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Terror attacks vs economic recovery

Economic recovery could be negatively impacted but that will depend on how the government handles the situation, experts say

| THE INDEPENDENT | Uganda’s economic recovery could backtrack due to the current terror threats and compounded Covid-19 hit, but experts believe, the government can still manage the situation.

The country has in the past one month experienced a wave of suicide bombings with the latest being twins near Central Police Station in Kampala and the other along Parliament Avenue, leaving six people dead including three bombers and scores injured on Nov.16.

Francis Kasirinyi, the acting executive director at Private Sector Foundation Uganda, said “we are extremely worried and only hope that the government manages the situation without adopting a panicky approach.”

He said the trick is about being vigilant and knowing who gets to their premises and for what reason.

Prof. Ddumba Ssentamu, an economist, banker and former vice chancellor at Makerere University, said insecurity of that nature definitely impacts business operations and the economy.

“New investors will fear to come here,” he said, “Even those investors that are here can easily be affected in a negative way.”

Faced with a tricky situation, Ssentamu said, the government should give confidence to the public that it is on top of this terrorism threat.

Similarly, Paul Lakuma, a research fellow in the macroeconomics department at the Makerere University based Economic Policy Research Centre said, the government needs to handle the situation in a manna that support the economy to recover.

He said, the new terror threats simply make the situation worse for the foreign direct investments that come with new investments especially in education, tourism and entertainment sector.

Uganda’s economy has been struggling since the outbreak of coronavirus and the included lock-down measures to contain its spread.

Latest data from Bank of Uganda shows that the country’s economic growth is expected in the range of 3.5%-3.8% in FY2021/22 up from around 3% recorded a year before. But with the new terror threats, the economic outlook remains uncertain.

Earlier, Prof. Emmanuel Tumusiime Mutebile had said the economy is expected to bounce back strongly to 5.5% – 6% in FY2022/23, increasing to 6.5-7.5% in the medium term riding on the increase in the Covid-19 vaccination and easing of the health related restrictions.

He said the rebound of economic activity was to be sustained by an acceleration in private consumption, strong growth in external demand, a gradual return of tourism, foreign and private domestic investment in the oil sector.

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