{
  "title": "IMF and Uganda Reach Staff-Level Agreement on the Combined Second and Third Reviews under the Extended Credit Facility Arrangement",
  "publication": "IMF News, December 21, 2022",
  "sourceUrl": "https://www.imf.org/en/news/articles/2022/12/20/pr22453-uganda-reach-staff-level-agreement-combined-second-third-reviews-under-ecf-arrangement",
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  "summary": "IMF and Uganda Reach Staff-Level Agreement on the Combined Second and Third Reviews under the Extended Credit Facility Arrangement",
  "publishDate": "2022-12-21",
  "sections": [
    {
      "heading": "Overview and key agreement terms",
      "content": "- IMF staff and the Uganda authorities reached a staff-level agreement to conclude the combined second and third reviews of the 36-month ECF-financed program.\n- Upon completion of the Executive Board review, Uganda would have access to SDR 180.5 million, about US$240 million.\n- Total IMF financial support under the ECF-financed program would reach SDR 451.25 million (equivalent to about US$ 625 million).\n- The ECF was approved by the IMF Executive Board on June 28, 2021 for a total amount of SDR 722 million (about US$ 1 billion at the time of program approval)."
    },
    {
      "heading": "Economic outlook and risks",
      "content": "- Growth projections:\n  - Growth is projected at 5.3 percent in FY22/23, 0.7 percentage point lower than at the time of the first review in March.\n  - Medium-term prospects are expected to improve with oil production coming on board by FY24/25.\n- Inflation expectations:\n  - Headline inflation is expected to rise to 8.3 percent this fiscal year and is anticipated to decline thereafter.\n  - Core inflation and headline inflation trajectories reflect elevated commodity prices, higher imported input costs, and monetary tightening.\n- External and other risks:\n  - Elevated risks include lower global growth, persistently higher inflation in advanced economies and associated tighter global financial conditions; an intensification of the Ebola outbreak; and more frequent disruptions in activity due to climate change.\n  - The economic recovery is underway despite global demand and supply-chain shocks affecting inflation, growth, revenues, and spending needs."
    },
    {
      "heading": "Policy actions and recommendations",
      "content": "- Monetary policy:\n  - The Bank of Uganda (BoU) has tightened the policy rate in recent months and signaled readiness to take appropriate action to contain second-round effects of higher global prices.\n  - Continued tightening is recommended to guide core inflation back to the target.\n  - Continued exchange rate flexibility is recommended as an important shock absorber to help rebuild external buffers.\n- Fiscal policy and revenue mobilization:\n  - Revenue-based fiscal consolidation enshrined in the authorities’ Domestic Revenue Mobilization Strategy is crucial for keeping debt sustainable and funding Sustainable Development Goals.\n  - Authorities adopted a plan to rationalize inefficient and costly tax expenditures.\n  - Expenditure prioritization will continue; a small widening of the fiscal deficit this year, relative to the target set in the first review, is necessary to support the vulnerable while remaining focused on fiscal consolidation.\n- Financial sector and safeguards:\n  - The BoU is improving its supervisory framework; implementation of the Safeguards Assessment recommendations will help solidify independence.\n  - A new risk management framework will address governance and contain risks.\n  - The banking sector is characterized as well-capitalized, but existing vulnerabilities require continued monitoring and strengthening of financial stability."
    },
    {
      "heading": "Structural reforms and governance",
      "content": "- Priority structural reforms include:\n  - Strengthening the anti-corruption framework and the AML/CFT regime.\n  - Improving the social safety net.\n  - Advancing the financial inclusion agenda.\n  - Adapting to climate change.\n- Recent anticorruption and transparency steps:\n  - The Companies Act was amended to prepare for implementation of a beneficial ownership register.\n  - Tools for AML/CFT risk-based supervision for the financial sector are being developed and implemented.\n  - Authorities published information on compliance statistics for asset declarations and on applications to access the declarations on the Inspectorate of Government’s website."
    },
    {
      "heading": "Engagement and mission details",
      "content": "- Mission led by Mr. Malhar Nabar conducted a virtual mission to Uganda from October 31 - November 22, 2022; the concluding meeting was held on December 19, 2022.\n- The staff team met with the Permanent Secretary and Secretary to the Treasury, Mr. Ggoobi; Deputy Governor of the BoU, Mr. Atingi-Ego; other BoU and senior government officials; and representatives of the private sector, civil society organizations, and development partners."
