The International Monetary Fund (IMF) has set three conditions for Uganda to ensure the emergence loan money is not swindled but used for the intended purposes.
On Wednesday, the IMF approved $491.5 million (about Shs 1.9 trillion) in emergency funding for Uganda to address the impact left by the coronavirus (COVID-19) on the economy.
In a Zoom discussion with business reporters on Thursday, Maria Clara, the IMF country director for Uganda, said the government had promised to spend the money prudently, but the Fund nonetheless put conditions for its use.
Corruption is still a prominent feature in Uganda, explaining why donors want to keenly see where their funds are spent. The first condition is that Uganda must report separately about the use of this money and not lump it together with general reporting of all its monies.
Clara said Uganda will also be required to publish large procurement contracts where this money will be spent. The third condition is that within a year, Uganda will be required to have an independent audit on the usage of the money. The results of the audit, Clara said, must be published for the public to know.
The money is approved under the Rapid Credit Facility program that is meant to help poor countries pick up pieces after being battered by the virus.
For Uganda, according to the details of the fund, at least $340m will go to Bank of Uganda to shower up the reserves. This will help the central bank ensure stability in the financial sector, be in position to support the currency and other monetary policy duties.
Some USD150m will go to support budget spending but support specifically the health sector and supplies of medicines. Also, part of this money will go to support private sector businesses through the Uganda Development Bank recapitalization.
Uganda last borrowed from IMF, the lender of last resort, fifteen years back. The current loan is interest free. It has a grace period of five and a half years. Uganda will be expected to pay in a period of ten years.