Fitch Ratings has recently upgraded Uganda’s credit standing from stable to positive, according to a New Vision report. Economic growth in the country has blossomed due in part to the efficient practice of macroeconomic management.
As a result of the rating boost, the Bank of Uganda will soon issue $403.6 million worth of treasury bills designated to cover eight percent of the country’s national budget, according to the report.
“The decision by Fitch Ratings to revise Uganda’s credit rating upwards from stable to positive is a vote of confidence in the quality of Uganda’s macroeconomic management and the prospects for our economy,” Emmanuel Mutebile, Bank of Uganda governor said. “It is only because we have been able to control inflation and maintain fiscal discipline that Uganda has a long track record of robust economic growth.”
New Vision noted that Uganda’s new ‘B’ positive credit rating signifies fiscal stability. Furthermore, it isn’t likely that the economy will experience a backward trend. With the highest level-11 rating being ‘AAA,’ Uganda ranks 6th best on Fitch’s rating scale.
According to the report, Uganda’s $633 per capita GDP, business environment and human development levels need improvement. The Bujagali hydropower station, sharpened monetary policy, and better exportation performance, however, has contributed to economic growth and countered Uganda’s shortcomings.
“Commitment to a flexible exchange rate and an open capital account has enabled the economy to adjust to disruptions more quickly than its peers,” a Fitch statement said.
Two-thirds of the population has been lifted “out of abject poverty,” the statement continued. For “more than a decade,” economic growth has averaged seven percent.
Uganda’s GDP is expected to reach seven percent by 2015 and six percent this fiscal year — a step up from the previous 5.1 percent, New Vision reported. In addition to debt comprising 9.1 percent of GDP, Uganda’s foreign aid dependency shave from 40 percent in 2002 to 12 percent in 2012 has also made a substantial and positive impact on the economy.