The latest reports has been confirmed after IMF board that sat Monday, June 28.
“The Executive Board of the International Monetary Fund (IMF) acknowledged a 36-month arrangement under the Extended Credit Facility (ECF) for Uganda in an amount equivalent to SDR722 million (200 percent of quota or about US$1 billion) to support the post-COVID-19 recovery and the authorities’ plan to increase households’ incomes and inclusive growth by fostering private sector development,” read the statement.
The Ugandan economy is being severely hit by the COVID-19 pandemic and, in particular, such key sectors as services (tourism), transport, construction, manufacturing and agriculture. The challenging external environment is curtailing remittances and foreign direct investments.
The pandemic has also exacerbated the challenges posed by heavy rains in early 2020 and the ongoing locust invasion.
Approval of the ECF arrangement enables immediate disbursement of about US$258 million, usable for budget support. This follows Fund emergency support to Uganda under the Rapid Credit Facility (RCF) in May 2020 of SDR361 million (100 percent of quota or US$491.5 million, see Press Release No 20/206 ).
The funds will help Uganda recover from the pandemic that has reduced income and pushed 30 million across the continent into “extreme poverty.” Its fiscal deficit has also widened considerably, pushing the public debt to close to 50% of GDP by June 2021 and increasing financing costs.
The pandemic has reversed a decade-long improvement in poverty alleviation and opened fiscal and external financing gaps, Tao Zhang, the fund’s deputy managing director, said after the board discussion.
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