Absa Bank Uganda has predicted Uganda’s faster economic recovery from the Covid-19 lockdown owing to the country’s investment in the oil and gas pipeline and good monetary policies.
David Wandera, the head of financial markets at Absa Bank Uganda, said while Uganda’s economy is struggling at the money, the outlook is positive.
He said Uganda’s favourable climate for agriculture, Bank of Uganda interventions to stimulate borrowing and the recent developments in the oil and gas sector will promote faster economic recovery.
“The developments in the East African Crude Oil Pipeline means that a lot of businesses that were dormant are being given tenders, and with the expected signing of the Final Investment Decision at the end of the year, this could prove to be a transformative period for Uganda,” Wandera said during a virtual conference about the Absa East Africa Macro Outlook for the second half of 2021 last week.
This comes after Bank of Uganda (BoU) maintained the Central Bank Rate (CBR) at 6.5 percent to stimulate the economy that is reeling from the effects of the second Covid-19 induced lockdown.
BoU Governor Emmanuel Tumusiime-Mutebile said the second Covid-19 wave and the associated containment measures have interrupted the economic recovery.
“Economic growth is expected to noticeably slowdown in the quarter to September 2021 due to the pandemic containment measures. Indeed, high-frequency indicators of economic activity indicate that the momentum of economic activity for the quarter to July 2021 subsided,” he said on Thursday, 12 August 2021.
BoU has said the economy can steadily recover if a bigger population is vaccinated against Covid-19. The country plans to vaccinate 21.9 million people against Covid-19 to safely reopen the economy, but it has only managed to get 1.7 million doses of vaccines through donations.
But Ridle Markus, the sub-Saharan macroeconomist at Absa Group, said that in spite of this, East Africa is expected to record the fastest growth cycle compared to West Africa, the islands and southern Africa because there are sectors in the region that will further push growth in the economies.