Uganda’s $491m coronavirus loan approved by IMF

The International Monetary Fund (IMF) has approved a loan of $491m (£399) to Uganda, to help the country’s economy cope with the cost of containing the coronavirus pandemic.

The international lending institution said weakening economic conditions from the impact of Covid-19 had put “significant pressures on revenue collection and expenditure” by the government.

The Washington-based lender says the money will help to finance healthcare and measures to stabilise the economy, as well as catalyse additional financing from the international community.

The IMF recognises the Ugandan economy is being severely hit by the Covid-19 pandemic and how key sectors like tourism, transport, construction, manufacturing and agriculture are at risk.

Money sent home as remittances, by Ugandans working abroad, has declined and the global economic downturn has hit foreign direct investments.

The IMF also said the pandemic had “exacerbated the challenges posed by heavy rains” this year and the threat from swarms of locusts.

The Bank of Uganda has reduced interest rates to cut the cost of borrowing for businesses, while the government in Kampala has enhanced measures to support the companies.

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