Civil Society Organizations (CSOs) dealing with fiscal and monetary related issues have called upon Government to focus on using the 1.72 Trillion Uganda Shillings from International Monetary Fund (IMF) on only specified purposes.
On 23rd August 2021, Uganda received $346 Million from the IMF to assist the country in the fight against Covid19.
In a joint press briefing, the CSOs advised officials in Government not to even be tempted to use these funds for paying the country’s debt but to use it in procuring of covid19 vaccines and have all people immunized so that all sectors of the economy can open up.
Jane Nalunga the Executive Director SEATINI noted that the huge debt burden forced the Government to spend over 13.2 trillion shillings on debt repayments which greatly affected public expenditure on health care, social welfare and investment in the real economy.
“Priority on utilization of these new funds should be placed on procuring vaccines, critical medical and protective equipment, injecting more money into the real Economy, supporting micro business enterprises as well as providing adequate social welfare through programs like direct cash transfers.”
She also advised that the central bank should either keep these funds as reserves in the central bank, rely them to influence monetary policy to ensure macroeconomic stability or t exchange them into hard currencies like dollars, Pounds, Euros and then get them channelled to support finance Ministry budget support.
Ausi Kibowa, a financial expert at SEATINI advised the Government in the process of stabilizing the economy after being hit by covid19, to seek for credit relief from her creditors as other developing countries.
SDR issuance offers some form of debt relief to recipient countries especially the low income earners (LICs) as they can now use such resources to meet public spending needs having to acquire new loans.