Uganda – Washington Consensus Guinea Pig

The NRM government came to power in 1986 and inherited an economy that was in shambles. Uganda had an external debt of $1.2 billion, massive inflation that rose to 250 percent in 1987 and a GDP that was declining at 5.5 percent while money in circulation had increased by 90 percent. Uganda needed immediately $160 million for emergency relief and rehabilitation programs and $4 billion for rebuilding the shattered economy. The treasury was empty and the tax base almost non-existent. International support was therefore not only absolutely necessary but also needed very urgently. At the same time the government faced a very delicate security situation that needed top priority attention.

For eighteen months, NRM government avoided dealing with World Bank and IMF because it had criticized them for the harsh conditions they imposed on Uganda during Obote II regime. The government tried to bypass them and deal directly with bilateral donors to no avail. The British government representative who sounded the views of other major donors advised the government to enter into an agreement with the IMF first before donors could assist.