By Rogers Wanambwa
KIU, Main Campus – Uganda will receive a loan amounting to US$1 billion, approximately 3.5 trillion shillings in a space of three years, according to a statement from the International Monetary Fund (IMF).
In the statement issued on Tuesday, June 1st, the agreement was entered into in a virtual IMF visit led by the head of Africa Division Amine Mati in February, March and from May 25-May 28, 2021. It will be a three-year-long program under the Extended Credit Facility.
Essentially, Uganda will receive the loan in three installments, conceivably US$330 million per financial year.
Besides, the staff-level pact is subject to IMF management approval and Executive Board consideration, which is anticipated in the coming weeks, Mati explained in a statement.
“The IMF-supported program supports the next phase of the COVID-19 response and strengthens the fundamentals of a more inclusive private sector-led growth,” Mati said, adding that “As the pandemic eases, it envisages a return to revenue-based fiscal consolidation while increasing priority social spending, including on COVID-19 vaccines and to protect vulnerable households, and more efficient infrastructure investment.”
Mati advised that enhancing governance and budget transparency will be key to fostering public sector efficiency while preparing the ground for sound management of oil revenues.
It should be remembered that Uganda recently signed four agreements with Total, CNOOC and Tanzania geared at the actuality of oil production. Total CEO Patrick Jean Pouyanné said the first oil will be in 2025.
According to the IMF statement, the government is devoted to bolstering the fight against corruption and it will be publicizing procurement contracts.
“The authorities’ commitment to strengthen anti-corruption efforts is welcomed and encouraged. Further progress with publishing COVID-19 procurement contracts and providing information on the use of funds to mitigate the impact of COVID-19 is expected in the next few days, in line with the government’s commitments,” Mati said.
Managing public investment appropriately, reducing domestic arrears, as well as strengthening cash management, IMF said will be critical priorities for improving the business climate and attracting private investment.
This is the second loan that Uganda is taking from the IMF since the outbreak of the COVID-19 pandemic. Uganda last year borrowed US$491.5 million approximately UGX1.7 trillion under the Rapid Credit Facility, a programme that gives access to rapid and concessional financial assistance to low-income countries facing urgent balance of payments needs.