The Bank of Uganda has warned of adverse shocks to Uganda’s economy if the fighting in South Sudan continues.
Central Bank officials noted that given South Sudan’s importance to Uganda’s economy, serious fighting is reported to be going on, sending warnings that previous business transactions will not be fully restored soon.
Observers also note that South Sudanese people are interested in ending the conflict sooner rather than later and to have Ugandan business people back because they desperately need supply of essential goods and services, most of which come from Uganda.
On the other hand, Kasekende expressed confidence that consumer demand in Uganda which has been very weak in recent months, has shown signs of recovery as evidenced by a sharp increase in private sector lending by commercial banks.
Kasekende said that Private Sector lending increased sharply to 38% in January compared to 6.6% in January 2013.
