- International Monetary Fund (IMF) recently sanctioned $258 million as part of the $1 billion IMF for Uganda to boost economic recovery following the Pandemic.
- IMF has attached specific conditions to the $1 billion Extended Credit Facility.
International Monetary Fund (IMF) recently sanctioned $258 million as part of the $1 billion IMF for Uganda to boost economic recovery following the Pandemic. IMF has attached specific conditions to the $1 billion Extended Credit Facility
To meet the conditions, the Ugandan government has developed a credible structural adjustment programme in accordance with the National Development Plan III which is supported by the IMF’s loan under the Extended Credit Facility (ECF).The objective of the ECF is to support economic programmes aimed at restoring macroeconomic stability and reducing poverty through strong growth.
ECF granted to Uganda is for a three year period, and carries a zero-interest rate with a grace period of 5½ years and a final maturity of 10 years. The loan will be disbursed in semi-annual tranches subject to review to assess the government’s progress in implementing its economic reforms. The main goal of the reform programme is to support a recovery from the pandemic and promote private sector-led growth. It is expected to boost spending in health, education and social assistance, foster greater transparency in public accounts, a stronger anti-corruption framework, and improved the resilience of the financial sector.
One worrisome issue of Uganda is its swelling public debt which rose from 41.1 per cent of GDP in 2019 to 49.6 per cent in 2020 and will be above 50 per cent by the end-2021.The fiscal strategy under the ECF aims at reducing the fiscal deficit, the main contributor to debt in the past years through mobilising domestic revenues and reprioritising expenditures.
