The Observer (Kampala)

19 January 2014

Uganda: Mutebile Hits Back At Standard and Poor's

I am disappointed that Standard and Poor's has lowered Uganda's long-term credit rating to B from B+, which appears to be incongruous with the marked improvement of the macroeconomy over the last 18 months.

Real GDP growth has risen and is forecast to be above six per cent in the current fiscal year. Annual core inflation has fallen and is now close to our medium-term policy target of five per cent. Large overall balance of payments surpluses were recorded in the last two fiscal years, and a surplus is also forecast for the current fiscal year.

Although public debt is rising to accommodate the need for infrastructure investment, overall public debt levels remain well within the internationally-recognized thresholds for debt sustainability.

Therefore, this lowering of the credit rating is not warranted by an objective analysis of the Ugandan economy.

- Prof Tumusiime Mutebile, Governor Bank of Uganda

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