    },
    {
      "heading": "Selected Economic Indicators, FY2020/21-FY2023/24",
      "content": "- Output\n  - Real GDP Growth (%): FY2020/21: 3.5; FY2021/22: 4.7; FY2022/23: 5.3; FY2023/24: 6.0\n- Prices\n  - Headline Inflation - average (%): FY2020/21: 2.5; FY2021/22: 3.4; FY2022/23: 8.3; FY2023/24: 7.2\n  - Core Inflation - average (%): FY2020/21: 3.2; FY2021/22: 7.5; FY2022/23: 6.8\n- Central Government Finances\n  - Revenue and Grants (% of GDP): FY2020/21: 14.3; FY2021/22: 14.1; FY2022/23: 15.1; FY2023/24: 15.5\n  - Expenditure (% of GDP): FY2020/21: 23.7; FY2021/22: 21.5; FY2022/23: 20.2; FY2023/24: 19.0\n  - Primary Balance (% of GDP): FY2020/21: -6.7; FY2021/22: -4.3; FY2022/23: -1.8; FY2023/24: -0.3\n  - Fiscal Balance (% of GDP): FY2020/21: -9.4; FY2021/22: -7.4; FY2022/23: -5.1; FY2023/24: -3.5\n  - Public Debt (% of GDP): FY2020/21: 49.0; FY2021/22: 50.6; FY2022/23: 50.9; FY2023/24: 49.6\n- Money and Credit\n  - Broad money (% change): FY2020/21: 8.5; FY2021/22: 10.0; FY2022/23: 14.5; FY2023/24: 12.6\n  - Credit to Private Sector (% change): FY2020/21: 11.0; FY2021/22: 12.8\n  - Policy Rate, EOP (%): FY2020/21: 6.5\n- Balance of Payment\n  - Current Account Balance (% of GDP): FY2020/21: -9.5; FY2021/22: -7.9; FY2022/23: -9.2; FY2023/24: -10.7\n- Reserves\n  - (in months of next year's imports): FY2020/21: 4.9; FY2021/22: 3.7; FY2022/23: 3.0; FY2023/24: 3.1\n- External Public Debt (% of GDP): FY2020/21: 31.6; FY2021/22: 31.3; FY2022/23: 31.9; FY2023/24: 32.4\n- Exchange Rate\n  - REER (% change): FY2020/21: 0.6\n\nPress Release No. 22/453, December 21, 2022 — IMF Communications Department.\n\n---\n\n\n References\n\n- Uganda and the IMF\n- Press Releases\n- PRESS CENTER\n- Extended Credit Facility\n- IMF Executive Board on June 28, 2021\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2022/12/20/pr22453-uganda-reach-staff-level-agreement-combined-second-third-reviews-under-ecf-arrangement"
    }
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    "Published: December 21, 2022",
    "IMF staff and the Uganda authorities reached a staff-level agreement to conclude the combined second and third reviews of the 36-month ECF-financed program.",
    "Upon completion of the Executive Board review, Uganda would have access to SDR 180.5 million, about US$240 million.",
    "Total IMF financial support under the ECF-financed program would reach SDR 451.25 million (equivalent to about US$ 625 million).",
    "The ECF was approved by the IMF Executive Board on June 28, 2021 for a total amount of SDR 722 million (about US$ 1 billion at the time of program approval).",
    "Growth projections:",
    "Inflation expectations:",
    "External and other risks:",
    "Monetary policy:",
    "Fiscal policy and revenue mobilization:",
    "Financial sector and safeguards:",
    "Priority structural reforms include:",
    "Recent anticorruption and transparency steps:",
    "Mission led by Mr. Malhar Nabar conducted a virtual mission to Uganda from October 31 - November 22, 2022; the concluding meeting was held on December 19, 2022.",
    "The staff team met with the Permanent Secretary and Secretary to the Treasury, Mr. Ggoobi; Deputy Governor of the BoU, Mr. Atingi-Ego; other BoU and senior government officials; and representatives of the private sector, civil society organizations, and development partners.",
    "Output",
    "Prices",
    "Central Government Finances",
    "Money and Credit",
    "Balance of Payment",
    "Reserves",
    "External Public Debt (% of GDP): FY2020/21: 31.6; FY2021/22: 31.3; FY2022/23: 31.9; FY2023/24: 32.4",
    "Exchange Rate",
    "[Uganda and the IMF](http://www.imf.org/external/country/UGA/index.htm)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[Extended Credit Facility](https://www.imf.org/en/About/Factsheets/Sheets/2016/08/02/21/04/Extended-Credit-Facility)",
    "[IMF Executive Board on June 28, 2021](https://www.imf.org/en/News/Articles/2021/06/28/pr21197-uganda-imf-executive-board-approves-ecf-arrangement-for-uganda)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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