Uganda’s economic recovery has received a $300 million financial injection from the World Bank, with part of the money going towards boosting the government’s effort to prevent and detect the spread of the coronavirus.
The money – the first of its kind in six years - is expected to boost Uganda’s economy in clawing back some gains that have been lost to government’s efforts in fighting the coronavirus.
“The Uganda Covid-19 Economic Crisis and Recovery Development Policy Financing is the first budget support operation in more than six years and will address the fiscal financing gap while supporting reforms that will provide immediate relief to individuals and businesses that have been most affected by the pandemic,” the World Bank announced in a statement.
With stringent measures like the closure of some businesses and a 7 pm curfew still in place, Uganda’s economy remains bruised. Sales have fallen, and with them tax collections, while the growth of Gross Domestic Product in the just-ended financial year has been the lowest in years.
Due to Covid-19 impact, the World Bank is worried that an estimated 3.15 million Ugandans could fall deeper into poverty, adding to the 8.7 million people currently living below the poverty line. The bank says the situation had already been made dire by the onset of heavy rains and flooding, and a locust invasion whose impact was expected during April to June of 2020.
“The Covid-19 pandemic has had a significant impact on the economy and livelihoods. This budget support operation will enable the Government to provide vital services, social safety nets and a more robust shock-responsive system for the long term, and the economy to recover faster,” Tony Thompson, World Bank country manager for Uganda, said in a statement.
The World Bank says that to secure the financing, Uganda has undertaken policy measures that directly benefit many low-income households. Farmers will be supported to access high-quality agricultural inputs, seeds and fertilizers using e-vouchers to boost nutrition and food security. Social protection programs through cash-for-work and labour-intensive programs will be expanded to benefit 500,000 individuals while the current Senior Citizens Grant will cover an additional 71 districts to support the elderly.
There is always public pessimism over who the beneficiaries of this kind of support would be, with some people arguing it will target the politically-correct section.
The World Bank will look to the recently-established national single registry for beneficiaries of safety net programs to ensure that the money has an impact on those that need it the most.