The recent 5th Stanbic Uganda Economic Insights Symposium held at the Kampala Serena hotel brought together leading economists and policymakers to critically examine the theme “Globalization reshaped: Riding the waves of economic shifts.”
The event highlighted the intricate ways in which global economic trends are reshaping Uganda’s economic landscape. In his opening remarks, Francis Karuhanga, chief executive, Stanbic Uganda Holdings Limited (SUHL), reminded the house of the key takeaways from the previous edition emphasizing that these sessions are very vital for economies to thrive.
“Last year, we were in this same space, discussing global crossroads reimagining business, a theme that gave huge to the geopolitics landscape. What we see now, the Ukraine war has lasted more than we thought. How about the changes at the White House, we talked about their impact prior, here we are today taking a fair share. Even if we zero to the regional level, you all can see what is happening in the DR Congo.”
Karuhanga called upon the public and all the stakeholders to prioritize taking resolutions coming from expert sessions like the Stanbic Economic Insights Symposium seriously because they shape policy and economic landscape.
The session comes at a time when Uganda has been earmarked as one of the countries in Africa prospected to see a Gross Domestic Product (GDP) growth rate above six per cent, almost double the estimated average rate for the whole continent.
Christopher Legilisho, Stanbic bank senior economist, noted that regardless of the global shocks, Uganda is still a strong economy and one of the primary driver of this growth will be investments in the oil and agricultural sector.
“I would like to mention that we also have a strong system in 2025. So, we think we have seen strong growth across the East, quite stable. We have also seen stability in Kenya and a modest depreciation in Tanzania. Coupled with a surge in exports of refined gold and higher earnings from coffee, Uganda’s economy has appeared to have largely recovered from the negative impact of the Covid-19 pandemic. However, how is it likely to play out on the regional level, with already peeping negative impacts of the withdrawal of aid from development partners like USAID,” he said.
He added that it’s the right time for the governments to step up because the developmental metrics will likely be dented because of that withdrawal of aid.
“Governments may need to borrow more or increase taxes just to cover for the deficit from the withdrawal of U.S. aid. And if there is anything that they could do to support that particular sector, the non-governmental sector, I think that would really help, to just help those who have been impacted by the shock of job losses. ” Dr Adam Mugume, director of Research at the Bank of Uganda, built on this theme by presenting a robust analysis of the country’s monetary policy framework against the fiscal policy.
Drawing from his extensive experience, he highlighted the critical need for Uganda to adapt its economic strategies to align with evolving international standards, echoing a call for agile monetary policies capable of responding to global uncertainties.
He, however, expressed confidence that as along as the environment does get more volatile, the central bank is at its best to salvage the economy and drive it to the Promised Land.
“Handling the economy is like driving a small car on a pothole road with very many users like boda boda and other reckless road users. Regardless of whether the car driver knows how to drive at a terrible speed, he/she might be forced to slow down, even drive at a speed of five kilometers per hour because if he chooses to drive at a fast speed, the car may get damaged, thus ending up not reaching the preferred destination. As the central bank, we are aware of these prevailing conditions on our economic highway like the debt burden, climate change, the election time and the wars in our neighboring countries. We are on top of the game so that our small car doesn’t fall in the potholes along the way.” Dr Mugume impressively explained.
The symposium also featured remarks from Sébastien Walker, IMF country representative for Uganda, who offered a global perspective. Walker discussed how Uganda could capitalize on international partnerships and economic diplomacy.
He reassured participants that while challenges exist, numerous opportunities to innovate and attract investment remain, particularly as the country positions itself within the global economy.
On speaking about Uganda prevailing economic hardships, Dr Fred Muhumuza, an economic researcher and lecturer, highlighted the necessity of a multi-faceted approach to development. He stressed the importance of collaboration among government agencies, the private sector, and civil society in creating a supportive environment for sustainable growth amid changing global dynamics, reinforcing the idea that joint efforts are vital for addressing economic challenges.
“Our tax-to-GDP ratio is approximately 13% and has a lot of room to grow but there are important things that need to be done to enable Uganda’s sustainable development. Our current monetary policy is really working against tax mobilization and growth. And it’s a debate to the economists out there, at what point should I stabilize the economy. There is very little aggregate demand in the economy because we want to solve the inflation issue, this is not just a bank of Uganda issue but a fiscal policy issue.” Muhumuza noted that the economy also works like a human body, where regardless of the fact the brain is not the biggest body organ, but it needs sufficient blood supply for the rest of the body parts to function properly.
“Ugandans need to see enough money in the economy, and the question is this: is money all locked in the central bank? This is honestly not true! But we currently have over Shs 9 trillion locked in the judiciary as bail money, this money is not benefiting Ugandans because there is no return on investment being realized. The government needs to scale down the fiscal deficit caused by treasury bids and bonds, where we end up in a deficit trying to refinance them.”
He added the need for diversification in sectors such as agriculture, technology and services to bolster economic resilience, moving forward.