KAMPALA - Uganda's economy is seen expanding at 7% in the financial year starting July from an estimated 6% in 2023/24, partly driven by oil sector investments, the International Monetary Fund (IMF) said.

The east African country also has immediate access to a total of $120 million under the IMF's Extended Credit Facility (ECF) window after it completed a fifth review, the fund said in a statement late on Wednesday.

Uganda's credit facility, worth about $1 billion, was approved in 2021 and with the latest disbursement it will have drawn about $850 million.

It was among other objectives at the time aimed at helping the country of 45 million people overcome the effects of COVID-19 and boost private sector production.

With Uganda due to start pumping crude in 2025, growth in 2024/25 would be partly driven by oil industry investments, the IMF said.

Uganda's economic outlook, however, was clouded by the possible effects of its tough anti-homosexuality law on investor sentiment, it added.

"The passing of the Anti-Homosexuality Bill, 2023 (AHA) could negatively impact foreign investment, loans, and grants, as well as tourism," the IMF said.

The Anti-Homosexuality Act passed last year imposes a range of penalties including death and life imprisonment for various same-sex acts.

(Reporting by Elias Biryabarema; Editing by George Obulutsa)