Christine Lagarde, Managing Director of the IMF has praised Uganda on its substantial economic process. Lagarde concluded a three day visit to Uganda on Saturday, during which she hailed the East African country on poverty reduction, inclusive growth, public investment transparency in the oil industry and financial inclusion.
In a statement, Lagarde said: “These achievements have been underwritten by strong macroeconomic policies and a reliance on the private sector as the engine of growth. Looking ahead, I welcome the government’s sense of urgency and emphasis on promoting inclusive growth which is needed to make further progress on poverty reduction and create jobs for the fast-growing population.”
She added that with inclusive growth comes increased public investment and jobs. However, Lagarde also noted that Uganda will only continue to prosper if it tackles pressing challenges like poor fund absorption, poor project appraisal, and corruption – especially in the roads sector.
“The government’s focus on overcoming implementation challenges, including through strengthening public investment management, should help ensure that these investments yield the desired outcomes in terms of higher growth and job creation,” she said.
The World Bank is less optimistic. In September 2016, the financial institution suspended new lending to the Ugandan government on grounds of low absorption among other factors.
“More generally, I commended the government and the Bank of Uganda for their prudent approach to fiscal and monetary policy. Continued progress on domestic revenue mobilisation will help keep government debt on a sustainable path. Uganda’s inflation targeting framework is serving the country well,” Lagarde contends.
Overall, her statement on Uganda was positive, but Lagarde has also cautioned the government on the continued borrowing that is increasing debt in the economy.