IMF settles Uganda plane row

Buying a Gulfstream made "economic sense"

By Jeff Phillips in Washington

The International Monetary Fund has agreed to relieve Uganda of some $640m of debt, despite a controversy over the country's decision to spend $35m on a private aircraft for the exclusive use of President Museveni.

The decision to grant the debt relief had been delayed to give Uganda the chance to explain the purchase, which had not been disclosed to the Fund and was revealed only when the relief decision was about to be announced.

The decision has also to be endorsed by the World Bank and the African Development bank, but these are regarded as formalities.

A good reputation

Uganda has enjoyed a reputation among foreign creditors as one of the best-governed states in Africa and deserving of special debt relief.

But when it was announced that President Museveni was to buy a Gulfstream aircraft for his exclusive use, some senior IMF officials objected.

They rebuked Uganda for not previously revealing the purchase and wondered why a poor African state should enjoy the luxury of a private aircraft for its president, when heads of state of much richer countries did not.

The revelation was an embarrassment for the Fund, which had hoped to announce the debt-relief during the recent Spring meetings as the first fruits of its high-profile initiative to help highly-indebted countries.

Cheaper in the long-run

At a Fund meeting on Monday, African representatives said that while $35m seemed a lot, it would be cheaper in the long run than hiring aircraft from South Africa - which is the current practice.

The hired aircraft, they pointed out, had to fly four hours in each direction, perhaps for only one or two hours of flying in Uganda.

Uganda has also tried to reassure the Fund that spending on the aircraft would not affect poverty relief programmes in the country.

The World Bank is expected to endorse the decision on Tuesday, with the African Development Bank agreeing by June.