Uganda's economy remains steadfast, says latest BOU report
Even without a governor at the helm after the fall of the longest serving banking executive on the continent, Prof. Emmanuel Tumusiime Mutebile, the bank has remained steadfast, on its mandate of maintain macroeconomic stability.
According to the bank’s performance report of 2022/2023 period, inflation among other metrics has been maintained below the macroeconomic target of below 5% in comparison to her regional counterparts.
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A performance report for the year 2022/23 indicates that the bank reigned over an economy with currency in circulation of shs 7.3 trillion, foreign exchange reserves of $4.07 billion , and a resultant of 4.15 months of import cover, remaining strong with total assets of shs27 trillion with shs264 billion of core capital.
Economist David Walakira makes sense of these performance metrics, " The bank has performed well, on some metrics but on the parameter of inflation, it is largely driven by factors beyond the central bank’s control. “
With a major mandate of maintaining macroeconomic stability through sound monetary policy, the central bank, had the central bank rate of 10% through 2022,2023 with headline and core inflation at 8.8% and 7.4%.
“ Our inflation here is largely seasonal driven. The Central bank rate of 9.5% doesn’t translate easily into driving the prices of capital down. The inflation targeting done by the bank is on assumption that the prices of credit will reduce , but how many people are banked,” Walakira remarked .
On the front of supporting businesses through special funds it manages, shs818 billion was extended to farmers through Agricultural Credit Facility, while 1,129 applicants benefited through the Small Business Recovery fund.
Economic experts say that more needs to be done to uplift the Ugandan economy.
“ The bank should now play more in the space of ensuring that there is steady supply of foreign exchange that is used to buy petroleum products such that the fuel price doesn’t rise so high," Walakira said.
The regional outlook on the inflation as of September 2023, puts Uganda ahead of her peers as the annual inflation is at 2.7% up from 3.5%, Kenya at 6.8% up from 6.7%, Tanzania maintained at 3.3% Rwanda from 17.4% up from 17.3%.
There is hope that Uganda will reach 6% economic growth rate for this calendar year if the downside risks remain subdued.
