Non-governmental groups have called on the government to use the IMF’s $1.7 trillion gift to help combat poverty, improve the economy, and buy Covid vaccinations for the populace.
The IMF provided Ugandan Special Drawing Rights worth over $1.7 billion on August 23, 2021 to bolster the country’s currency and economy, which were suffering due to a global pandemic.
Jane Nalunga, the Executive Director for SEATINI-Uganda, said in a meeting with journalists on Sunday that Uganda’s recent SDR issue offered some type of debt relief to the country because it could use the resources to meet its public spending demands without having to take on any additional debts.
She told reporters that countries like Uganda may rely on the SDR as one of the free viable options to support their economic revival.
“The priority should be focused on getting vaccines and medical and preventative equipment with the additional funds,” Nalunga suggested.
The economy can’t be reopened unless the entire population has been vaccinated. This is a priority.”
The US has sent Uganda 647,080 doses of the Moderna Covid-19 vaccine.
More than a million people have received the Astrazeneca and Sinovac vaccines, as documented by the Ministry of Health.
But at a little over 1.3 million, the goal of immunizing 22 million people before full economic recovery can occur remains impossible.
The pandemic pushed over 3.1 million households into poverty and caused the number of poor people in the country to go up to 11 million, according to the World Bank.
The country would have an opportunity to resuscitate its economy with the new SDRs that are coming in. SEATINI stated that Covid, which hit Uganda’s income collections hard and caused a shortfall of over $2.4 trillion, has left the government in dire straits.
Jane Nalunga also supports providing social welfare support by giving people money directly in order to help small business. “The money should be injected into the real economy supporting micro-small business enterprises and providing adequate social welfare support through programs such as direct cash transfers,” Jane Nalunga explained.
The Executive Director of SEATINI warned that if the government did not support economic recovery, there would be further budget problems, because the economic downturn had affected everyone.
Although civil society organizations cautioned the government against using the money to settle debt obligations, they said it was OK to use it for social purposes.
No matter where you head, if you have no idea where you’re headed, any course will suffice. “Free money from the IMF” called Special Drawing Rights (SDRs), but Regina Navuga, the program coordinator of SEATINI Uganda, noted that “we will be doomed” if we have a poor plan.
“Make sure you plan for the money because, as a county, we all benefit from it.”
The CSOs argued that foreign direct investments were encouraged by tax incentives, but people should also be incentivized to pay taxes.
It was recommended that the government talk to civil society, parliament, the media, parliament, and the general public on the transparent and ethical use of public funds.
“Parliament should be playing a more active role, and should guarantee that these money are spent wisely,” Jane Nalunga of SEATINI explained.