Uganda’s Economy To Grow By 5% – IMF

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Uganda’s Central Bank Governor Tumusiime Mutebile

The International Monetary Fund said on Tuesday Uganda’s  economy is set to expand by 5 percent in the 2012/13 fiscal year from 3.4 percent in the previous period, driven by falling lending rates and higher government spending.

This comes as good news for the East African nation whose growth rates declined in the 2011/2012 financial year to 4.1%.

“GDP growth is projected to increase to 5 percent this fiscal year, with core inflation averaging about 6 percent,” the financial institution said.

However, delays in planned infrastructure and Uganda’s problems with development partners could pose a risk to the growth prospects of the country according to the IMF.

Uganda’s infrastructure is wanting and the last two weeks have seen a host of European nations; Britain, Ireland, Norway among others cut aid to Uganda over graft in the government.

Uganda’s Central Bank has reduced the interest rates to 4.5% after a year of economic turmoil.

The financial body has however called on the government to improve its business climate and ensure effective use of its revenues it is to realize her 7% growth targets

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