Lawrence Bategeka, the acting principle and research fellow at the Economic Policy Research Centre at Makerere University has urged all players of the economy not to repeat the wrongs committed in the past year so we can have a better 2013.
Bategeka told The Independent in an interview that Uganda needs to avoid protests like the walk-to-work protests and the strikes similar to those staged by traders last year, which all paralysed the economic activity in 2012.
He also said that government needed to fight corruption to zero levels so that actions like aid cuts by donors that negatively affect the local unit can be avoided. He added that the central bank needed to implement an accommodative monetary policy that can make it easy for people to access credit from commercial banks for investment purposes.
The economist said Uganda's economy would shine in 2013 if the Congo crisis is settled. He said South Sudan, one of the chief importer of Ugandan goods needed to increase its demand so that the latter can earn foreign exchange and strengthen the shilling. He advises the government to spend resources on productive sectors like agriculture, industry, manufacturing and infrastructure among others to increase output on the local and foreign market.
"Above all the people need to be mobilised to work in productive sectors instead of staying idle," Bategeka said, adding once all these factors play towards the right direction, we will have a better year.
The country's year-on-year inflation marginally went up in December to 5.5% from 4.9%, a month earlier partly due to the increased demand for goods and services over the festive season, authorities said.
The Central Bank official told the press on Jan.3 in Kampala that the shilling traded from an average of Shs2, 446.9 per dollar in 2012 compared to Shs2, 673.6 per dollar in 2011. The Shilling started depreciating in the second quarter of 2012 (in October, November and December) following a pull out of offshore investors and the sudden aid cuts to Uganda over corruption reports in the office of the Prime Minister.
The Shilling hit a low of 2,710/2,720 in mid-November as a widening current account deficit, aid cuts and falling yields on government debt piled pressure on the it.
The central bank kept the central bank rate for January unchanged at 12.0% arguing core inflation will remain in the targeted levels of between 5-7% throughout the year. The Bank said it expected commercial banks to continue cutting lending rates to boost the demand for credit for those that want to invest in productive ventures to boost economic growth.
The country's economy grew somewhat well at 5.2% for the period ending December, 2012 compared to 3.2% growth recorded for the financial year 2011/2012.