Uganda says negotiating with IMF for $900 million budget support loan

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Uganda has utilized to the International Monetary Fund (IMF) for a $900 million loan to assist bolster its shaky funds after the COVID-19 pandemic hammered its financial system, a prime finance ministry official stated on Wednesday.

“We have applied, negotiations are ongoing,” Deputy Treasury Secretary Patrick Ocailap instructed Reuters.

“We have not yet concluded negotiations on the loan but we hope it will be approved soon.”

The loan can be for common budget support and can be disbursed over three fiscal years, he stated. The nation’s subsequent fiscal yr begins in July.

Uganda imposed one in every of Africa’s tightest anti-coronavirus lockdowns, which included a shuttering of all companies besides probably the most important. Economic exercise subsequently nosedived, with GDP contracting by 1.1% final yr.

The IMF loaned Uganda $491.5 million {dollars} final yr, one in every of a number of loans the nation secured from numerous sources to assist soak up the financial blow of COVID-19.

A brand new loan will doubtlessly add to rising worries about Uganda’s potential to service its ballooning debt, seen surpassing 50% of GDP by June.

Last month the east African nation stated it could strategy its main collectors to barter a attainable suspension of loan repayments after its debt load ballooned by 35% in a single yr. As of December 2020 Uganda’s whole public debt stood at $18 billion, two-thirds of which is held by exterior collectors, in accordance with the finance ministry.

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