Uganda: African Development Fund approves $31.6 million loan for COVID-19 response

ABIDJAN, Ivory Coast, July 26, 2020/ -- The Board of Directors of the African Development Fund today approved a $31.6 million COVID-19 Crisis Response Support Program (CRSP) to Uganda to support the government’s response to the COVID-19 pandemic.The funds are designed as budget support within the framework of the Bank Group’s COVID-19 Crisis Response Facility.The objective of the operation is to support Uganda’s efforts to contain the human cost of COVID-19, mitigate its social and economic impact, and support economic recovery. The proposed operation seeks to achieve three short-term and medium-term outcomes: enhanced capacity to test and treat COVID-19 patients to reduce risk of infection and morbidity; ease the impact of the lockdown and other COVID-19 related measures on the poorest; and, mitigate risk to medium-term macroeconomic stabilization and economic resilience.The COVID-19 pandemic has hit the Ugandan economy hard, both directly and indirectly, through global, regional and domestic transmission channels, with the hospitality, tourism, trading and manufacturing industries particularly badly affected.Uganda’s Ministry of Finance, Planning and Economic Development projects a decline in growth to 3.1% for 2019/20 from 6.5% in 2018/19.Uganda confirmed its first case of COVID-19 on 21 March 2020. This number had increased to 1,075 confirmed cases on July 22. Uganda’s overburdened health system does not have adequate resources to face this health emergency.Uganda is currently facing an additional challenge of a deadly invasion of desert locusts, which is posing a threat to food security and exacerbating the country’s vulnerability during this pandemic.“The Government of Uganda has responded to the crisis with a broad financial package aimed at tackling the COVID-19 health emergency and supporting economic activity. The Government allocated resources to the health sector, expand social safety net programs, and provide targeted support to the impacted economic sectors,” the Bank’s Country Manager for Uganda, Kennedy Mbekeani, said following the Board approval.Bank support through the COVID-19 Crisis Response Support Program will provide financing to the budget for targeted spending, aimed at containing and mitigating the health and economic impact of the COVID-19 pandemic. The authorities are committed to full accountability on crisis-related spending including through ex-post audits of COVID-19 related spending”.