The International Monetary Fund, IMF has approved an emergency loan worth $491.5 million to help cushion the economic impact of coronavirus in Uganda.
Key sectors of the East African economy such as tourism have taken a heavy blow from the crisis.
“The weakening economic conditions emanating from the Covid-19 pandemic have put significant pressures on revenue collection, expenditure, reserves and the exchange rate, creating urgent large external and fiscal financing needs,”
“The IMF’s emergency financial support under the Rapid Credit Facility, along with the additional donor financing it is expected to help catalyse, will help address Uganda’s urgent balance of payments and budget support needs,” the IMF stated.
The country’s Ministry of Finance projects the foreign exchange reserves will decline to the equivalent of 3.5 months’ worth of imports from 4.2 months’ worth as exports slump due to the global pandemic.
According to the fund, countries receiving loans extended under the IMF’s Rapid Credit Facility pay no interest and have 10 years to return the money.
Meanwhile, Uganda’s central bank expects economic growth to fall to 3%-4% for the financial year to June from its previous projection of 5.5%-6%, as COVID-19 slashes activity in manufacturing, entertainment and trade.
Source: Voice of Nigeria