COVID-19 loans: Gov't gets sh3 trillion in three months

HEALTH   COVID-19   LOANS

In the last three months, Uganda has received at least sh3 trillion from top lenders to ease the economic and health effects occasioned by the deadly COVID-19.

The top three lenders include; World Bank, International Monetary Fund (IMF) and Africa Development Fund (ADF), releasing a total amount of $823m or sh3 trillion to aid government operations in the fight against COVID-19.

The ADF is the latest to approve $31.6 or sh115b to Uganda. ADF's support through the COVID-19 Crisis Response Support Program will provide financing to the budget for targeted spending, aimed at containing and mitigating the health and economic impact of the COVID-19 pandemic.

The total loan value from the three top lenders is equivalent to the government's sh3.3 trillion revenue deficit registered by the taxman in the fiscal year 2019/20.  

According to the Ministry of Finance, the three months lockdown by the government affected tax revenues. 

ADF's Country Manager for Uganda Kennedy Mbekeani said: "The authorities are committed to full accountability on crisis-related spending including through ex-post audits of COVID-19 related spending.

"The proposed operation seeks to achieve three short-term and medium-term outcomes: enhanced capacity to test and treat COVID-19 patients to reduce risk of infection and morbidity; ease the impact of the lockdown and other COVID-19 related measures on the poorest; and, mitigate risk to medium-term macroeconomic stabilization and economic resilience."

In June, the World Bank approved $300m or sh1.1 trillion budget support operations to boost the government's capacity to prevent, detect and treat COVID19, protect the vulnerable and the poor population. 

An estimated 3.15 million Ugandans are projected to fall deeper into poverty, adding to the 8.7 million people currently living below the poverty line. 

In May, the IMF Executive Board Approved $491.5m or sh1.8 trillion for Uganda under the Rapid Credit Facility. 

IMF said the funds are meant to help finance the health, social protection and macroeconomic stabilization measures, meet the urgent balance-of-payments and fiscal needs arising from the COVID-19 outbreak and catalyze additional support from the international community.

Uganda confirmed its first case of COVID-19 on 21 March 2020. This number has since increased to 1,128 confirmed cases as of July 27 with two death registered. 

Uganda is currently facing an additional challenge of a deadly invasion of desert locusts, which is posing a threat to food security and exacerbating the country's vulnerability during this pandemic.

This month Parliament discussed at least 10 loan requests worth sh2.5 trillion for consideration to the national economy committee in the wake of the COVID-19. 

On June 17th, a loan request of sh628b from the International Development Association (IDA) of the World Bank to support irrigation for climate-resilient project, sh111b from Exim Bank of India for supply and installation of solar-powered water pumping systems for areas with lowest safe water coverage among others.