Uganda seeks new IMF loan programme, pledges to lift tax take to 20% of GDP
Representative image: stevepb / Pixabay
Uganda told the IMF on October 16, 2026 it is ready to start a new Extended Credit Facility and aims to raise its tax-to-GDP ratio from about 14% to 20%.
What Happened
Uganda is asking the International Monetary Fund for a new loan programme and has promised to collect far more tax to get it. Finance minister Henry Musasizi met Zeine Zeidane, director of the IMF's African Department, on October 16, 2026, on the sidelines of the IMF and World Bank annual meetings in Bangkok, Thailand. According to a statement from Uganda's finance ministry, the talks centred on a new Extended Credit Facility, the IMF's main lending tool for low-income countries, and Uganda said it was ready to carry out the policy steps agreed with the Fund as conditions for the deal. The ministry did not say how much money it is seeking or when it expects approval.
Key Facts
- Meeting date and place: October 16, 2026, at the IMF and World Bank annual meetings in Bangkok.
- Uganda wants a new Extended Credit Facility (ECF), a concessional IMF loan for low-income countries.
- Its previous three-year ECF ran from 2021 to 2024 and helped steady the economy after the COVID-19 pandemic.
- Finance ministry permanent secretary Ramathan Ggoobi said the government aims to raise the tax-to-GDP ratio from 14.3% in 2025/26 to at least 20% by 2029/30.
- Any new tax measures are to go into the Budget Framework Paper for the 2027/28 financial year.
- The loan amount, the specific prior actions and a timetable for IMF approval were not disclosed.
Why It Matters
An IMF programme matters for more than its own cash. A country that has a programme in place usually finds it easier to raise money from other lenders, including the World Bank and bilateral donors, and its credit rating outlook can improve because the Fund checks its budget numbers every few months. For a government that relies on loans to fill its budget gap, cheaper and more predictable finance is valuable.
The tax pledge is the heart of the deal. At about 14% of GDP, Uganda's tax collection leaves the government leaning on loans to pay for public services. Raising it to 20% in four years would be a big jump. The IMF has repeatedly urged Kampala to collect more of its own revenue and to phase out tax breaks that reduce the base, and the government's promise to put new measures into the 2027/28 budget plan is designed to show it is serious.
Talks have taken time. Earlier this year, the IMF's resident representative in Uganda, Sebastien Walker, said that while discussions had been constructive, further progress was needed before an agreement could be reached. The Bangkok meeting suggests both sides are now discussing the final steps, but no deal has been announced.
| Item | Detail |
|---|---|
| Current tax-to-GDP ratio | 14.3% (2025/26) |
| Target | At least 20% by 2029/30 |
| Last IMF programme | Extended Credit Facility, 2021 to 2024 |
| New request | Extended Credit Facility, amount not disclosed |
Impact
Short-term: Uganda now has to complete the prior actions it agreed with the IMF before the Fund's staff can sign a deal and send it to the Executive Board. Watch for new tax proposals as the government prepares the Budget Framework Paper for 2027/28.
Long-term: If the programme goes ahead and the tax target is met, Uganda would depend less on expensive borrowing and could spend more on services from its own revenue. If tax collection falls short, the country risks higher debt costs and a weaker case with lenders.
Who is affected: Ugandan taxpayers and businesses, who may face new taxes or fewer exemptions; foreign investors and traders in the country; and lenders and rating agencies watching the country's debt.
Key Takeaway
Uganda is seeking a fresh IMF loan and has promised to lift its tax take from about 14% to 20% of GDP, but the amount and timing of any deal remain unknown.
Questions and Answers
Why is Uganda seeking a new IMF loan?
Uganda wants a new Extended Credit Facility, a low-cost IMF loan for low-income countries, to support its budget and reforms after its previous programme ended in 2024. Its finance minister discussed it with the IMF's Africa director on October 16, 2026.
How much money is Uganda asking the IMF for?
The finance ministry has not disclosed the amount, the conditions agreed in advance or a timetable for IMF approval.
What is Uganda's tax-to-GDP target?
Finance ministry permanent secretary Ramathan Ggoobi said Uganda aims to raise tax revenue from 14.3% of GDP in 2025/26 to at least 20% by 2029/30, with new measures going into the 2027/28 budget plan.
Has the IMF agreed to the new programme?
Not yet. No agreement had been announced as of October 19, 2026; the IMF's representative in Uganda had earlier said more progress was needed.
Disclaimer: Prepared by the Peepals newsroom from publicly available sources with AI assistance. Information is accurate to the best of our knowledge at the time of publication and may change. Images may be representative. Not professional advice. Report an error via our contact page.
Sourced and fact-checked by the Peepals Global Editorial Team
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