Experts at the Stanbic Global Markets Economic Forum are calling for deepening of financial markets in Uganda, as well as appropriate policy interventions to develop the agricultural sector so as to meet the new world order.
A Stanbic Bank Study shows that oil investments spending in Uganda carry with them a fortune as the GDP is expected to grow at 6.0% in FY 2022/23 and forecasted to grow at 6.5% and 6.8% in FY 23 /24 some changes in the outlook such adverse weather conditions remain the way
The Ugandan shilling against the dollar may be more reliant on portfolio inflows going forward, as gold exports become more important following the revision of the 5% export levy on refined gold and 10% of unprocessed gold to flatten the rate of 100 USD of 5% of the value of every kilogram me of gold exported
The Ugandan Current Account could widen in 2023 but a more measured pace estimated at 9.3% of GDP in 2023 from the previous 11.8%
This complex and highly risky context was the subject of discussion for the private sector gathered experts at Serena Conference hall for the Stanbic Financial Markets Economic Forum.
Dr. Michael Atingi Ego the Deputy Governor Bank of Uganda said that, “The foreign reserves at BOU have reduced from 4.5Billion dollars to nearly 3.5 billion dollars. This was due to interventions in the money markets to ensure foreign exchange stability, but the Bank of Uganda is fully committed to ensuring macro economic stability as our mandate”
While experts believe that underlying inflationary pressures have started to cool, Upside risks to inflation outlook stem primarily from a weaker Uganda shilling and any further delays in securing funding for budget support may weigh down the foreign reserves.
Dr. Fred Muhumuza, an economist, believes that there several ways to beef up the reserves, leveraging not only oil and gas, but other precious minerals
”Let us not only think of oil revenues, we have a lot more potential here, agriculture support is welcome but supporting the value chain to ensure that roads carrying produce to the market is good , the seeds are drought and pest resistant among others . Unless we fund the parish Development Model , it will remain another case study,“ Muhumuza said in a panel discussion.
Because of the low budgetary funding to agriculture, a sector that employs over 65% of the country’s population, and only shillings one trillion earmarked for the parish development model for the next financial year, experts have suggested making agriculture great once again.
Jibran Qureishi, an economist, said that “ I have come to Uganda many times for the last 11 years and I have said it time and again that make agriculture great once again by supporting farmers , buy inputs , boost savings and make the economy resilient “
While boosting savings and making the economy more robust through deepening financial markets and inclusion remain a guarantee to ultimate resilience, anything devastative could still happen
Anne Juuko, the CEO of Stanbic Bank Uganda, says that much as the forum is good platform for triggering such debates, what is more important is what happens after the forum . Juuko noted, “Risks are inherent of every environment and that is where we come in. Come lets us talk on a bilateral basis.”
The bank that has since partnered with village SACCOS to extend funding of up to 1 million dollars to farmers at a 10% interest rate believes that this will supplement government efforts of the Parish Development Model.
In the new world order, business men and women ought to be more cautious as there is no assurance of a better day tomorrow.
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