Uganda to seek $190 mln from World Bank to cushion coronavirus blow

PUBLISHED: Fri, 20 Mar 2020 15:24:54 GMT
Share

Report by Elias Biryabarema

KAMPALA (Reuters) – Uganda will request the World Bank for a loan of $190 million to help cushion its economy from the impact of the coronavirus pandemic, its finance minister said.

The government has cut its economic growth forecast this fiscal year to 5.2–5.7% from an initial projection of 6%, the minister, Matia Kasaija, said in a statement late on Thursday.

The disruption caused by the coronavirus are expected to cut industrial output, tourism earnings and the government’s tax collections.

The government will seek a $100 million budget support loan for this financial year and a further $90 million for the next financial year , Kasaija said.

It will also approach the International Monetary Fund for help with a projected decline in foreign exchange reserves from 4.2 months worth of imports to 3.5 months.

The Ugandan shilling declined sharply this week, prompting the central bank to intervene three times in a row to sell dollars and offer support.

Kasaija said as a result of the economic upheaval from the outbreak, Uganda’s imports were expected to decline 44% in the four months to June. The expected widespread loss of jobs was likely to push an estimated 780,000 people into poverty, he said.

Uganda has not reported any cases of the coronavirus, which emerged in China late last year and has been spreading around the world.

Nevertheless, on Wednesday, the government ordered the closing of schools, bars and it banned public gatherings to prevent any outbreak.

($1 = 3,835.0000 Ugandan shillings)

(Editing by Duncan Miriri and Robert Birsel)

This article was first published on Reuters Africa https://af.reuters.com/article/investingNews/idAFKBN2171ED-OZABS and is republished with its permission.

Sign Up for Our Newsletter Daily Update
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.