Uganda and IMF reach $240 million agreement in financing

Uganda and the International Monetary Fund have reached an agreement for 240 million US dollars in financing.

The IMF staff made the announcement Wednesday (Dec. 21). The deal on economic policies concludes the 2nd & 3rd reviews under the Extended Credit Facility arrangement or ECF.

The Extended Credit Facility (ECF) provides financial assistance to countries with protracted balance of payments problems.

This scheme provides financial assistance to countries with protracted balance of payments problems. It’s the Fund’s main tool for providing medium-term support to low income countries.

Uganda will access the funding in the coming weeks, once the review is formally completed by the IMF executive board.

The funds will bring the total IMF financial support under the ECF-financed program to about US$ 625 million.

The economic recovery is underway according to the fund. Growth in the fiscal year 2022/23 (July-June) was projected at 5.3%, 0.7 percentage point lower than at the time of the first review in March.

According to the international body, this reflects weaker global demand and the impact of rising inflation and interest rates on domestic demand.

The announcement came after the IMF team led the head of the World Economic Studies division in the IMF's Research Department conducted a virtual mission to Uganda from October 31 - November 22, 2022 to discuss progress on reforms and the authorities’ policy priorities.