{
  "title": "Frequently Asked Questions on Uganda",
  "sourceUrl": "https://www.imf.org/en/countries/uga/uganda-qandas",
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  "summary": "Frequently Asked Questions on Uganda",
  "sections": [
    {
      "heading": "The IMF Extended Credit Facility (ECF) for Uganda",
      "content": "- The ECF provides financial assistance to countries facing protracted balance of payments difficulties, with the aim of restoring macroeconomic stability and reducing poverty through strong growth.\n- Key ECF terms and timing:\n  - Zero-interest rate.\n  - Grace period of 5½ years.\n  - Final maturity of 10 years.\n- Program size and disbursement:\n  - About $1 billion will be disbursed under Uganda’s ECF-supported program, in semi-annual tranches over three years.\n  - Disbursements are subject to review, scheduled, at most, six months apart.\n  - The first tranche of $258 million was disbursed when the program was approved by the IMF Executive Board on June 28, 2021.\n  - On March 9, 2022, the IMF Executive Board completed the first review of the ECF arrangement with Uganda, allowing an immediate disbursement of around $128 million to cover budget needs."
    },
    {
      "heading": "Program objectives and policy framework",
      "content": "- Central objective: support recovery from the COVID-19 pandemic while generating strong and inclusive private sector-led growth.\n- Fiscal strategy:\n  - Reduce the budget deficit and debt over time (as the COVID-19 shock eases) through lower non-priority spending, the phase-out of crisis measures, and higher government revenue.\n  - Greater public sector efficiency to ensure increased spending on social programs, including on health, education, and social assistance.\n- Structural and institutional priorities:\n  - Strengthen revenue mobilization (including identification of tax exemptions).\n  - Strengthen governance (improved accountability for public officials).\n  - Upgrade public investment management framework and strengthen cash and arrears management.\n  - Improve transparency in public accounts, strengthen anticorruption framework, and increase financial sector resilience.\n- Program flexibility:\n  - The ECF-supported program has built-in flexibility, allowing targets to be modified—notably reserve and fiscal objectives—at the time of semi-annual reviews."
    },
    {
      "heading": "Recent performance and reforms implemented",
      "content": "- Macroeconomic stability:\n  - The authorities were able to maintain macroeconomic stability, supported by IMF financing and by non-resident inflows and syndicated loans.\n  - Financing helped preserve priority social spending and increase COVID-19-related spending despite revenue shortfalls after the June-July 2021 lockdown.\n  - Inflation remained low and external reserve buffers remained strong.\n- Fiscal and debt containment:\n  - Reduced financing needs helped contain the rise in debt and keep it sustainable.\n- Structural reforms and governance measures implemented over the past six months:\n  - Tracking of COVID-19 expenditures and publication of audits of COVID-19 spending.\n  - Ongoing disclosure of beneficial ownership information for COVID-19 procurement contracts.\n  - Adoption of a regulation requiring financial institutions to identify and apply enhanced due diligence measures for domestic politically exposed persons, in line with Financial Action Task Force recommendations.\n  - Measures to strengthen accountability of high-level officials, including through asset declarations.\n  - Acceleration of Anti-Money Laundering/Combating the Financing of Terrorism implementation and enforcement of legal anti-corruption frameworks.\n- COVID-19 audit findings and use of funds:\n  - Recently published COVID-19 audits suggest that resources ring-fenced in the FY20/21 budget for COVID-19 interventions were mostly used for their intended purposes.\n  - Part of the allocation was used to settle domestic arrears, boosting liquidity.\n  - Remaining amounts were used to support international reserves, recapitalize Uganda’s Development Bank (UDB), and support procurement of vaccines and medical supplies, among others."
    },
    {
      "heading": "Social and spending safeguards",
      "content": "- The program includes two quantitative targets that require minimum spending on:\n  - (i) education and health; and\n  - (ii) social protection.\n- Both quantitative spending targets were met in September 2021.\n- Shifting spending composition toward priority social areas is intended to address Uganda’s development needs while achieving fiscal objectives."
    },
    {
      "heading": "Debt sustainability, reserves, and financing strategy",
      "content": "- Debt outlook:\n  - Given plans to unwind crisis measures and raise revenue levels, Uganda’s debt remains sustainable despite the recent increase in the debt stock stemming from the effects of the COVID-19 pandemic.\n  - Lower fiscal deficits financed through higher domestic revenue and lower non-priority spending would help reduce high borrowing costs and ensure debt remains sustainable.\n  - More contained government domestic borrowing would create space for private sector development.\n- External buffers and risks:\n  - To reduce vulnerability to shocks, Uganda is building external reserves and strengthening social assistance programs.\n  - An increase in international energy and food prices will push up headline inflation and pose hardships on households.\n  - Tighter financial conditions could increase borrowing costs and lead to a reversal of capital flows, putting pressure on the exchange rate."
    },
    {
      "heading": "Use of SDR allocation and budget financing",
      "content": "- The SDR allocation aims to address global long-term needs for reserves, helping countries cope with the impact of the COVID-19 crisis.\n- The Ugandan authorities decided to use half of the allocation (about $250 million) to finance the FY21/22 budget deficit.\n  - The SDR allocation will replace more expensive foreign commercial borrowing of the same amount.\n  - It will be used on education, health and water and sanitation projects, including financing the reopening of schools.\n- Oversight and safeguards:\n  - The Ministry of Finance has a spending plan for SDRs, which will be monitored through special quarterly reports on budget execution.\n  - Implementation of governance reforms under the ECF-supported program will help safeguard the use of SDRs."
    }
  ],
  "bullets": [
    "The ECF provides financial assistance to countries facing protracted balance of payments difficulties, with the aim of restoring macroeconomic stability and reducing poverty through strong growth.",
    "Key ECF terms and timing:",
    "Program size and disbursement:",
    "Central objective: support recovery from the COVID-19 pandemic while generating strong and inclusive private sector-led growth.",
    "Fiscal strategy:",
    "Structural and institutional priorities:",
    "Program flexibility:",
    "Macroeconomic stability:",
    "Fiscal and debt containment:",
    "Structural reforms and governance measures implemented over the past six months:",
    "COVID-19 audit findings and use of funds:",
    "The program includes two quantitative targets that require minimum spending on:",
    "Both quantitative spending targets were met in September 2021.",
    "Shifting spending composition toward priority social areas is intended to address Uganda’s development needs while achieving fiscal objectives.",
    "Debt outlook:",
    "External buffers and risks:",
    "The SDR allocation aims to address global long-term needs for reserves, helping countries cope with the impact of the COVID-19 crisis.",
    "The Ugandan authorities decided to use half of the allocation (about $250 million) to finance the FY21/22 budget deficit.",
    "Oversight and safeguards:"
  ],
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  "generatedAtUtc": "2026-09-30T19:34:18.770Z"
}