Civil society organizations under the Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI) Uganda are advising the Government to seek debt relief from her creditors to save resources necessary to fight the pandemic.
This comes at the time when the International Monetary Fund (IMF) decides to issue new Special Drawing Rights (SDRs) to a tune of $650 billion USD to help address member countries' liquidity challenges and enable them finance the fight against the COVID19 pandemic and support national recovery efforts because according to World Bank the pandemic pushed the country to a standing 11 million people into poverty.
This is in response to the Covid pandemic disruption that has greatly affected the country’s domestic revenue collections with the finance ministry registering a shortfall of over Shs. 2.4 trillion in revenue collections within the previous financial year.
According to SEATINI,the situation has pushed the government to borrow heavily with the country’s debt burden growing to over 70 trillion shillings in June 2021 from 65.8 trillion in June 2020.
With the issuance of the IMF Special Drawing Rights,this offers some form of debt relief to recipient countries especially low income countries like Uganda as they can now use such resources to meet their public needs without having new loans. Uganda as an IMF member country received about $346 million USD of these funds which translates into an equivalent of 1.2 trillion Ugandan Shillings.
Jane Nalunga the Executive Director of the SEATINI Uganda says however says the Central Bank and Ministry of Finance should hold dialogues with Civil Society, media, Parliament and the general public to collect their views on the proper and transparent utilization and management of these resources.
