Gov’ t Seeks Parliament Approval To Borrow US$200 Million For Industrial Transformation

The government is seeking Parliament’s approval to borrow up to US$200 million to finance the Investment for Industrial Transformation and Employment (INVITE) Project.

The request was presented by State Minister for Finance Hon. Henry Musasizi on Wednesday, 05 April 2023.

The INVITE Project aims at mobilising private investment in the manufacturing and export sectors which will in turn strengthen the private sector to drive economic growth.

It also seeks to support new economic opportunities across the country, sustain and generate new investment, and generate more exports and private-sector employment.

“The on-set of the Covid-19 pandemic and resultant economic slowdown have negatively compounded the low grace of investment in the country. Thus calls for setting the course for a higher growth trajectory to enhance economic transformation,” Musasizi said.

The funding will be facilitated by the International Development Association of the World Bank Group.

A revolving fund and grants for small and medium enterprises (SMEs) in the manufacturing sector and value chain will be financed with US$150 million and US$50 million respectively.

Grants for business development services required by exporters and technical assistance required by government institutions that support exporters will be facilitated with US$18 million, from a multi-donor trust fund grant.
“The benefit of the programme financing includes support to the extension of loan periods for an expected 5,300 SME borrowers,” Musasizi added.

The funds will also support the expansion of manufacturing activity beyond the Greater Kampala Metropolitan Area including districts that host refugees.

The loan request will now be considered by the Committee on National Economy which will present a report before the House for approval.