Uganda: aid withheld after IMF PSI decision

5 April 2011

As the IMF refused to sign off on Uganda’s first review of the Policy Support Instrument (PSI, see Update 71) in mid February, fears mounted over declining donor support. An IMF spokesman said Uganda’s macroeconomic policies were “inconsistent” with objectives under the PSI, agreed in May last year. The Dutch government is currently withholding about €3.2 million ($4.5 million) in budget support to Uganda as a result of the IMF’s decision. Soren Ambrose of NGO Action Aid International said, “With controversies persisting around IMF programmes, donors should be careful to not give the Fund more power by linking their aid disbursements to its programmes.”