PRIVATE SECTOR GROWTH HITS 10.5%: Naava Nabagesera

Uganda's private sector has greatly picked up currently standing at 10.5 percent after five years of sluggishness. This, according to the Bank of Uganda Deputy Governor Dr. Louis Kasekende is thanks to a decline in the Central Bank Rate (CBR) and availability of sufficient capital with all banks meeting the regulatory capital adequacy as of June 30 2018, the 10.5 percent growth rate a significant rise from 2.8 percent just nine months ago in November 2017. With the CBR currently at 9 percent, commercial banks' lending rates are projected to continue declining in line with the Central Bank's directive which has already seen shilling denominated loans average a rate of 17.7 percent which according to Dr. Kasekende is the lowest in more than a decade. He went on to commend banks' heed on the call to reduce lending rates and asked them to continue seeking efficient gains in operations and subsequently passing them on to customers in the form of lower lending rates.

Between 2011 and 2018, interest rates have greatly fluctuated with a record high of 23 percent in November 2011 and February 2018 recording a record low of 9 percent. The decline in the lending rates will likely result in credit growth in the private sector. Most commercial banks have cut their prime lending rates, a clear indicator that the Central Bank's rate cuts are having a domino effect on both the banking sector and economy as a whole. Despite the shocks the economy has had in the recent past that has seen the shilling fluctuate, experts still project a steady growth in the private sector with industrial and service sectors leading the way.

Despite global prices of major imports and exports such as petroleum regularly triggering fluctuations in the economy, Uganda's economy looks well positioned in this second quarter, following a solid first quarter expansion which was fueled by the ever expanding service and industrial sectors. The recent unrest in parts of the country has also not negatively impacted Uganda's investment potential and economy as a whole. The country continues to provide a good atmosphere for investment in various sectors for both local and foreign investors.