The Finance Minister has tabled a proposal to borrow 1.7 trillion shillings, (449.8) million dollars to mitigate the effect of the coronavirus pandemic which has slowed down the economy.
Minister David Bahati
The Finance Minister has tabled a proposal to borrow 1.7
trillion shillings , (449.8) million dollars to mitigate the effect of the
Coronavirus (COVID -19) pandemic which has slowed down the economy.
The Proposal was presented today during plenary by the
Minister of Finance in Charge of Planning, David Bahati.
Government will borrow 757 Billion Uganda shillings for this financial year
ending and next financial year from the International Development Association (IDA)
of the World Bank Group to provide sufficient financial resources to the health sector and
mitigate negative effects on the economy due to COVID-19.
The government also seeks
to borrow 948 Billion shillings from the International Monetary Fund (IMF) for balance of
payments support to the Bank of Uganda (BoU). This is to ensure that
international reserve buffers remain strong and that the exchange rate remains
Rebecca Kadaga, the Speaker of Parliament forwarded the two
proposals to the Parliamentary committee on budget to scrutinize it urgently.
Recently when presenting the likely economic impact of the
Coronavirus, the Finance Minister Matia Kasaija told MPs that Uganda faces a revenue shortfall of 270
Billion shillings due to the lock down.
“To deal with this economic
shock, both fiscal and monetary policy adjustments would be required. The
fiscal policies will play a critical role in mitigating the negative impact of
the pandemic on economic activity and the challenges in the affected sectors
particularly health, while monetary policies will help to reduce the impact of
the deterioration of the Balance of Payments.” said Kasaija.
He also said that 80,000 Ugandans are mostly likely to be
pushed into poverty due to the low activity in the service and industry areas,
and this will lead to a decline in economic growth.
The economic growth
for the country for financial year 2019/2020 has been revised downwards from
6.0% to 5.2% or 5.7% depending on the severity of the impact of the virus in Uganda.