The International Monetary Fund (IMF) has praised Uganda’s growing economy in its latest forecast released mid last month.
The IMF, in its May 15 forecast, said Uganda’s economy is on track to top seven per cent growth this year as the country’s ambitious monetary reforms in the wake of corruption scandals, where taxpayers lost billions and donors reduced aid, begins to bear fruits.
Ms Ana Lucía Coronel, the IMF senior resident representative, said in a statement that Uganda’s macroeconomic outlook is favourable, with growth projected at six to seven per cent in the medium term against earlier forecast of 4.3 per cent in the context of mid-single digit inflation.
“With low inflation and signs of economic recovery, market confidence and expectations are improving,” Ms Coronel said. “External performance was stronger than anticipated, with the current account deficit projected to narrow significantly this fiscal year owing to strong non-coffee exports and a temporary deceleration of imports.”
Aided by foreign exchange inflows, the IMF said Uganda’s international reserves were significantly higher than anticipated and stand at a comfortable level equivalent to four months of imports, creating a significant buffer to the economy in the context of uncertainty in the international environment.
However, the Leader of Opposition in Parliament, Mr Nandala Mafabi, and Shadow Finance Minister Geoffrey Ekanya disagreed with the IMF assessment of Uganda’s economy and accused the organisation of turning a blind eye to the government’s failure to balance what they called “endemic challenges to meaningful economic growth”.
Mr Mafabi said addressing the country’s massive development needs while maintaining macroeconomic stability with tangible anti-corruption efforts is crucial.
In defence of the IMF outlook, the Ministry of Finance information officer, Mr Jim Mugunga, said the assessment is a testimony to the financial discipline and reforms the ministry has put in place to ensure that the economy improves.
The IMF said the government has taken steps to improve controls in payment systems and prepare a public financial management Bill that will set the legal framework to strengthen credibility of the budget.