The Executive Board of the International Monetary Fund (IMF) has approved a 36-month arrangement under the Extended Credit Facility (ECF) of $1 billion about Shs 3.55 trillion to Uganda.
A statement from the fund notes that the loan will support Uganda’s post-COVID-19 recovery and plans to increase households’ incomes and inclusive growth by fostering private sector development.
This comes a few months after the Auditor General warned that the country’s national debt had escalated and is becoming unsustainable.
This Approval enables immediate disbursement of about $258 million, usable for budget support.
The fund in May last year under the Rapid Credit facility gave Uganda shs491. 5 million as emergency support.
Uganda’s economy has been hit hard by the COVID-19 crisis.
A mild recovery is underway in some sectors, with economic growth in FY 21/22 expected to reach 4.3% before returning to pre-pandemic rates of 6-7% in the medium term.
The outlook however remains highly uncertain, with risks tilted to the downside, including from a resurgence of tighter containment measures linked to higher COVID-19 positivity rates.