Uganda is first country to receive assistance under Poverty Reduction and Growth Facility

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On November 22, 1999, the IMF transformed its Enhanced Structural Adjustment Facility (ESAF) into the Poverty Reduction and Growth Facility (PRGF) and expanded the facility’s objectives to support programs that substantially strengthen balance of payments positions and make them sustainable, while fostering durable growth. Uganda became the first recipient of assistance under the new facility on December 10, 1999, when the IMF approved the country’s third-year program to support the government’s economic program. Uganda’s three-year arrangement was approved under the ESAF in an original amount of SDR 100.4 million (about $138 million), of which SDR 73.6 million (about $100.8 million) has been disbursed (see Press Release No. 97/52, IMF Survey, November 17, 1997, page 365). The latest decision provides Uganda with another SDR 26.8 million (about $36.7 million) to be disbursed during the third year, with SDR 8.9 million (about $12.2 million) available immediately. Following are excerpts from IMF Deputy Managing Director Shigemitsu Sugisaki’s statement after the IMF Executive Board’s discussion.

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“Directors welcomed the significant progress made in the recent past in strengthening the poverty-reduction focus of Uganda’s economic policies and the steps already taken to produce a poverty-reduction strategy paper [see page 3] next year. These steps include a comprehensive review of Uganda’s poverty characteristics; the institution of a broad-based participatory process for the development, implementation, and monitoring of poverty eradication programs—involving civil society, local governments, and the donor community; a marked increase in outlays on key social areas; and the establishment of a decentralized machinery for the delivery of essential services. These actions have been underpinned by prudent macroeconomic policies and a wide range of structural reforms that have helped to achieve broad-based economic growth. Directors stressed the importance of continued implementation of sound policies and maintenance of an open foreign exchange system to strengthen the environment for private investment and to help maintain high economic growth, which they considered vital for the achievement of the authorities’ poverty-reduction objectives.

“Notwithstanding this impressive start, Directors expressed concern at Uganda’s welfare indicators, which remain among the lowest in Africa...