Ugandan macroeconomic outlook

Uganda's macroeconomic outlook is optimistic as the country continues to navigate regional market trends and identify key growth sectors. Ronald Seganyi, a Money Markets Trader at Stanbic Bank Uganda, shared insights on Uganda's economic landscape during a recent interview on CNBC Africa. With a focus on the IMF World Economic Outlook, Seganyi discussed the expected moderate growth for Africa in 2024 and highlighted regions such as East Africa and parts of West Africa as potential outperformers. He emphasized the importance of regional integration policies and the shift towards commercialization in driving growth. In East Africa, agricultural commercialization and the services sector are key drivers, while West Africa benefits from extractive services and elevated oil prices. These regions possess demographic advantages that lower labor costs and stimulate revenue generation for sustained growth. Moving on to inflation management, central banks have implemented effective monetary policy tightening measures to curb inflation, although supply-side challenges persist. Seganyi underscored the necessity for well-timed interventions to address supply-side pressures and maintain inflation rates. In Uganda, inflation is projected to moderate to 6.5%, with the Central Bank's current policies proving successful in achieving this target. The ongoing stability of the Ugandan shilling has been supported by factors such as commodity export receipts, remittance inflows, and foreign investment. While the currency remains strong, geopolitical tensions and global policy shifts pose risks to its stability. Seganyi anticipated the shilling to maintain its range-bound position in the near term. Concerns over rising debt levels in African countries have prompted calls for fiscal consolidation. Seganyi highlighted the importance of enhancing tax revenue mobilization and restraining expenditures in non-essential sectors to ensure fiscal sustainability without impeding growth. A balanced approach to debt management is crucial to mitigating financial risks and fostering long-term economic stability in the region.