22 January 2013

Uganda to Grow At 6 Per Cent - World Bank

The World Bank estimates that Uganda will record one of the fastest economic growth figures in East Africa, estimating it to be around six per cent over the next three years.

In its recent Global Economic Prospects report, the bank reveals that East Africa's largest economy Kenya could grow at an average of five per cent. Tanzania and Rwanda are expected to average seven per cent over the next three years while Burundi will record a modest 4%. The World Bank believes the growth figures will be higher in countries that have discovered mineral deposits.

The WB's predictions come after the African Development bank recently estimated that sub-Saharan Africa is expected to record an average gross domestic product growth of 6% this year. However, the estimates come with caution. The ADB predicts an uncertain global economic outlook. In the Global Economic Prospects report, the WB urges developing countries to focus on beefing up their economies and reducing their dependency on developed countries for investment and funding of their projects.

The WB emphasizes that developing countries must build their local markets and guard against the "risks from the Euro area and fiscal policy in the United States."

In a statement, the WB group president is quoted saying: "The economic recovery remains fragile and uncertain, clouding the prospect for rapid improvement and a return to more robust economic growth.

"Developing countries have remained remarkably resilient thus far. But we can't wait for a return to growth in the high-income countries; so, we have to continue to support developing countries in making investments in infrastructure, in health, and in education. This will set the stage for the stronger growth that we know that they can achieve in the future."

In 2008, the global financial crisis impacted on Africa's growth prospects as net capital inflows into the continent reduced. China has invested heavily in Africa, reviving the continent's growth prospects. Even then, the WB calls for caution over China's investments.

"With Chinese demand accounting for some 50 per cent of many industrial metals exported from Africa, a disorderly unwinding of China's high investment rate could curtail growth in the region by 0.3 percentage points with current account and fiscal balances deteriorating by 0.6 and 0.3 percentage points respectively."

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