Announcement of Uganda to Receive Second Reconstruction Credit from IDA on May 27, 1982

' . . · ·FOR fMMEDIATE RELEASE aWorld Bank [ 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 IDA NEWS RELEASE NO. 82/78 Contact: Pushpa Schwartz May 27, 1982 (202) 477-5306 UGANDA TO RECEIVE SECOND RECONSTRUCTION CREDIT FROM IDA Support for economic recovery in Uganda will be continued through a $70 million credit, the International Development Association (IDA) an- nounced today. In June 1981, the Uganda Government introduced a financial program to revive the depressed and faltering economy. This program. which involved floating the Ugandan shilling, removing administered price controls, increasing agricultural producer prices, utility tariffs and interest rates,and reforming taxation, has helped start an economic revival. It was supported by an IMF stand-by arrangement and by reconstruction assistance from IDA, the World Bank's affiliate for concessionary lending. This first round of assistance, $72.5 mil- lion was approved in 1980. As a further step, the Uganda Government announced a two-year Recovery Program in April 1982, designed to channel domestic resources and external assis- tance into sectors and projects most likely to raise production and improve the country's foreign exchange position. Priority is to be given to the production of export crops, basic consumer goods, building materials,and agricultural inputs, and the improvement of transport and communications. Resources will be concen- trated on the most urgent rehabilitation needs. The Recovery Program was also the government's basic document at a Consultative Group meeting, convened by the World Bank on May 18 and 19 in Paris. The government will use the IDA credit over a nine-month period to finance the importation of essential agricultural inputs, spare parts, and raw materials necessary to stimulate production in line with its Recovery Program. The program will aiso strengthen the government's capacity to formulate and implement policies and programs in the critical areas of pricing and marketing of export crops, administration, planning and foreign exchange allocation, semi- public organizations, and external debt management. The IDA credit is for 50 years, including 10 years of grace; it carries no interest but bears a small annual service charge of 0.5% on the undisbursed balances of the credit, and 0.75% on the disbursed balance. NOTE: IDA credits are denominated in SDRs (Special Drawing Rights), which are valued on the basis of a 11 basket" of currencies. The U.S. dollar equivalent of the SDR amount of the IDA credit reflects the exchange rates existing at the time of negotiation of the credit.