IMF Board approves Shs800b credit facility for Uganda

The International Monetary Fund (IMF) is set to disburse a loan worth $240 million (about Shs880b) to Uganda after its Executive Board on Tuesday completed the combined second and third reviews under the Extended Credit Facility (ECF).

The facility is part of the $1b (about 3.547 trillion) that IMF extended to Uganda in 2021 under the Extended Credit Facility programme.

In a statement issued on Tuesday, the IMF Board said it was pleased that Uganda is implementing several  structural reforms to promote economic growth.

“The Ugandan authorities remain committed to their economic program amidst a challenging environment. Most quantitative targets were met in 2022. Six of the twelve structural benchmarks due between March and December 2022 have been completed,” IMF said.

“A structural benchmark on the asset declaration regime was converted into a prior action for the review and has been met. Sound program implementation in the period ahead remains important to ensure economic resilience and support the country’s social and developmental objectives,” it added.

According to IMF, returning to the programmed fiscal consolidation path and reserve cover remains essential to keep debt sustainable and maintain external buffers. “Enhanced domestic revenue mobilization, including via the elimination of inefficient tax exemptions, rationalization of non-priority spending, and shifting the composition of spending towards priority social areas will help achieve the fiscal objectives and address large development needs. The introduction of the Parish Development Model was a welcome development,” IMF said.

In a meeting last month, IMF said its staff and the Uganda authorities had reached a staff-level agreement on economic policies to conclude the combined second and third reviews of the 36-month ECF-financed program.

The money is a huge relief to Uganda which is heavily indebted and struggling to finance its budget.

 According to Bank of Uganda Monetary Policy report for December, Uganda’s public debt stood at Shs78.89 trillion, as of June 2022, of which Shs48.21 trillion is external debt, and Shs30.661 trillion is domestic debt.