The International Monitory Fund (IMF) approved $491.5 million to help Uganda in the fight against Coronavirus pandemic.
The International Monitory Fund (IMF) Executive Board has approved US$491.5 Million as an aid to Uganda to help in the fight against the coronavirus pandemic.
Following the outbreak of COVID-19 in Uganda, the government imposed drastic measures such as the lockdown and suspension of both private and public means of transport to help control the spread of the virus.
This has since had an effect on many sectors of the economy including tourism and transportation with many other businesses also left on a standstill.
As a result, in recent weeks has hindered the economic growth rate in the county. The finance minister, Matia Kasaija recently while addressing Parliament said that Uganda’s growth rate had dropped to between 5.2% and 5.7% from 6%.
Minister Kasaija also raised fears that over 780,000 Ugandans might suffer from deep poverty as an effect of the post coronavirus era.
In the wake of worries, the IMF has aided Uganda with US$491.5 million amounting to about shs.1.9 trillion shillings to support Uganda from the effects that might arise from COVID-19.
According to the IMF Executive Board, this is aimed to help finance the health, social protection and macroeconomic stabilization measures, meet the urgent balance-of-payments and fiscal needs arising from the COVID-19 outbreak and catalyze additional support from the international community.
“The IMF’s emergency financial support under the Rapid Credit Facility, along with the additional donor financing it is expected to help catalyze, will help address Uganda’s urgent balance of payments and budget support needs,” a statement from IMF read.
The IMF Managing Director and Acting Chairman, Mr Tao Zhang, raised worries that the global pandemic is expected to severely hit Uganda’s economy because the country in recent weeks has had to divert more money that would have used relatively on other sectors to cater more on the health of its locals.
This has caused an imbalance in terms of money distribution thus leaving several sectors lagging with more advancement done in strengthening the health system’s capacity of the country.
“The global COVID-19 pandemic is expected to severely hit the Ugandan economy through several channels, with detrimental effects on economic activity and social indicators. The external and fiscal accounts are expected to deteriorate, creating substantial urgent external and fiscal financing need,” Tao said.
“To limit the pandemic’s human and economic impact, the authorities have promptly adopted bold preventive measures to contain the spread of the virus and scaled up health spending to strengthen the health system’s capacity. Interventions to support the more vulnerable have also been introduced. Also, the Bank of Uganda has swiftly introduced policy measures to support liquidity, preserve financial stability and support economic activity. The authorities are encouraged to continue to step up social protection programs to cushion the impact on the vulnerable population and to protect health spending allocations over the medium term.”