Uganda: Post-Financing Assessment Discussions-Press Release; and Staff Report

This paper focuses on Uganda’s post-financing assessment discussions. Uganda’s post‑pandemic recovery has been strong, supported by broad‑based economic activity and contained inflation. Foreign exchange reserves rose markedly in 2025, aided by favorable external conditions, including robust coffee exports and renewed portfolio inflows. Uganda’s capacity to repay the IMF remains adequate, though vulnerable to risks from potential portfolio outflows, commodity price volatility, and further delays in the oil project. The authorities acknowledge the need for fiscal consolidation and reaffirm their commitment to prudent monetary policy and exchange rate flexibility to safeguard macroeconomic stability. Monetary policy should remain data‑driven and forward‑looking; as inflation pressures ease, a gradual easing cycle could help stimulate private sector credit. Continued exchange rate flexibility will be essential to absorb external shocks and preserve competitiveness. The financial sector remains resilient, with improved asset quality and strong capital buffers, though rising sovereign‑bank linkages warrant close monitoring. Strengthening supervision, risk management, and regulatory frameworks—particularly amid rapid FinTech expansion—remains crucial for financial stability.