Uganda seeks Sh19 billion from World Bank to face coronavirus

Uganda will request the World Bank for a loan of $190 million (Sh19 billion) to help cushion its economy from the impact of coronavirus pandemic, its finance minister said.

The government has cut its economic growth forecast this fiscal year to 5.2–5.7 per cent from an initial projection of 6 per cent, the minister, Matia Kasaija, said in a statement late on Thursday.

The disruption caused by the coronavirus are expected to cut industrial output, tourism earnings and the government’s tax collections.

The government will seek a $100 million (Sh10 billion) budget support loan for this financial year and a further $90 million (Sh9 billion) for the next financial year, Kasaija said.

It will also approach the International Monetary Fund for help with a projected decline in foreign exchange reserves from 4.2 months worth of imports to 3.5 months.

Economic upheaval

The Ugandan shilling declined sharply this week, prompting the central bank to intervene three times in a row to sell dollars and offer support. Kasaija said as a result of the economic upheaval from the outbreak, Uganda’s imports were expected to decline 44 per cent in the four months to June. The expected widespread loss of jobs was likely to push an estimated 780,000 people into poverty, he said.

Uganda has not reported any cases of the coronavirus, which emerged in China late last year and has been spreading around the world.

Nevertheless, on Wednesday, the government ordered the closing of schools, bars and it banned public gatherings to prevent any outbreak.