From All Africa:
“Uganda’s economic woes do not seem like they are about to end if the ongoing drought in some parts of the country continues. According to Mr Matia Kasaija, the finance minister, the ongoing drought in several parts of the country is the largest threat to the projected growth in the economy of five percent.
“This drought is very severe. We were discussing this in the cabinet meeting on Wednesday. The rains came, we all got excited in November but now we see that it is slowing down. If nothing is done, it will be a serious impediment to our growth,” he said during the East African Economic Round Table at the Kampala Serena Hotel on Thursday.
Uganda’s economy in the last financial year grew much slow than had been projected due to factors around high inflation, high borrowing costs and a depreciating Uganda Shilling. The economy grew by just 4.8% in 2015/16. The projection for the current financial year is five per cent. However, with drought, this affects food production, resulting in high inflation rates. Due to a shortage of food, prices of commodities tend to surge and that also means Bank of Uganda (BOU) would have to step in to control any sudden rise. This has the potential of hurting growth.”