The Independent Uganda: You get the Truth we Pay the Price
Kampala, Uganda | THE INDEPENDENT | The International Monetary Fund on Wednesday approved USD 491.5 million (1.9 trillion Shillings) in emergency funding for Uganda to address the impact left by the coronavirus on the economy.
The money is approved under the Rapid Credit Facility program that is meant to help poor countries pick up pieces after being battered by the virus. The disbursement is 100 per cent of Uganda’s quota. IMF, the international lender of last resort, says the money will help Uganda fund health, social protection and macroeconomic stabilization measures.
Uganda has so far confirmed 100 cases of COVID-19. But the outbreak of the virus has seen Uganda close its borders, told businesses to shut and let employees stay home to stem the spread. This means the business has come to standstill and the country is unable to collect enough taxes to fund its budget.
Consequently, the country has been looking for funds to tackle shortfall – expected to be in the highs of Shs 3trillion, according to official estimates. The IMF cash will cover the gap left by shortfalls in tax collection due to the pandemic.
“The weakening economic conditions emanating from the Covid-19 pandemic have put significant pressures on revenue collection, expenditure, reserves and the exchange rate, creating urgent large external and fiscal financing needs,” the lender said in a statement.
Tao Zhang, the IMF Deputy Managing Director the money will support Uganda’s urgent “budget needs”.
Increased spending, with the government, recently approving a supplementary budget of close to 1 trillion Shillings to spend during the pandemic means the country must aside some of the budgeted priorities. This will adversely affect growth.
However, with part of this money – at least 10 billion Shillings advanced to MPs under unclear circumstances – puts serious questions on Uganda’s spending during this period. There is a likelihood that as a country spends heavily in the guise of curtailing pandemic, corruption also lurks around.
Uganda’s economy is expected to grow at 3per cent this year, a huge cut from the pre-pandemic projection of above 6 per cent. Businesses that have been adversely affected need government support to get back to normal workings.
Neighbours Kenya (USD739) and Rwanda (USD109.4) have also received money under the Rapid Credit Facility program.
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