Last evening, the International Monetary Fund (IMF) Executive Board approved a loan of $491.5 million (about Shs1.9 trillion) to Uganda to help the country address the economic impact of COVID-19.
This comes only days after Bank of Uganda released the Monetary Policy Report of April 2020 that showed how the Ugandan economy has been hit hard by the effects of the coronavirus (COVID-19) pandemic, worsening our external position, with sectors such as tourism and transport brought to a standstill, but other forms of trade like imports and exports hugely affected and experiencing low activity, and it went further to forecast an increase in prices of commodities and closure of small businesses.
The IMF loan is provided under the Rapid Credit Facility (RCF), which is a rapid, and concessional financial assistance to Low-Income Countries facing an urgent balance of payments need. Financial assistance under the RCF is provided as an outright loan disbursement.
IMF says that the loan will help finance the health, social protection and macroeconomic stabilization measures, meet the urgent balance-of-payments and fiscal needs arising from the COVID-19 outbreak and catalyze additional support from the international community.
As Ugandans are sceptical about accountability and management of public funds by government officials, the IMF Deputy Managing Director and Acting Chair Tao Zhang said in a statement that, “The authorities are committed to managing transparently the resources received and will strengthen transparency and accountability. They plan to report separately on the use of the funds, undertake and publish an independent audit of crisis mitigation spending and publish large procurement contracts.”
IMF will continue to monitor Uganda’s situation closely and stand ready to provide policy advice and further support as needed.