World Bank to increase funding to Uganda

The World Bank vice-president for Africa, Makhtar Diop, this week left Uganda with the kind of message Kampala would like to hear – financial assistance will be tripled in coming years.

In particular, Diop said, support will go to infrastructure development, education and agriculture sectors. On Monday, Diop together with Simon D’Ujanga, Uganda’s state minister for Energy, visited Bujagali hydro power station in Jinja, one of the initiatives supported by the World Bank.

At Bujagali, Diop underscored the value of public-private partnerships (PPP) in financing infrastructure projects in Africa.

“Transforming the economies of Africa will require energy that is reliable and cheap. To construct such energy plants, we need the private [sector] on board because it is not possible for governments to finance these very expensive projects,” he said.

The station was contracted by Bujajali Energy Limited (BEL), under PPP arrangement. BEL is expected to run the plant and recoup its investment in 30 years, after which it will hand it over to government at no cost.

Diop lauded PPP, stressing it was the way to go for Africa, since the partnership pools resources both from government and the private sector for serious infrastructure developments. He said he was particularly in Uganda to learn more how PPPs work so that it can be reciprocated across the continent.

“This [PPP frameworks] is the future of Africa,” he said.

He said World Bank planned to redirect its support to infrastructure projects.

“Accelerating the PPP legal framework will help the country to move in that direction faster than what we are doing right now. The PPP law will bring more private players in infrastructure development,” he said.

Uganda is working on a PPP legislation, now before parliament, to regulate the arrangement. Before visiting Bujagali, Diop discussed the bank’s future investment portfolio in Uganda with President Museveni and cabinet.

“In the next couple of years we [World Bank] are planning to invest another $200m to invest in the energy sector mainly in rural electrification and other energy interventions,” he announced.

Already, Uganda plans to invest up to $10bn in infrastructure projects in the next five years. This, Diop said, would increase the productive base of a country that had up to 2,000 Megawatts potential of hydropower, most of which remains untapped.

In the meeting with Museveni, Diop said they discussed possibilities of building a modern port around Lake Victoria, which can be accessed through a railway line that can link the three East African countries of Uganda, Kenya and Tanzania, improve trade, and further enhance regional integration.

He, however, noted the need to harmonize the laws and policies to forge a regional common standard.

“We also discussed the issue of increasing skills development in the country to ensure that the education system marches with knowledge and skills required in the labour market. One of the things we agreed on is how to increase the scientific content in the education sector. This is not a problem only in Uganda but the entire African continent, where we have few people trained in science and technology, which is key to transformation of the base of the economy,” he said.

He revealed that World Bank would offer $75m to finance science and technology training in the education sector. The bank will also increase funding to the agriculture sector to improve its productivity: “We are discussing with government right now on how we can help five crops: cassava, maize, rice, beans and coffee to increase their productivity,” he said.

On his part, D’Ujanga thanked the World Bank for supporting the Bujagali project, the country’s biggest power plant. Diop said the bank was still relevant even in the face of growing Chinese investment in Africa. In Uganda, the Chinese are already constructing Karuma and Isimba power plants in addition to the investments in building roads and financing operations in the oil and gas sector.

“As an African, what matters for me is how we can increase investment in my continent to be able to grow our continent and make it. We should move out of this idea of who has influence and who doesn’t have; what is important is how to mobilise the maximum of resources for our continent to move forward.

Whether that support is from the World Bank, China, Japan, USA or Brazil; whoever wants to invest in Africa should come and invest, as long the investment will benefit Africa,” Diop said.

ssekika@observer.ug