(Bloomberg) -- Ugandan authorities and the International Monetary Fund are negotiating a new loan package to succeed the $1 billion extended credit facility approved three years ago.
The program agreed in 2021 to stabilize Uganda’s finances in the wake of the Covid-19 pandemic has provided $870 million so far and awaits a sixth and final review to disburse the balance.
“We are not blindly there just to borrow money,” Secretary to the Treasury Ramathan Ggoobi told reporters on Tuesday in the capital, Kampala. The IMF programs are “mainly for policy reform and alignment so that we can keep the economy healthy.”
He declined to give more details on the fresh borrowing.
Uganda finds itself in need of other funding sources since the World Bank froze new lending after the nation passed harsh anti-LGBTQ laws that include the death sentence. The legislation is currently under review by the nation’s Supreme Court and authorities are in talks with the lender to resume financing.
Uganda has budgeted to increase borrowing from the local market in the year through June by 12% to 8.97 trillion shillings ($2.4 billion) and also plans external financing of 9.58 trillion shillings.
The country expects its budget financing gap to widen to 5.7% of gross domestic product from 4.5% in the past fiscal year.
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