63 trillion ($17.2 billion).

Finance minister, Matia Kasaija is expected to return to Parliament next week to convince Parliament to approve the loan that he started processing on March 30, 2020, when he wrote to Museveni seeking clearance to the committee the Ugandan taxpayer to another debt.

Four days later, Museveni gave Kasaija a nod of approval and almost a year later, on February 11, 2021, the minister tabled the loan request before Parliament that he said is need to improve the management of 1.2 million hectares in 28 central forest reserves, seven national parks and four wildlife reserves in Albertine and West Nile regions.

“If this Parliament is serious, it should put a stop on this growing appetite for loans by the Ministry of Finance. How do you borrow to plant trees?” wondered Budadiri West MP, Nathan Nandala-Mafabi.

Among the 19 beneficiary districts is Hoima and Kikuube where the government is controversially giving part of Budongo forest for the growing of sugarcane.

“The forests were cut by this government. Go to Bujuuko on Mityana road or Kampiringisa on Masaka road and see what remains of the natural forests we had…” Kalungu West MP Joseph Gonzaga Ssewungu said.

But the state minister for Planning, David Bahati defended the loan request telling the MPs that it is in line with the idea on climate change that Parliament has been pushing.

“The purpose is to protect the environment and support climate change management,” Bahati said.

In its report, the committee on National Economy agreed to government’s desire to take this loan because Uganda’s economy heavily reliant on renewable natural resources.

“A heavy reliance on rain-fed and subsistence agriculture continues to expose the economy to risks from adverse weather, and these risks are likely to grow under most scenarios for future climate change. Uganda is vulnerable to climate change, and its impacts are already being experienced in the region,” the committee report reads.

Forests, wetlands, and protected areas are important for the development of rural areas, for mitigating impacts of climate change, and for building the resilience of rural communities to climate change effects. It is estimated that Uganda’s natural capital contributed almost 40 percent to overall wealth in 2014, but forests and wetlands, in particular, are being lost and degraded rapidly,” the report further reads.

Government also argues that the need to plant forests will complement the National Development Plan (NDP III) efforts that are aimed at increase Uganda’s forest cover from 9.5 percent to 15 percent by 2024/25.


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