Regional Economic Growth Hits Record Low Amid Drop in Oil Prices

Bank of Uganda Deputy Governor Louis Kasekende (2nd R), IMF's
Regional Director for Sub Saharan Africa Antonette Sayeh (2nd L) and
State Minister for Finance Fred Omach (L) at the launch of report at Serena Hotel on Tuesday

The International Monetary Fund (IMF) has recommended review in economic policies to turn around the economic growth in Sub Saharan Africa, search said to be experiencing a record low. According to IMF’s economic outlook report released on Tuesday, this the region’s growth fell to 3% in 2015 the lowest level in 15 years and projects further decline this year.

The slowdown is majorly attributed to the decline in commodity prices especially for oil producing countries like Angola and Nigeria, cialis 40mg Ebola epidemic whereas other economies were hit by severe drought. Oil importing countries are however fairing slightly better with growth of 5% supplemented by infrastructural development and strong private sector.

Antonette M. Sayeh, the IMF Regional Director for Sub Saharan Africa who spoke at the launch of the report in Kampala on Tuesday said that fiscal adjustment is required for both oil exporters and the others.

“Oil contributes 50% of the region’s GDP and the low oil prices have had a sharp effect with only 2% expected growth, far below growth rate between 2010 and 2014. Central banks must limit direct government financing and revenue mobilization needs to be strengthened,” said Sayeh.

She noted that further risks like prolonged drought and intensification of security challenges are likely to persist.

Bank of Uganda’s Deputy Governor Louis Kasekende observed that Uganda like its counterparts Kenya and Tanzania have employed deliberate monetary policies to maintain inflation in single digits. Kasekende also said that the reduction of primary goods in comparison with increased processed exports Uganda is good for such a delicate period.

“We need to rebuild buffers that will save us during the next economic crisis which is more likely. Further attention should be placed on regional integration and building strong and independent
institutions,” said the Deputy Governor.

Former Finance Minister Dr. Ezra Suruma expressed worry that rampant unemployment in the case of Uganda hasnt been given attention yet could further worsen the economy. In his view, efforts to
industrialize must be supported by an educated workforce.

With the increasing risks facing oil producing countries which Uganda is set to join, IMF suggests that countries in Sub Saharan Africa must look to diversifying their sources of income including

The launch attracted different key figures in the financial sector including State Minister for Finance Fred Omach, Governor Bank of Uganda Tumusiime Mutebile, former Finance Minister Maria Kiwanuka and
Secretary to Treasury Keith Muhakanizi among others.



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