Aircraft row settled to allow debt relief

The IMF and the International Development Association (IDA) - the ‘soft loan’ window of the World Bank - have agreed that Uganda has met the conditions to qualify for some US $1.3 billion debt relief under the enhanced Heavily Indebted Poor Countries Initiative (HIPC). An IMF press release noted the government pledged that its controversial purchase of a US $36 million jet for President Yoweri Museveni would not affect poverty-reduction programmes. Uganda reaffirmed that, “in order not to jeopardise its poverty-reduction programme, the government will wholly offset the recent payments related to the purchase of a presidential aircraft by cuts in defence and other non-wage expenditures,” the press release stated on Tuesday.

The boards of the IMF and World Bank last month delayed granting full debt relief to Uganda because of strong objections to the purchase of the presidential aircraft. The World Bank relief will cover about 54 percent of debt service falling due to the IDA each year over the next 20 years, while the IMF relief will cover an average 50 percent of existing obligations over the next 10 years, Tuesday’s press release stated.