- East Africa
- United States
- Trade - Finance
Wall Street crisis traps Uganda
A blow to economic growth and poverty diminution
According to reports emanating from Kampala, Uganda, the economic hold back in the US and Europe could naturally affect demand for Uganda’s export.
Coupled with the cross effects of the on-going price hikes in oil and food-commodities, it is feared that the harsher external environment in the pressing period will unavoidably place downward pressure on Uganda’s growth prospects.
The government is of Uganda is also worried that the economic growth and poverty diminution efforts will be harmfully affected when the country begins to suffer the effects of the current global financial crisis.
Governor Emmanuel Tumusiime Mutebile, of the Bank of Uganda, commenting on the financial system and international financial crisis and its impact on Uganda’s economy said yesterday that the global economic slowdown is expected to trim down inflows of aid, private remittances, reduce interest rates amongst other harmful outcomes.
Mr Mutebile told journalists that while direct exposure to the financial crisis is very limited, Sub-Sahara African financial markets remain susceptible. Consequently, perceived risks of protracted US slowdown or even depression would mean Africa’s and in particular Uganda’s growth thrust may be affected.
In an unrelenting build up of bad debt pressure on stock markets across global financial cities, one of Americas Wall Street leading and oldest investment bank - Lehman Brothers, collapsed more than 10 days ago due to bad debts and it almost brought down the world’s largest insurance company and financial services provider - the American Insurance Group (AIG).