An IMF team led by Axel Schimmelpfennig visited Uganda from October 23 to
November 3, 2017, to initiate discussions for a macroeconomic program under
the Policy Coordination Instrument (PCI).
At the end of the visit, Mr. Schimmelpfennig issued the following
statement:
“The team had productive discussions and progress was made on developing
the pillars of a three-year economic program. The team will continue the
dialogue in the coming months to define targets for the next fiscal year
and identify specific measures to achieve them.
“Growth is projected to reach 5 percent in 2017/18 from 4 percent in
2016/17, supported by better weather conditions, while private sector
credit remains muted. Inflation was 4.8 percent year-on-year in October.
Bank of Uganda has appropriately continued its easing cycle in October,
with core inflation projected to remain in line with the 5 percent target.
The team notes with concern the increase in the poverty headcount ratio to
27 percent of the population in the 2016/17 UBOS Household Survey.
“Implementation of the FY17/18 budget is challenging. Parliament did not
approve some of the government’s revenue enhancing measures, while
additional expenditure pressures have given rise to a supplementary budget.
This widens the overall fiscal deficit and increases the government’s
financing needs. The team advised the authorities to explore alternative
revenue measures and contain expenditure pressures, while protecting social
spending.
“In establishing the FY18/19 fiscal targets, the team encouraged the
authorities to continue the strategy of increasing revenue collection by at
least 0.5% percent of GDP per year. The team also underlined the importance
of targeting a deficit that maintains debt sustainability and is consistent
with available domestic financing. The team welcomed the authorities’
ongoing work to identify policy implications from the Household Survey and
the stock-taking exercise of the infrastructure investment pipeline which
will lead to better prioritized development spending.
“The IMF team met with Minister Kasaija, Governor Tumusiime-Mutebile, State
Minister of Finance for Planning Bahati, State Minister of Finance General
Duties Ajedra, Permanent Secretary and Secretary of the Treasury
Muhakanizi, Deputy Governor Kasekende, Commissioner General Akol, and other
senior government officials, representatives of civil society, the private
sector, and development partners.
“The team thanks the authorities for the open and constructive dialogue.”
