By Rashiida Nakaayi
The Central Bank has cautioned that the projected expansion of the economy this financial year could be hit by slow economic activity.
According to the bank, the projected growth might take an unprecedented nose dive as a result of Uganda’s tensions with Rwanda, declining exports, and the trade impasse between USA and China and Britain’s uncertainty over leaving the European Union bloc.
BOU Governor Emmanuel Tumusiime-Mutebile told reporters in a press briefing this afternoon that “unresolved trade tensions” were now a big threat to projected growth.
According to Bank of Uganda records , Uganda exported goods worth up to USD 212 million (783 billion Shillings) last year to Rwanda, which earned USD 18 million (66 billion Shillings) in 2018 from Kampala.
Meanwhile, the Central Bank has maintained the central bank rate (CBR) at 10 per cent for the third time in a row. The CBR shows the direction of interest rates in the economy – when the CBR goes up, it means the economy is not doing well and commercial banks follow suit by raising charges on their money to cover the risk.
It is important to note that on last Thursday, Stanbic Bank Executive Director Patrick Mweheire said they had seen an economic turnaround in the second half of 2018 and that many businesses were coming back to borrow, a sign of optimism in the economy going forward.
