IMF praises Uganda on economy

KAMPALA – Uganda has stuck to sound economic policies bringing stability and robust growth, but it is vital the country improves governance and cuts corruption, the International Monetary Fund (IMF) said yesterday.

In the Fund’s latest review of the east African nation’s finances, Deputy Managing Director Takatoshi Kato unveiled an US$2,9 million (N$19,72 m) loan, and praised the Ugandan authorities for hitting their overall fiscal targets in 2004/2005. He said the main challenges now were to build on 5,8 per cent GDP growth last year, and to spread the benefits to the vast majority of Ugandans who live in rural poverty.”This will require persevering with the stabilisation effort and improving the investment environment by lowering the cost of doing business and squarely addressing governance issues,” he said in a statement released in Kampala yesterday.To avoid crowding out private investment and exporters, Kato said the government should continue trying to reduce the budget deficit by boosting domestic revenue collection and improving the management of recurrent expenditure.He said last month’s budget, which cut dependence on donors largely through better tax collection, included important steps in the right direction, but that the accumulation of new domestic arrears remained a concern.He said the government needed to cap non-priority spending, particularly on public administration, and ensure hundreds of millions of dollars of foreign aid were directed to the most economically and socially productive projects.Kato said there was a “crucial need” to cut corruption.The latest loan brings to US$16,6 million the amount provided by the IMF under a three-year facility agreed in September 2002.-Nampa-ReutersHe said the main challenges now were to build on 5,8 per cent GDP growth last year, and to spread the benefits to the vast majority of Ugandans who live in rural poverty.”This will require persevering with the stabilisation effort and improving the investment environment by lowering the cost of doing business and squarely addressing governance issues,” he said in a statement released in Kampala yesterday.To avoid crowding out private investment and exporters, Kato said the government should continue trying to reduce the budget deficit by boosting domestic revenue collection and improving the management of recurrent expenditure.He said last month’s budget, which cut dependence on donors largely through better tax collection, included important steps in the right direction, but that the accumulation of new domestic arrears remained a concern.He said the government needed to cap non-priority spending, particularly on public administration, and ensure hundreds of millions of dollars of foreign aid were directed to the most economically and socially productive projects.Kato said there was a “crucial need” to cut corruption.The latest loan brings to US$16,6 million the amount provided by the IMF under a three-year facility agreed in September 2002.-Nampa-Reuters