Uganda Government to borrow $400M from state pension fund
Uganda's government is considering borrowing about $400 million from the country's sole statutory pension fund to finance the construction of roads, the president said on Thursday.
Yoweri Museveni said his government needed about $4 billion to fund the construction of about 3,400 kilometres of roads and was eyeing the National Social Security Fund (NSSF) among other possible sources of credit.
"NSSF doesn't have much money, it has about 2,800 billion shillings ($1.13 billion) ...possibly we could borrow something like 1 trillion shillings," Museveni told parliament in an annual state-of-the-nation address.
Like other African nations, the east African coffee producer lacks good roads, railways and power supplies. The African Development Bank says the continent needs to invest $92 billion every year to keep up with infrastructure demand.
Much of Uganda's infrastructure funding has traditionally been acquired from the World Bank, the Africa Development Bank, the European Investment Bank and other multilateral lenders.
A deal with the NSSF would mark the first time the government turned to local lenders to fill gaps in infrastructure funding.
All employers are required to remit 15 percent of each worker's monthly salary to the fund as social security savings to be redeemed upon retirement.
The fund mostly invests in government securities and real estate but Richard Byarugaba, its managing director, told Reuters last year that it would be willing to enter into partnerships with government to provide credit for projects in the transportation and energy sectors.
Uganda discovered oil in 2006 in the Albertine rift basin along its border with the Democratic Republic of Congo and commercial production is expected to begin around 2014.
"With our oil, matters will be easier, we shall be able to fund the roads, the railway and power stations easily using our own money," Museveni said.