IMF Mission Chief for Uganda Axel Schimmelpfennig

International monastery fund (IMF) has commended Uganda’s macroeconomic performance and development gains over the last three decades, including halving its poverty rate.

This was during IMF Executive Board discussion of 2019 Article IV Consultation with Uganda, where they said the country’s economy continues its recovery.

Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visited Uganda and collected economic and financial information, and discusses with officials in the country’s economic developments and policies. On return to headquarters, the staff prepared a report, which formed the basis for discussion by the Executive Board.

Bank Directors encouraged further progress towards poverty reduction and shared prosperity, through strong macroeconomic policies, human capital development, and improvements in institutions and governance with continued IMF capacity development support.

Directors welcomed the authorities’ intention to develop a fiscal rule to manage future oil revenues and encouraged the authorities to consider adopting an interim debt ceiling to guide fiscal policy. Directors also stressed the need to improve fiscal policy formulation and implementation including through a more binding approach to the annual budget process and encouraged the authorities to promptly adopt and implement the Domestic Revenue Mobilization Strategy given Uganda’s still low revenue collection.

Directors noted that a more balanced expenditure composition between infrastructure and social development (especially for the youth, women and low‑skilled workers) would better support inclusive growth and highlighted the need for spending prioritization, addressing domestic arrears and continued efforts to strengthen public finance and investment management practices.

While Uganda’s debt level remains at low risk of debt distress, Directors cautioned that debt metrics had weakened, some investment projects may not generate the envisaged return, and interest payments are rising. Directors thus called on the authorities to keep debt below 50 percent of GDP in nominal terms over the medium term to safeguard the hard‑earned favorable debt sustainability rating.

Directors agreed that inflation targeting continues to serve Uganda well under the central bank’s stewardship. They indicated that monetary policy could remain supportive for now and agreed on building reserves opportunistically under a flexible exchange rate regime given external vulnerabilities. Directors also urged the authorities to strengthen the Bank of Uganda’s financial position through recapitalization and expenditure measures.

Directors concurred that bank supervision and regulation are generally sound and noted the importance of a more favorable business environment and greater access to finance for a private sector‑led growth.

Finally, Directors welcomed the improvements in Uganda’s compliance with the AML/CFT standards and its decision to begin accession to the Extractive Industries Transparency Initiative. They called for further efforts to strengthen governance and reduce corruption, including addressing weak implementation of the relevant legal framework.