4 January 2014

Ugandan Economy Will Remain Strong Despite Regional Instabilities - Bank of Uganda

The Central Bank of Uganda is optimistic that Uganda's economy will remain strong despite the instabilities in the neighboring countries of DR. Congo and South Sudan.

The two countries are strong trading partners with East Africa's third largest economy.

"It is true that if fighting in those countries continues for a long time our economy will be affected," said Adam Mugume, the executive director for research at the Bank, but quickly added: "But the fighting can't even reduce our GDP growth by 0.5%."

The two countries have for the past periods up to date been hit by civil strife, a development which analysts say is a threat to business and trade activities.

For instance, in South Sudan, over 150,000 Ugandan traders operate across the border, generating an estimated $900 million in business. South Sudan relies heavily on its neighbors to provide goods such as construction materials and services such as skilled and unskilled labor.

Available data indicate that 1,500 Ugandans work in South Sudan in the construction industry, and 1,200 Ugandan professional are employed there with non-governmental organizations, ministries and industries.

The two governments of Uganda and South Sudan have taken steps to strengthen economies ties, including a joint project to construct a state-of-the-art market in Juba, estimated to cost around US$850,000.

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