Uganda is asking for at least $900 million for its budget under a three-year IMF program, citing growing cost owing to the Covid-19 outbreak.
In a press conference conducted by Gerry Rice, Spokesperson of the IMF, it was noted that the IMF is in discussions with Uganda regarding the three-year financial arrangement to help continue the fight against the pandemic and build forward to more inclusive growth.
He mentioned that Uganda was one of the 86 countries which received assistance over the past year. In May 2020, the IMF agreed to lend Uganda $491.5 million, under the RCF (Rapid Credit Facility), to alleviate the economic fallout from the pandemic. This assistance was supposed to help finance the health, social protection and macroeconomic stability initiatives.
Uganda’s budget deficit in the current fiscal year ending June may come in 2 percentage points wider from the 7.2% registered in 2019-20, according to the IMF. Uganda appears to be muted on repayment of the $488.7 million loan it received from the International Monetary Fund (IMF) last year to offset the negative economic impacts of the coronavirus outbreak.
When asked about the progress of this proposed three year financial arrangement he said, “Discussions have progressed well with details yet to be ironed out on the potential magnitude of that financial assistance and on the authority’s reform program that would be the complement to any financial arrangement from the IMF”.
According to Rice, the IMF has had fairly intensive engagements with Uganda via their surveillance on economic policy issues even prior to the COVID crisis.
In Uganda, relevant stakeholders are confident that this three year plan shall be approved. Patrick Ocailap, Deputy Secretary to Uganda’s Treasury said in an interview that “Uganda’s economy has fulfilled loan preconditions and expects that IMF will approve the package”.
He added that negotiations are expected to conclude ahead of the 2021-22 budget presentation next month and that the exact final amount will depend on Uganda’s estimated balance of payments needs and the strength of policies the authorities commit to implement.