Tuesday, November 4, 2008

IMF warns Uganda on financial crisis

The International Monetary Fund has warned Uganda to be ready to counter effects of the financial crisis in the west on Uganda’s economy.

Roger Noro, Assistant Director of IMF says while the effects of the financial crisis in the west might not affect Uganda so directly, it will finally affect the Ugandan economy and make the country unable to achieve its economic growth targets for this year.

Noro who is leading an IMF delegation to Uganda says that the credit crunch in the west has resulted in reduction of financing and investment by western developed countries, which is going to negatively affect developing countries like Uganda who depend a lot on foreign funding and foreign investments.

The IMF boss asked Uganda to engage cautious fiscal policy that will cushion credit shortfalls. He says Uganda needs to stem availability of too much liquidity in the market while at the same time ensuring enough money is available to provide needed credit to businesses.

Noro also appealed to the government of Uganda to undertake critical spending in energy and road infrastructure in order to boost trade and social development.