Uganda asks IMF for US$900 million three-year loan package

Uganda is seeking at least $900 million in a three-year International Monetary Fund program for its budget amid rising spending due to the COVID-19 pandemic.

Negotiations are expected to conclude ahead of the 2021-22 budget presentation next month, Treasury Deputy Secretary Patrick Ocailap said Wednesday in an interview in the capital, Kampala.

East Africa’s third-biggest economy has fulfilled loan preconditions and expects the Washington-based lender will approve the package, he said. A year ago, the IMF agreed to lend Uganda $491.5 million to alleviate the economic fallout from the pandemic.

Uganda’s budget deficit in the current fiscal year ending June may come in 2 percentage points wider from the 7.2% registered in 2019-20, according to the IMF.

The government of Africa’s biggest coffee exporter plans a budget of about 44.8 trillion shillings ($12.6 billion) for the year starting in July, according to the Finance Ministry. Some of the spending will be on roads and a second airport in its oil-rich region ahead of the planned commencement of production early 2025.

French oil giant Total SE is leading initiatives to start pumping oil alongside China’s Cnooc Ltd. The country estimates reserves of more than 6 billion barrels of oil resource and as much as 1.4 billion barrels of recoverable oil.