REUTERS, Washington | Friday
THE International Monetary Fund approved a $11.6m payment to Uganda after completing a review of the African nation’s poverty reduction strategy and other economic reform plans.
After a meeting of its executive board, the IMF welcomed Uganda’s efforts to stem a decline in trade and deal with costs arising from bank restructuring, but underscored the need to “reverse the recent widening of the fiscal deficit, which had occurred despite the authorities’ efforts.”
Uganda was the first country to qualify for the international community’s Highly Indebted Poor Countries (HIPC) initiative, which rewards reformist debtor states by offering them generous terms of debt relief.
To win the aid, countries must show clear progress toward economic growth and stability and must base their economic policies on a special poverty reduction strategy.
Donors almost shut the African country out of the HIPC programme earlier this year after Uganda announced plans to buy a presidential jet, angering those who felt that extra cash in the budget should be used exclusively to help the poor.
IMF Deputy Managing Director Shigemitsu Sugisaki praised Uganda for producing what he called “a commendably comprehensive poverty reduction strategy” and said the IMF directors welcomed the Uganda authorities’ efforts to better prioritise spending while trying to beef up revenues.