Press Release No. 04/171

Press Release: IMF Managing Director Rodrigo de Rato's Statement at the Conclusion of his Visit to Uganda August 5-6, 2004

August 6, 2004

Mr. Rodrigo de Rato, the Managing Director of the International Monetary Fund (IMF), made the following statement at the conclusion of his visit to Uganda:

"It has been a great pleasure to have had the opportunity to visit Uganda during my first trip to Africa as the Managing Director of the International Monetary Fund. I am grateful to President Museveni for the warm reception and for hosting an excellent meeting with leaders from the region, including President Kibaki of Kenya and President Mutharika of Malawi, who have shared with me their views on how the IMF can best contribute to economic progress and further strides in the fight against poverty in Africa.

"In addition, it was a pleasure to meet with members of Parliament, representatives of civil society and the business community, and children from Nakiwogo primary school in Entebbe. I fully share the dream of each of these groups—especially the children of Uganda—that important inroads will be made in the years ahead to improve the quality of life of the poor. Among my goals as the Managing Director of the IMF, I place very high priority on raising economic growth in Africa, particularly to attain the Millennium Development Goals that were unanimously adopted by members of the United Nations in September 2000.

"I am encouraged by the commitment of the leaders of the region to step up the efforts on the ground to increase economic growth and fight poverty. The strengthening global recovery will also benefit Africa: we anticipate economic growth in Sub-saharan Africa reaching close to 5 percent this year and somewhat higher in 2005. Fully seizing the opportunities of world economic growth requires persevering with efforts to integrate Africa further with the global economy. During my visit, I have discussed extensively with African leaders how economic policies in Africa can be geared toward achieving this goal.

"But there is no doubt that the advanced economies must also play their part, and the IMF will continue to remind them of their responsibility in two areas in particular: improved opportunities for African exports, and more, and better coordinated, official development assistance, primarily in the form of grants. Improving market access to the advanced economies, and dismantling trade-distorting subsidies in these markets, are on the table in the Doha Trade Round. This is a critical opportunity to make a significant advance in multilateral trade liberalization that will truly benefit the poorest countries. There is also a need to ensure adequate financing of development in Africa, notably in the context of efforts to reach the Millennium Development Goals, but also in connection with the fight against HIV/AIDS and malaria, the Education for All initiative, and for infrastructure development.

"I am impressed with Uganda's long track record of sound economic management and structural reforms that have resulted in macroeconomic stability and sustained high rates of economic growth. Uganda has pioneered the Poverty Reduction Strategy Paper (PRSP) process, with the development and implementation of a comprehensive framework that has contributed to a significant reduction in the incidence of poverty since the early 1990s. I look forward to the completion of the second revision of Uganda's Poverty Eradication Action Plan in the near future, which is expected to further enrich the country's comprehensive policy agenda for meeting its long-term goals for economic growth and poverty reduction.

"In my discussion with President Museveni and his economic team, we agreed that the main challenge facing Uganda is to sustain the poverty reduction effort by fostering strong economic growth. This will require:

• Higher rates of private investment;

• More effective use of public resources and donor support in programs to enhance productivity; and

• A strengthening and deepening of the financial sector, so that it effectively mobilizes the private savings needed for investment.

"We also agreed that government policies to support growth should focus on removing obstacles to business activity and effectively enforcing a governance framework that boosts the productivity of public services and is conducive to attracting investment.

"I have learned much from this visit to Uganda and my meetings with other leaders in the region. The IMF stands ready to assist Africa in achieving its objectives of rapid economic growth and social development."