By Francis Lubega
18th Jan 2023
The International Monetary Fund, IMF, has approved the immediate disbursement of 240 million US dollars, approximately 886 billion Shillings under the Extended Credit Facility (ECF) arrangement.
This follows the approval of the combined second and third reviews of Uganda’s performance under the arrangement, bringing the total agreed disbursement to 625 million dollars which is approximately 2.307 trillion Shillings.
The ECF is a relief arrangement by the IMF for member countries with widespread or prolonged balance of payments problems, especially following the impact of the Covid-19 pandemic on low-income and developing economies.
In December last year, the IMF staff mission to Uganda said they had reached an agreement with the government authorities on a conclusion of the reviews but that the final decision on the release of the tranche depended on the approval of the board.
A total of about 1 billion dollars, approximately about 3.7 trillion shillings of the ECF arrangement for Uganda was approved by the Executive Board on June 28, 2021, aiming to support the near-term response to the COVID-19 pandemic and boost more inclusive private sector-led long-term growth.
It comes with conditions for the country to make some specified financial management reforms.
Reforms focus on creating fiscal space for priority social spending, preserving debt sustainability, strengthening governance, and enhancing the monetary and financial sector frameworks.
The Deputy Managing Director at IMF, Bo Li says the Ugandan authorities have managed to preserve macroeconomic stability with a projected growth of 5.3 percent in the financial year 2022/2023, while sustaining the post-COVID-19 recovery despite rising pressure from global shocks and successive domestic shocks, including new public health challenges.
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