Uganda and IMF Resume Talks on a New Financial Support Programme

Yesterday 14:25

By: Azzat Manal

Uganda and IMF Resume Talks on a New Financial Support Programme

Uganda is set to resume discussions with the International Monetary Fund (IMF) over a new financial support programme, as the East African country seeks to strengthen its economic outlook and secure a new framework for cooperation with the international lender.

Sebastian Walker, the IMF's resident representative in Uganda, said an IMF delegation is expected to travel to the country in September to continue negotiations. Although previous discussions have been described as constructive, further progress is needed before an agreement can be reached.

Ugandan authorities have been seeking a new arrangement since the country's previous IMF-supported programme ended in 2024. Negotiations have continued since then but have yet to produce a final agreement.

The renewed talks come as Uganda's economy faces a combination of growth opportunities and inflationary pressures. The country's central bank recently kept its key interest rate unchanged at 9.75% for an eighth consecutive meeting, saying that higher oil prices had not yet generated broad-based inflationary pressure.

Nevertheless, annual headline inflation increased to 4% in July from 3.7% in June. Developments in energy prices and other external factors are therefore expected to remain important considerations for economic policymakers.

Uganda's economic growth prospects remain relatively strong. Growth is projected to reach between 7% and 7.5% during the financial year that began in July, compared with 6.4% recorded in the previous financial year.

A new IMF programme could provide Uganda with additional financial and policy support while helping authorities maintain macroeconomic stability and address longer-term economic challenges. The negotiations are also likely to focus on fiscal management and reforms designed to support sustainable growth.

For Kampala, reaching an agreement with the IMF would represent an important step in strengthening its economic policy framework after the conclusion of the previous programme. However, the September negotiations will need to resolve remaining differences before a new arrangement can be formally concluded.