Uganda is seeking a new concessional lending programme from the International Monetary Fund (IMF) as the government pledges tax and spending reforms aimed at strengthening public finances and improving the country’s credit rating.
Uganda’s previous three-year ECF arrangement expired in June 2024, leaving the government seeking a successor programme. The proposed facility is intended to provide access to lower-cost, longer-term funding and strengthen confidence in the country’s economic policies. The IMF’s concessional lending terms can include zero-interest loans, although any new arrangement would depend on negotiations and formal approval.
Finance State Minister Henry Musasizi met IMF African Department Director Zeine Zeidane on Friday, October 16, on the sidelines of the 2026 IMF-World Bank annual meetings in Bangkok, Thailand.
According to the Ministry of Finance, the discussions focused on the proposed Extended Credit Facility (ECF), with Musasizi saying Uganda was ready to implement the agreed prior actions required for the programme.
He said the arrangement would help the country secure more concessional financing and improve its credit rating, which influences how investors assess the risk of lending to a government.
Government targets higher tax revenue
The talks covered fiscal consolidation, monetary policy, domestic revenue mobilisation, tax policy, budget discipline, governance and structural reforms.
Ramathan Ggoobi, the permanent secretary and secretary to the Treasury, said the government intended to raise Uganda’s tax-to-gross domestic product ratio from about 14 percent to at least 20 percent.
He said the necessary tax measures would be included in the Budget Framework Paper for the 2027/28 financial year.
The target would increase the share of national economic output collected by the government in taxes, potentially providing more domestic revenue to finance public services and development spending.
The discussions also addressed expenditure controls, including supplementary budgets, and the composition of government spending.
Michael Atingi-Ego, governor of the Bank of Uganda, joined Musasizi and Ggoobi in the meeting with the IMF official.
Credit rating and borrowing costs
In August 2026, Fitch affirmed Uganda’s Long-Term Issuer Default Ratings at ‘B’ with a stable outlook, according to the supplied report.
Sovereign credit ratings assess a government’s ability and willingness to meet its debt obligations. They can influence the interest rates investors demand when lending to a country, although borrowing costs also depend on market conditions and other economic factors.
The government is seeking concessional financing as it works to strengthen its public finances and maintain access to affordable funding.
The proposed IMF programme has not been confirmed as approved. Uganda would need to complete the relevant requirements and obtain formal approval before any new facility could be disbursed.
IMF urges protection for vulnerable households
At a separate meeting of the IMF Africa Group 3 Constituency, discussions covered global economic pressures, debt, fiscal adjustment, exchange-rate flexibility, subsidy reforms and Africa’s representation in international financial institutions.
Zeidane urged policymakers to balance economic reforms with measures to protect vulnerable households and support investment and employment.
“Policy makers should not lose sight of growth and reforms that make economies more resilient to future shocks,” he said.
The meeting identified reliable electricity, improved digital connectivity, stronger skills, a predictable business environment, private-sector expansion and job creation as priorities for the region.
The discussions come as Uganda seeks to increase domestic revenue collection while managing its financing needs and strengthening the credibility of its economic policies.
