Uganda plans to borrow $388 million to revive its national carrier, which has been grounded for over 15 years, as the clock ticks towards the December launch date.

Works and Transport Minister Monica Azuba had announced that the government will buy four Bombardier aircraft in readiness for Uganda Airlines' launch in December, but the Ush4.8 trillion ($1.2 million) allocated to the ministry in the 2018/19 budget does not earmark money for the purchase of the said aircraft.

“Financing for the airline was not included in the 2018/19 budget because we intend to use export credit from the countries selling us the airline,” she said, without giving further details.

Finance, Planning and Economic Development Minister Matia Kasaija told parliament that the government will borrow Ush7.9 trillion ($2 billion) from domestic and external sources to finance its projects.

While Uganda’s public finance management law allows for supplementary budget requests to take care of items that have not been budgeted for, little has been done towards the airline project six months to the deadline.

Information on the Bombardier website shows that the aircraft that Ms Azuba says Uganda intends to buy costs much more than what the Public Finance Management Act allows.

Ms Azuba told journalists that Uganda will be buying aircraft with a capacity of between 80 and 100 passengers to cater for regional and internal flights.

According to Bombardier, this capacity is provided by the CRJ 700, which seats anywhere between 76 and 90 people and costs Ush159.1 billion ($41.4 million). To get the four aircraft, Uganda will have to borrow Ush636.3 billion ($165.6 million).

In addition to the fact that any loan taken by Uganda would have to first be approved by parliament — a process not started in the current ending financial year -- the money for the aircraft is more than the ministry of works and transport can request for in a supplementary budget in the coming financial year as this would blow the legal supplementary budget ceiling.

The Public Finance Management Act states that any supplementary expenditure which is in excess of the appropriated budget of a vote shall be treated as a loss of public funds, as provided for under Section 79.

Under this section, accounting officers of government institutions are not allowed to make unauthorised expenditure. And that an accounting officer who doesn’t respect this section of the law commits an offence and shall on conviction be liable to a fine not more than Ush10 million ($2,573.22) or a term of imprisonment not exceeding four years, or both.

The vote for the ministry of works and transport, which excludes self-accounting agencies like the Road Fund, the National Roads and Kampala Capital Authority, was according to the budget framework paper, allocated Ush624.6 billion ($167.7 million) for financial year 2018/19. The airline project falls under the Ministry of Works and Transport vote.

In her May statement, Ms Azuba also told journalists that Uganda had already deposited $1.2 million as commitment fees to Bombardier and European aircraft maker Airbus.

Uganda seeks to revive its national carrier at a time when competition for the East Africa skies is intensifying with Kenya Airways working to put its house in order to maintain its dominance over the region’s routes and Rwanda investing heavily in a new airport and improving old facilities as well as fleet expansion and improvement.

Dar es Salaam is also investing heavily on the revival of its carrier Air Tanzania.