HomeBUSINESSMinister Kasaija Defends Government Decision on IMF Loan.

Minister Kasaija Defends Government Decision on IMF Loan.

By Jimmy Muhumuza 

Parliament  

The Minister of Finance, Matia Kasaija has defended the decision by Government to request the International Monetary Fund (IMF) for a loan to a tune of Shs3.5Trn, saying Uganda’s economy has declined following the outbreak of the Covid-19 pandemic.

In a statement issued today, Kasaija confirmed that Government had negotiated a three-year Financing and Economic Programme with the IMF to support the country in its monetary, economic, and fiscal policies and programs so that we build and maintain a strong economy.

Kasaija says that the loan from IMF came in a time when Uganda’s economy has been affected by external and domestic shocks including the outbreak of the COVID-19 pandemic, and as result, economic growth declined from 6.8% in 2018/2019 to 3.0% in 2019/2020.

He says that 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 COVID-19 which has led to the second lockdown. 

He says The measures introduced by the world and our government to contain the spread of the pandemic like restriction on travel resulted in low economic activity. This has affected three sectors, service, industry, and Agriculture. Consequently, this has affected household income.

It should be recalled that on Monday, the International Monetary Fund (IMF) approved a 36-month loan arrangement under the Extended Credit Facility (ECF) for Uganda to a tune of US$1Billion equivalent to Shs3.553Trn to support the post-COVID-19 recovery.

Kasaija has also defended the skyrocketing public debt, saying Uganda’s economy has declined, leaving the Government with no choice other than request IMF for assistance to support Uganda’s emergency response to the Covid pandemic as well as support economic recovery in the short, medium, and long term.

Kasaija even “threatened” to discipline accounting officers who fail to utilize the loan appropriately noting, “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 officers who fail to provide accountability or execute timely Government projects.

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