The International Monetary Fund (IMF) has announced approval of a loan of approximately $ 1 billion to Uganda. Objective, support the post-Covid-19 recovery and increase household income for inclusive growth.
According to the international organization, the Ugandan economy has been severely affected by the health crisis. The results obtained in ten years of struggle for poverty reduction have been canceled, indeed indicates the IMF, which also notes that the budgetary balances deteriorated, then the pressures on the external reserves intensified.
However, notes the institution, a slight recovery is underway in some sectors, and economic growth is expected at 4.3% in fiscal year 21/22. “The outlook remains very uncertain, with downside risks, in particular due to a resurgence of stricter containment measures linked to higher Covid-19 positivity rates”, adds the IMF which already had, in May 2020, approved emergency aid of $ 491.5 million for Uganda.
When the preliminary agreement to obtain the new loan was announced on Tuesday, June 1, the Fund indicated that Uganda’s budget deficit had widened considerably, pushing public debt to nearly 50%. of GDP by June 2021 (compared to an estimate of 45% of GDP in 2020). And the country has made no secret of its intentions to enter into negotiations with its creditors to obtain the suspension of the service of its external debt.