Government has Wednesday opened up on how it plans to spend the $1Billion loan recently received from the International Monetary Fund.
Minister of Finance Hon Matia Kasaija in a statement highlighted the different sectors that will benefit from the credit facility and also cautioned government officials against misusing the money.
The credit which is about Shs 3.6 Trillion was approved on Monday this week by the IMF and is meant to support the post-COVID-19 recovery and the Uganda’s plan to increase households’ incomes and inclusive growth by fostering private sector development.
Minister Kasaija in the statement said the three-year loan was timely “when our economy was affected by external and domestic shocks including the outbreak of COVID-19 pandemic.”
“Due to these shocks, economic growth declined from the 6.8% in Financial Year 2018/2019 to 3.0% in Financial Year 2019/2020. Despite these shocks, the economy was on the path to recovery although this may slow down due to the impact of the second wave of the COVID-19 pandemic that has led to a second lockdown.”
He said government plans to use this money primarily to boost household income.
“These funds will support Uganda to deal with the COVID-19 pandemic and our strategy of inclusive growth, employment and Wealth Creation as stipulated in the NDPIII,” Kasaija said.
“The approval of the ECF arrangement enables the immediate disbursement of about USD 258 million, usable for budget support. This follows the IMF emergency support to Uganda under the Rapid Credit Facility (RCF) in May 2020 of SDR 361 million (equivalent to USD 491.5 million).”
In the first year, the minister said government will focus on ensuring debt sustainability while increasing social spending, including for vaccines.
“The program will also ensure the implementation of the Domestic Revenue Mobilization Strategy (DRMS), better management of public investment, control of domestic arrears as well as improving budget execution.”
Kasaija on the other hand asked government accounting officers to ensure proper accountability of the money.
“I urge all Accounting Officers of Government to utilize all public funds at their disposal efficiently and transparently to drive growth and provide services to the people of Uganda. I will not hesitate to institute disciplinary measures on any Accounting Officer who fails to provide accountability or execute timely Government projects and programs,” he said.