By Stephen Kalema

Agence Francaise De Development (AFD) is set to lend Uganda Euro 270million ( Shs1,155trn). AFD is a public financial institution that implements the policy defined by the French Government. It works to fight poverty and promote sustainable development.

The decision to borrow the money was reached on Monday during a weekly Cabinet meeting at State House, Entebbe.
According to the government spokesman Ofwono Opondo, the money will be used to develop two water projects; water and sanitation infrastructure for the South western cluster project I (Mbarara-Masaka areas) and also support the Kampala Water project II.
“Cabinet approved the proposal to borrow up to Euro 120 million for the development of water Sanitation Infrastructure for south Western cluster Project I (Mbarara -Masaka) and  Euro150million for Kampala Water (Lake Victoria Water and Sanitation projectII),” said Opondo.
According to Opondo the main objective of the two projects is to improve the health, living standards and productivity of the population in the project areas, regardless of their social status or income through equitable provisions of adequate and good quality water supply and improved sanitation services at acceptable and sustainable basis.
South Western cluster will benefit Mbarara, Masaka and towns of Kyotera, Sanje, Kakuti, Mutukula, Rakai, Lyantonde, Rushere, Kazo, Kyazanga, Katovu and Sanga.
Lake Victoria and Sanitation project is to ensure water provision in the Greater Kampala Metropolitan areas.
“This project is to address the growing water supply challenges through development of new infrastructure as well as rehabilitation and expansion of the existing system,” added Opondo.
In March,Bank of Uganda issued a document cautioning the government that the public debts had reached $15.1billion.  And according to  Uganda’s indebtedness status report presented by State Minister for Planning David Bahati before the Parliament on October 2, Uganda’s domestic and external debt had hit Shs41.3 trillion.
Bahati said the external debt accounts to about Shs27.3 trillion while domestic debt alone is Shs13.3 trillion which is vary dangerous to our economy.