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World Bank approves 300 mln USD budget support to Uganda

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The World Bank has approved a 300 million-United States-dollar budget support to Uganda that will help the east African country mitigate the impact of the COVID-19 pandemic.


The international lender in a statement posted on its website on Monday said the budget support dubbed Uganda COVID-19 Economic Crisis and Recovery Development Policy Financing, is the first budget support operation in more than six years.

The financing, according to the bank, will address the fiscal financing gap while supporting reforms that will provide immediate relief to individuals and businesses that have been most affected by the pandemic.

“The COVID-19 pandemic has had a significant impact on the economy and livelihoods. This budget support operation will enable the government to provide vital services, social safety nets and a more robust shock-responsive system for the long term, and the economy to recover faster,” said Tony Thompson, World Bank Country Manager for Uganda.

The bank said lockdown restriction measures like closure of businesses has had severe impact on the economy and people’s livelihoods.

“An estimated 3.15 million could fall deeper into poverty, adding to the 8.7 million Ugandans currently living below the poverty line,” the statement said.

The bank said the situation has been worsened by the onset of heavy rains and flooding, and a locust invasion whose impact was expected from April-June.

The country’s overall economic growth is projected at 3 to 4 percent in the financial year 2019/20 (which ends on June 30), lower than the 6.3 percent that had been anticipated for the year, according to the bank.

The financier said to secure the funds, Uganda has undertaken policy measures that directly benefit many low-income households. Farmers will be supported to access high quality agricultural inputs, seeds and fertilizers using e-vouchers to boost nutrition and food security.

“Social protection programs through cash for labor-intensive programs will be expanded to benefit 500,000 individuals while the current senior citizen grant will cover an additional 71 districts to support the elderly,” the statement added.

Uninterrupted access to essential utilities like electricity, water and sanitation services has been guaranteed through subsides, and tax exemption extended to supplies and equipment used in treatment of COVID-19, according to the bank.

To stimulate recovery of private sector, businesses in distress will receive tax relief alongside the liquidity measures from the Central Bank to commercial banks, microfinance institutions and credit institutions, which allows them to provide a moratorium on loan repayment for businesses and individual borrowers that have been affected by the pandemic for up to 12 months.

In addition, government has committed to stronger transparency and management of state-owned enterprises debt and payment of domestic arears to suppliers.

As of June 30, Uganda had 889 cases of COVID-19, 809 recoveries from the virus and no death registered since the index case that was reported on March 21, according to the ministry of health.

(XINHUA)

https://nnn.ng/world-bank-approves-300-mln-usd-budget-support-to-uganda/

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