200810242216 | Global financial crisis to affect Uganda's growth - Suruma Ezra

Global financial crisis to affect Uganda's growth - Suruma Ezra

The global financial crisis will reduce Uganda’s growth and earnings from exports, tourism and remittances from abroad, government has warned. Finance Minister Dr Ezra Suruma told Parliament that while Uganda is not directly exposed to the risk, the crisis could lead to a reduction in money remitted by Ugandans in the Diaspora, aid flows from donor countries, and foreign direct investment into the country.

The minister’s statement came a few hours after Central Bank Governor Emmanuel Tumusiime-Mutebile told a press conference, called in the wake of the shilling’s slide against the US dollar, that the global economic woes would slow Uganda’s growth.

“We expect the recession in Europe and the US to reduce demand on our exports. This will lead to less earnings from exports, earnings from tourism are also going to be affected,” Mr Mutebile said. “Tentatively, I can say that instead of the 8 per cent growth rate, it will be in the range of 5 or 6 per cent.”

The global financial crisis, triggered by risky loans given to US borrowers and sold on across the world, has been raging for several months mainly in the developed world. Mr Mutebile told a press conference on September 24 that while there was need to be concerned, the effects on the Ugandan economy would be minimal.