SEATINI Rallies Members of Parliament on Transparent, Equitable and Accountable use of Special Drawing Rights
The COVDI 19 pandemic has affected domestic revenue mobilization and the pace of borrowing for Uganda has heightened the risks and vulnerabilities associated with the debt trajectory, resulting in a shift in categorization from low to moderate risk of debt distress.
On August 23rd, 2020 the International Monetary Fund (IMF) allocated $650 billion worth of Special Drawing Rights (SDRs) to member states to help countries tackle the economic impact from COVID 19. Uganda as an IMF member country, received about $490 million equivalent of 1.7 trillion Ugandan shillings. Special Drawing Rights (SDRs) are a crucial option to help finance the COVID response and hasten an equitable and inclusive economic recovery.
On 5th November 2021, SEATINI Uganda in partnership with Diakonia held a dialogue with Members of Parliament and other stakeholders on promoting transparent, equitable and accountable use of Special Drawing Rights to maximize impact for sustainable and just recovery in Uganda.
In her opening remarks, Ms Jane Nalunga, Executive Director, SEATINI Uganda emphasized that currently, the elephant in the room is Domestic Revenue Mobilization (DRM).
Ms Jane Nalunga further noted that Special Drawing Rights (SDRs) is an international reserve asset created by the International Monetary Fund in 1969 to supplement other reserve assets of member countries.
‘‘COVID 19 has greatly battered economies globally including Uganda’s economy. Tax revenues have also gone down. Uganda has been acquiring loans from various lenders. The country is indebted up to the neck,’’ Jane Nalunga said.
Hon. Silas Aogon, Member of Parliament Kumi Municipality, Kumi District challenged other Members of Parliament that they have alot of power which they ought to use rather than sleeping over it.
Hon. Aogon Silas observed that there is limited information and accountability to the general public about loans being acquired. There is therefore need for the government to do much more in terms of sharing information about loans acquired and the intended purpose/benefit.
Hon. Batuwa Timothy Lusala, Member of Parliament Jinja West emphasized that government should come up with an economic stimulus package which is different from existing packages given that many of them have ignored and left out critical actors in the economy.
Ms Peninnah Mbabazi, Programme Officer, Debt and Aid, SEATINI Uganda noted that SDRs can be a perfect substitute for a financing package able to serve both specific pandemic relief and long term development goals.
At the end of the dialogue, Members of Parliament offered themselves to act as a champions on debt issues in Parliament and call for prudent use of not only SDRs but also borrowed funds.