- According to a report by the Bank of Uganda(BOU), due to the opening of most sectors in 2021, Uganda’s economy performed better in 2021 compared to 2020.
- With the economic activity picking up on easing of the lockdown measures, lending to the Private Sector also increased in the quarter ending October 2021.
According to a report by the Bank of Uganda(BOU), due to the opening of most sectors in 2021, Uganda’s economy performed better in 2021 compared to 2020. With the economic activity picking up on easing of the lockdown measures, lending to the Private Sector also increased in the quarter ending October 2021. The value of loans approved rose to 2.76 trillion shillings from 2.18 trillion in the quarter ending July 2021 recording a growth of 9.2 percent. The highest private sector credit growth was recorded by manufacturing, Real Estate, and Personal loans, while growth was slower for Agriculture, Trade, and Business sectors. The Bank’s Monetary Policy Report for December revealed that though the international trade is yet to get to the pre-covid 19 levels, there has been an improvement lately, especially from coffee and gold.
But as the Pandemic enters its third year global economic uncertainties are likely to continue into 2022 leaving negative effects on the Ugandan economy next year. The BOU Monetary Policy Report pointed out that though global economies have been recovering, the trend will neither be stable nor uniform. A slowdown in the growth is predicted due to the spread of Omicron leading to supply chain disruptions and a fall in demand. The slowdown in China and the lockdowns and border closures on account of omicron virus strain could have an impact on Uganda’s economy.
The Report also raised apprehensions about the possible tightening of monetary policies by the developed economies that could lead to tightening financial conditions in developing countries including Uganda.
