On March 27, 2020, Uganda registered the first case of COVID-19 (coronavirus) and had 39,600 cases and 320 deaths by January 31, 2021. The Government took fast action to minimize the spread of the virus, imposing restrictions on travel and closing Entebbe International Airport and all borders for passenger travel. President Joweni Museveni also promoted better hygiene through hand washing and health safety habits, instituted social distancing measures, and prohibited public gatherings and shut down schools. Employees were asked to work from home, except for those providing essential services.
While the number of COVID-19 cases has increased at a relatively slow pace, the spillover of the global recession and domestic containment measures have had a severe impact on livelihoods and the economy. The pandemic has slowed economic activity. Real gross domestic product (GDP) growth fell to 2.9% in FY20, from 6.8% in FY19 as major trade partners faced a recession, travel restrictions choked the tourism industry, and the sharp decline in world oil prices stifled foreign direct investment inflows. Furthermore, the recession abroad and loss of employment reduced remittance inflows. Meanwhile, the partial closure of businesses and industries in the country disproportionally hit low- and middle-income earners and raised the vulnerability of the poor. The pandemic pushed between 1.1 to 3.2 million people into poverty, in addition to the latest official estimate of 8.7 million. The presence of 1.4 million refugees in Uganda—Africa’s largest hosting country and third largest in the world—also added to the enormous pressure of delivering essential services during this crisis period.
The World Bank provided $300 million in budget support to help mitigate the economic impact of the pandemic and protect the poor and vulnerable population. The budget support is part of a larger package of support to Uganda’s National COVID-19 pandemic response and was coordinated with other interventions in the country, including in health, water and sanitation, agriculture, environment, private sector development and job creation. The project complemented and leveraged support from other development partners including a Rapid Credit Facility of $490 million from the International Monetary Fund (IMF) delivered in May 2020 to strengthen the foreign exchange reserves position and finance the national budget.
Aligning National Development Priorities and Development Aid Effectiveness
The Development Policy Operation (DPO) is aligned with the Government of Uganda’s Vision 2040 to transform Uganda into a competitive upper middle-income country. The DPO is also consistent with the third National Development Plan which […]