THE IMF is to provide $120 million to Uganda, marking a significant step in the country’s economic recovery efforts. This allocation comes following the fifth review of Uganda’s Extended Credit Facility (ECF) programme, part of a larger financial package that could potentially reach $1 billion from the multilateral lender.
This latest disbursement, the fourth under the ECF arrangement initiated in 2021, brings the total support received by Uganda to $870 million. It arrives approximately eight months after the previous disbursement of the same amount in June.
According to the IMF, these funds have played a crucial role in bolstering Uganda’s recovery from the economic downturn caused by the Covid-19 pandemic, as well as in mitigating inflationary pressures. However, despite the progress made, the IMF highlights several risks in the economic outlook that could threaten these gains. As a result, the organisation stresses the necessity for Uganda to persist with reforms and consolidation efforts.
In a statement issued following the disbursement early March, Bo Li, Deputy Managing Director of the IMF, remarked, ‘Uganda’s recovery is becoming more broad-based, supported by falling inflation and investments in the oil industry.’ The IMF estimates that Uganda’s economic growth will pick up pace, with a projected acceleration to 6 percent in the current financial year, followed by a further rise to 6.2 percent in the year beginning June. These figures signal a positive rebound from the economic slump experienced in 2020.
As Uganda strives to navigate its path to economic stability, the support from the IMF serves as a crucial lifeline, providing the necessary resources to fuel recovery efforts and safeguard against potential risks on the horizon.
