Mr Sebastien Walker, International Monetary Fund country Representative. PHOTO/MICHAEL KAKUMIRIZI
Dr Walker, welcome to Uganda. What have you liked in Uganda in the short time you have been?
Thank you, Martin. I first visited Uganda in 2013, and now that I live here. I appreciate the friendly and resourceful people, the lush vegetation, and the food – I am a big fan of ‘kalo’ (millet) and groundnut sauce.
What were you doing before coming to Kampala’s office as the new IMF resident Representative?
I was at IMF headquarters in Washington, DC, where I worked on expenditure policy in the Fiscal Affairs Department and on several West African countries in the African Department. During my IMF career and studies, I have worked in twelve different African countries.
What is your mission in Uganda as the resident representative?
I am here to support the excellent relationship between Uganda and the IMF by acting as a trusted advisor to the authorities, notably at the Ministry of Finance, and the Bank of Uganda. I am also the first point of contact for them, parliamentarians, civil society, youth networks, the media, development partners, and the private sector.
What is the current status of the relationship between the IMF and Uganda?
Our work in Uganda continues through regular policy advice and capacity development, which includes technical assistance and training for policymakers.
We have been supporting Uganda’s efforts to improve domestic revenue mobilisation, strengthen its climate-related public investment management, and bolster its financial supervision and regulation.
Which new programmes is the IMF going to introduce for Uganda since the Extended Credit Facility (ECF) arrangement has expired?
The previous IMF-supported program, which expired in June 2024, helped to guide Uganda’s post- pandemic recovery and maintain macroeconomic stability.
The Ugandan authorities have expressed interest in a new IMF-supported programme and negotiations will commence once sufficient information about the latest developments has been gathered.
Uganda’s public debt level has reached a moderate level of debt sustainability, what should the Uganda government do to reduce borrowing?
We assess Uganda’s public debt to be sustainable with a moderate risk of debt distress.
To reduce its borrowing, Uganda should continue with its fiscal consolidation efforts, mainly by stepping up its efforts to mobilise domestic revenues especially by phasing out tax exemptions.
It should also focus on containing low-priority current spending.
With fiscal consolidation, Uganda will be less reliant on borrowing because the debt that it needs is expensive.
What risks are Uganda’s economy facing?
The main risks are from delays in domestic revenue mobilisation to fund Uganda’s development needs and from insufficient accumulation of foreign exchange reserves.
Uganda’s mostly rain-fed agriculture is vulnerable to climate shocks, while delayed reform implementation, especially in fighting corruption, could weigh on the economy more generally.
Countries in Sub-Saharan Africa are trying to implement reforms to restore macroeconomic stability. What can Uganda do to enable the country achieve sustainable economic development?
Uganda should strengthen governance by better enforcing its anti-corruption framework, improving its business environment, and enhancing regional trade integration.
Higher social spending to improve Uganda’s human capital and better infrastructure would contribute to more inclusive growth and Uganda’s progress towards the Sustainable Development Goals.
Foreign exchange reserve plays a key role in the country’s balance of payment position. What is the appropriate duration foreign exchange reserve cover for a country like Uganda?
The appropriate level of foreign exchange reserves depends on a country’s circumstances.
For a country such as Uganda, we recommend foreign exchange reserves worth at least 3.5 months of imports to meet the country’s needs in the event of a shock.
What is the IMF’s view on Uganda’s monetary policy stance?
The Bank of Uganda has been a pioneer in inflation-targeting in the region and has a strong record of accomplishment in anchoring inflation expectations.
The monetary policy stance should continue to be guided by the Bank of Uganda’s target of 5 percent for core inflation (which excludes volatile energy and food prices).
With core inflation now at 3.8 percent, and as risks of higher inflation recede, there is room for the Bank of Uganda to continue gradually lowering the Central Bank Rate while keeping the exchange rate flexible and monitoring the global environment.
This will stimulate credit in the private sector and improve the competitiveness of exporters.
