Kampala — THE BANK of Uganda Governor, Emmanuel Tumusiime Mutebile, has said the economic crisis that has plunged the west into panic will not affect Uganda's economy as analysts have predicted.

He was speaking in Kampala during the third national public dialogue on the impact of the global financial crisis.

He said there was no cause for alarm, adding that the country was fairly secure from the crisis.

"The immediate impact of the financial turmoil in the western world (on Uganda) is almost zero. The only notable impact is the shilling's low exchange rate," Mutebile said.

He explained that depreciation was due to a change in sentiments by investors, due to the stringent rules issued by the Bank of Uganda to commercial banks.

"Our banks have not been involved in sub-prime mortgage and toxic waste, which has incapacitated many banks in the West," Mutebile said.

He said although Uganda would experience a decline in tax remittance, exports and increase in prices, the impact on the economy's growth would be minimal.

His conclusion, he said, was in agreement with that of the International Monetary Fund (IMF).

The IMF representative in Uganda, Abebe Aemro Selassie, said stringent banking rules were shielding the country's economy from a decline.

"Some humility is in order. What transpired in recent weeks is the most severe event in history. We must cautiously move forward," Selassie cautioned.

"The country's economic growth will decline, but remain positive between five and seven percent."

Uganda's economic growth has been increasing steadily for over two decades, a trend that has been applauded by donors.

With the economic growth at 9%, the IMF has predicted capital flight, financial sector exposure and a credit squeeze resulting from lower external financing.