Experts have given an above average ranking for Uganda’s economy saying the East African country’s business outlook is positive, despite an expected decline in the global economy.
Companiesandmarkets.com which rates economies all over the world said in their quarterly report that Uganda’s economy will continue to experience growth, in big part due to being domestically and consumer driven economy.
NRM leader, Yoweri Museveni Kaguta
The company says Uganda’s Gross Domestic Product growth forecast for 2010/2011 financial year is 7.2 percent, well above the United Nations set benchmark growth rate of 7% which developing countries must achieve if they are to stand any chance of achieving the Millennium Development Goals.
But the report says that While Uganda’s economy has experienced robust and stable growth over the past decade and is likely to continue performing strongly going forward, the business environment will remain challenging.
“One of the key themes in 2010 has been the persistent weakness of the shilling – a trend seen across East African FX. While we see little in the country’s fundamentals to justify the currency’s slide, fears over the euro have led many domestic players to buy dollars on a speculative basis to the extent that the euro is also losing value against the shilling, posing a risk to Uganda’s recovering export sector,” the report reads in part.
The new report also alludes to the persistent challenges posed by high levels of corruption in Uganda, a weak transport system, energy shortages and limited access to credit which are likely to remain as constraints on private sector investment in the short-to-medium term.
But as preparations for the 2011 Uganda general elections intensify, the report expresses worry that the conduct and outcome of the elections might affect Uganda’s economy negatively. Though incumbent President Yoweri Museveni of the National Resistance Movement is expected to win the 2011 Presidential elections, the report points to growing dissatisfaction with Museveni’s rule within Uganda, which it predicts will result in a challenged administration of both politics and the economy.