The government has unveiled plans to write off loans to a tune of 108 billion Shillings that were given out under the Youth Livelihood Program. This follows a failure by the recipients to reimburse the money, especially during the COVID-19 pandemic.  

The plan was unveiled by the State Minister for Labour, Mwesigwa Rukutana in a presentation before the National Economy Committee of Parliament. The Ministry officials had appeared before the meeting to submit their views on the impact of the COVID-19 pandemic on the economy. 

Rukutana told the committee that close to 23,248 projects financed under the Youth Livelihood Program and Uganda Women Entrepreneurship Program are at risk of collapse due to the poor performance and slow recovery of funds. This, he says, will affect close to 500,000 youths and women. 

Rukutana explained that under the Youth Venture Capital Fund, at the time of the lockdown, 8.6 billion Shillings was lent out to the youths but no repayment has been received since.  Additionally, recoveries under the Youth Livelihood Program -YLP and the Uganda Women Entrepreneurship Program-UWEP have dropped by 90 per cent. 

“This means that the government will have to write off up to 108 billion Shillings in non-recoverable loans under YLP and UWEP. Writing off loans will reduce the fund portfolio which in turn will reduce the number of youth and women benefiting from interventions thus increasing youth unemployment by 2.7 per cent,” said Minister Rukutana. 

The revelation prompted MPs to call for the halting of the Youth Livelihood Program until a new study is carried out on its viability at elevating youths from poverty. Aswa County MP Reagan Okumu said that the Youth Livelihood Program had performed poorly even before the Coronavirus pandemic and that the failure should not in any way be blamed on COVID. 

“The Youth Livelihood Fund needs to be revisited; it is wasting a lot of money. I don’t know whether it can be blamed on the nature of our youths. They are gathered in trading centres, playing cards and looking for pork and stealing. We shouldn’t continue passing money in the name of YLP until the project isn’t streamlined,” Okumu said. 

Buvuma Island MP Michael Migadde also called for a review of the Youth Livelihood Program, saying the project was already on the verge of collapse before COVID-19 because the youths in Buvuma were already not repaying the money they had obtained from the Ministry of Gender.      

This comes at a time when businesses worldwide are struggling due to the effects of COVID-19 and institutions are asking for stimulus packages to resume operations as they have been hit by the lockdown.

Alex Otto