COVID: IMF Approves sh3.6 Trillion Loan For Uganda

By Correspondent 

The International Monetary Fund (IMF) has approved a 36-month arrangement under the Extended Credit Facility (ECF) for Uganda. The amount is equivalent to US$1 billion (sh3.6 trillion) to support the post-COVID-19 recovery and the authorities’ plan to increase households’ incomes.

According to reports by  Public Finance and Government Expenditure, the Covid-19 pandemic has resulted in government expenditure far exceeding budgeted sums. In Uganda, supplementary budgets have become larger and more frequent.

The additional funds cannot always be justified, with multiple agencies seeking a share and evidence of doubling up across sectors. The supplementary budgets may also evidence the improper allocation and apparent misuse of public resources.

In Uganda, security seems to have been prioritized over health, for example. The Ugandan government’s Covid-19 budget of March 2020 is presented here to demonstrate the problem.

In the Republic of Uganda, Article 156 of the Constitution and Section 25 of the Public Finance Management Act allow supplementary budget estimates to be put before Parliament. Here it is determined whether or not a need has arisen for expenditure not previously budgeted for or for expenditure that exceeds the budgeted sums. Supplementary expenditure must be ‘unabsorbable, unavoidable, and unforeseeable.’

In March alone, the Government of Uganda presented four supplementary budgets before Parliament. Their frequency and size have not gone unnoticed. Members of Parliament (MPs) have noted that the situation undermines the planning and budgeting process.