Razia Khan, the Africa economist for the bank, told reporters on Wednesday that there was likelihood that money charged on loans for businesses will remain high but government push to be seen investing in infrastructure projects towards elections will push the growth up.
Uganda’s economy has been given a clean bill of health with the
economy expected to expand by at least 6% in 2020, according to Standard
Chartered bank outlook.
This is despite the fact the country is going into an election year where some
investors regard it very risky and will likely withhold their money until
Razia Khan, Chief Economist for Africa and Middle East for the bank, told
reporters on Wednesday that there was likelihood that money charged on loans
for businesses will remain high but government will push to be seen investing
in infrastructure projects towards elections which will push the growth up.
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The Stanchart prediction rhymes with predictions from other organizations like
the World Bank and the International Monetary Fund that has shown Uganda will
grow at above 6%.
On the likely challenges, Khan said the uncertainty relating to the final
investment decision (FID) for the oil sector to take off will remain with
investors unsure of what to do next.
This will lock out money from coming to the country. Also, she said, 2021
elections will be a big factor with some investors withholding their money
until after the polls.
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For the major East African economies – Kenya and Tanzania will also grow in the
same range with Uganda. However, Stanchart says the impact of locusts will be
immense if it spreads through the region.
This means locusts will cut on agriculture production and consequently growth.