International Monetary Fund concludes Uganda post-financing assessment and judges capacity to repay as adequate despite rising fiscal vulnerabilities

The International Monetary Fund’s Executive Board concluded the 2025 Post-Financing Assessment with Uganda and endorsed the staff appraisal on a lapse-of-time basis. Uganda’s capacity to repay the Fund was assessed as adequate under both baseline and downside scenarios, although the IMF highlighted growing fiscal vulnerabilities despite robust post-pandemic growth and contained inflation. Real GDP growth rose to 6.3 percent in FY2024/25, inflation stabilized below 4 percent, the current account deficit narrowed to 6.1 percent of GDP, and foreign exchange reserves rose to over three months of import coverage by October 2025, supported by strong coffee exports and portfolio inflows. At the same time, the overall budget deficit widened to 6 percent of GDP in FY2024/25 (from 4.7 percent in FY2023/24) and public debt reached 52.4 percent of GDP, with repayment risks linked to potential portfolio outflows, commodity price shocks, oil project delays and governance weaknesses. Staff recommended accelerating fiscal consolidation through revenue mobilization and spending rationalization, advancing tax policy measures including rationalization of tax expenditures and broadening the tax base, and prioritizing public financial management reforms and implementation of oil revenue frameworks; maintaining a data-driven monetary policy while limiting central bank financing in line with the Public Financial Management Act; preserving exchange rate flexibility and rebuilding reserves (including careful management of the pilot gold purchase program); and strengthening supervision and the regulatory framework given rising sovereign-bank linkages and expanding FinTech lending. Macroeconomic conditions are expected to remain favorable, with oil production projected to start in late 2026.