economy 16 October 2026 Daily Monitor (Uganda)
Uganda Seeks New IMF Program for Cheaper Financing
Uganda is actively pursuing a new Extended Credit Facility (ECF) with the International Monetary Fund (IMF) to secure more affordable, long-term financing and boost investor confidence amid economic pressures. Source: https://www.monitor.co.ug/uganda/news/national/govt-seeks-new-imf-programme-to-unlock-cheap-financing-5635124
Uganda’s government is engaging with the International Monetary Fund (IMF) to establish a new Extended Credit Facility (ECF) program. This move aims to unlock crucial concessional financing, which is vital at a time when the Ugandan Shilling faces depreciation, borrowing costs are on the rise, and the nation’s credit rating is under scrutiny.
Finance State Minister Henry Musasizi conveyed Kampala’s readiness to implement agreed-upon prior actions during discussions with the IMF’s Africa Director, Zeine Zeidane, at the IMF-World Bank Annual Meetings in Bangkok. The proposed program is seen as a way to bolster policy credibility and enhance Uganda’s sovereign credit standing.
Officials addressed key areas of concern with the IMF, including fiscal consolidation, monetary policy, domestic revenue mobilization, tax policy, expenditure discipline, and governance reforms. Permanent Secretary Ramathan Ggoobi reaffirmed the government’s commitment to increasing the tax-to-GDP ratio from its current 14 percent to a target of 20 percent, with necessary tax measures to be included in the Financial Year 2027/28 Budget Framework Paper.
The significance of an ECF extends beyond direct IMF funding. Such a program often acts as a catalyst, encouraging other concessional lenders like the World Bank and African Development Bank to provide their support. For Uganda, which has experienced outflows of offshore investment from local debt and rising Eurobond yields, accessing cheaper external financing is a priority to maintain debt sustainability.
Uganda’s public debt has surpassed Shs107 trillion, with a substantial portion of domestic revenue now allocated to interest payments. The recent weakening of the Shilling and an increase in the Central Bank Rate have further amplified the cost of domestic borrowing, making concessional external financing a more attractive option. The government hopes that a new IMF program will help stabilize markets and provide funding for the upcoming budget without unduly burdening the private sector.