Corona Virus in China, Locusts attack to affect Uganda’s economy- BoU

By Olivia Nabaggala

13^th Feb 2020

The Governor Bank of Uganda Emmanuel Tumusiime Mutebile has said that commercial banks have betrayed him in regards to reducing interest rates.

Mutebile, who was reading the February monetary policy statement this afternoon, said very few banks have taken his advice but he continues to struggle with most of them so that they can reduce lending rates for Ugandans.

Bank of Uganda has for over the past year kept the Central bank rate (CBR), a single digit of 9% which would also be translated to commercial banks to lend to borrowers and investors at an affordable rate however commercial banks have kept the interest rate at 20% which is too high for most Ugandans.

Meanwhile, Mutebile said he expected the economy to grow at between 5.5% and 6% in the 2019/2020 financial year, below the growth; it posted in 2018/19. It is, however, in line with projections from other entities.

He said growth will be affected by the fact that Uganda’s exports have not grown fast.

Mutebile said the coronavirus in China and desert locusts reported in northeastern Uganda are also likely to affect the economy although he can’t tell how big the impact will be now.