Uganda negotiates new IMF loan as it pushes for higher tax revenue

Uganda is pursuing a new concessional loan from the International Monetary Fund, with Finance Minister Henry Musasizi committing to implement the reforms required for approval. He met IMF African Department Director Zeine Zeidane on October 16 in Bangkok, where discussions focused on a successor Extended Credit Facility, though no financing size or approval schedule was announced. The prior three-year ECF, approved in June 2021, ended in June 2024 without completing its final review.

Uganda plans to increase its tax-to-GDP ratio from 14.3% in FY2025/26 to at least 20% by FY2029/30, incorporating revenue-raising steps into the 2027/28 budget framework. Bank of Uganda Governor Michael Atingi-Ego also attended the talks, two days after the central bank lifted its benchmark rate by 225 basis points to 12% in response to a depreciating shilling and rising inflation forecasts. Fitch Ratings kept Uganda’s sovereign rating at B with a stable outlook, noting rising debt and fiscal deficits as concerns.