IMF statement on Uganda’s current Economic framework has a “grey” list, but a steady core inflation!
The International Monetary funds have concluded yet another visit to Uganda. As todays statement and insights to the economy is dim. There is not much prospects or much goodness to take out of it. Unless, you are thinking to invest while the inflations are rising and hoping it does not stop. Even though the needless to say, it has been like this before after General Elections in Uganda. That the economy has suffered a blow and a shock, which has hurt the economy and food prices. Therefore, sparked demonstrations and uprisings, like that last big one in Walk to Work and Activist for Change in 2011. It is clearly on the same path, but just in 2017 instead. President Yoweri Museveni likes to repeat himself!
“Inflation has edged up, mainly reflecting the effects of the drought. Food price inflation rose from 5 percent year-on-year in September 2016 to 22 percent in April 2017. With this, headline inflation recorded 6.8 in April 2017. Core inflation stood at 4.9 percent, in line with the Bank of Uganda’s (BoU’s) 5 percent target” (IMF, 2017). These numbers are showing the decline and increase of common commodities, even if the Core Inflation is around the estimated level; the food prices are showing the problems in the economy in general.
“The authorities have made some progress on structural reforms. Two structural benchmarks have been met on time, three with delay, and the remaining five are pending. Most notably, the authorities moved forward the legislative agenda that will support Uganda’s exit from the Financial Action Task Force “grey” list—the laws now await President Museveni’s assent. The Ministry of Finance, Planning, and Economic Development published reconciled reports on the stock of outstanding arrears at end-June 2016 (3.2 percent of GDP). Pending reforms include sending the BoU Act Amendments to Parliament, publishing the report on end-December unpaid bills, and sending to cabinet a policy for regulating mobile money” (IMF, 2017). The GoU and President Museveni have not complied totally and made laws objectively transparent. Therefore, there are laws awaiting the approval and be requested to Parliament, as the state reserves and budgets are still enforced with the will of the President. In addition, a proof of the maladministration is the amount of budget arrears that was in last budget year, which will hit the economy, as the bills have to be paid this year.
“Uganda’s external position is broadly consistent with fundamentals and desirable policies in 2016. The current account deficit is projected to temporarily increase over the next 5 years as infrastructure and oil sector investment ramp up further. Achieving the envisaged growth dividend of these investments is essential to maintaining external stability—just as for public debt sustainability. International reserves at end-December 2016 stood at US$3 billion (5¼ months of next year’s imports), above the adequacy level suggested by the IMF’s metric for credit-constrained economies. Going forward, the BoU can purchase reserves opportunistically and would meet the EAC convergence criterion of 4½ months of imports. The flexible exchange rate regime is serving Uganda well” (IMF, 2017). Therefore, the government and IMF envisions that the future prospects of oil monies will be sustainable for the current loans into infrastructure projects. It even envision it and with that will ensure external stability and trust into the economic climate of Uganda, that shows that the trust in future gains is the ones; that makes people have faith in the Ugandan economy.
This is all here proof in stated language that the IMF are looking through the budgets and their laws. Nevertheless, is not addressing the trillions shillings suddenly disappearing, neither the Presidential Handshake, as these are just figment of imagination for the foreign economic advisors. They just do not see it or does not want to see it. Peace.
IMF – ‘Uganda: Staff Concluding Statement of the 2017 Article IV Consultation Mission and Discussions for the 8th Review under the Policy Support Instrument’ (16.05.2017) link: http://www.imf-fmi.africa-newsroom.com/press/uganda-staff-concluding-statement-of-the-2017-article-iv-consultation-mission-and-discussions-for-the-8th-review-under-the-policy-support-instrument?lang=en