What you need to know:
- Speaking at a dialogue in Kampala, Ms Jane Nalunga, the Seatini executive director, said: “The decision on how the [money] will be used is too important to be made without public input”.
Civil society members have asked Bank of Uganda to show how it intends to use $490m (Shs1.7 trillion) obtained from IMF under the special drawing rights.
Speaking at a dialogue in Kampala, Ms Jane Nalunga, the Seatini executive director, said: “The decision on how the [money] will be used is too important to be made without public input”.
Under the special drawing rights, which is a form of unconditional financing to IMF member states, Uganda was availed with Shs1.7 trillion to finance Covid-19 responses and economic recovery.
Speaking at the same event, Ms Peninnah Mbabazi, an aid and debt expert, said: “The proper use and consequent accountability have been left solely to the Central Bank and the Finance Ministry with limited involvement [of] Parliament, civil society and the media.”
This, she said, puts money under special drawing rights at risk of being used for debt repayment rather than being used to support economic recovery.
However, Bank of Uganda director research Adam Mugume dismissed the claims, noting that the Central Bank had, through various media platforms, explained the role of special drawing rights, saying government was at liberty to use the money as it deems fit.
“Government can use special drawing rights allocations in whichever way deemed optimal, in which case they become part of public debt owed to IMF,” he said.
One way to use the special drawing rights allocations, Dr Mugume said, was to build buffers for unseen eventualities rather than spend it now.
“This is the cherished view - save these special drawing rights - and build stronger reserves,” he said.
During the meeting, seven MPs led by Mr Silas Aogon, the Kumi Municipality MP, expressed ignorance of any allocation done under special drawing rights.
This is the second time in over a decade Uganda has been granted permissions by the IMF to access money under the special drawing rights, to among others, deal with emergencies as well support economic recovery.
Mr Julius Kapwepwe, a debt analyst, said there was need for government to present a comprehensive Covid-19 recovery plan for the short and medium term, capturing how funds under the special drawing rights will be used.
Special drawing rights are allocations to IMF members based on their quotas. IMF quotas, in turn, are basically the stake member countries have in the Fund and are roughly based on the size of the economy of the country relative to other members.