Anders: Your Excellency, thank you so much for joining me for this interview. It is a real honor. I see from your past work, including as a physician, that you have contributed greatly to your country’s well-being.
H.E. Ruhakana Rugunda: Thank you.
Anders: The Uganda Bureau of Statistics recently announced that the 2015-2016 fiscal year has a robust growth rate of 4.6% — above average for frontier markets. Uganda’s service, food, accommodation, transportation and construction sectors have grown tremendously in the last year. Can you comment on what has caused such substantial growth in these sectors?
H.E. Rugunda: First of all, 4.6% is below what we want it to be. We expect that in this new financial year the growth rate will be above 5%. Having said that, what has brought growth in the country’s economy over the years — we can see the average growth rate has been about 5% — is first and foremost the able leadership under President Yoweri Museveni and the National Resistance Movement.
These ushered in stability and the ending of violent political conflict. Uganda is now stable and therefore the population is able to work and produce, hence our robust economic growth. Secondly, because of stability, it has enabled correct policies to be made both in the financial sector and the rest of the economy. In the economic area there has been macroeconomic stabilization and this has therefore given confidence to local and external investors who see that yes, this is a good economy to invest in, and I’m assured that I will get my money back.
And there has been correct prioritization, for example ensuring that there is infrastructure in place so that if you want to get from point x to point y, you will travel on a good road. And there has been prioritization on power because investors want power. So government has invested heavily in the provision of power so there will be no impediment to investors and this has created quite a number of jobs.
Now we are focusing on building the railway lines that link us with Kenya, Rwanda, and Sudan so that the commodities can move to and fro without any significant constraints of poor roads and poor railways. So really, those have been some of the major points that explain the growth.
And perhaps I should say that the Almighty favored us with a good country and a good climate and therefore we are able to use that endowment to produce. But of course as time goes on we are adding more modern methods of production and irrigation, so that we can supplement what Nature has provided to us. Uganda has now discovered 6.5 billion barrels of oil. We expect that that will now give the country something and this is only part of the oil region explored. We could even get more than that.
That should add something to the economy. In a nutshell, that is how the economy has grown. We have focused on regional integration of the economy of East African countries. There are now six countries — Rwanda, Burundi, Uganda, Tanzania, Kenya, and South Sudan — that are deepening their trade and harmonizing economic policies. This has promoted intra-regional trade and Uganda, like the other 5, has been one of the beneficiaries as far as economic growth is concerned.
Anders: Can you give more details on the elements of macroeconomic stabilization?
H.E. Rugunda: The main element is that we have controlled inflation and therefore managed to stabilize prices. The exchange rate, although free since anyone can buy dollars or other currencies, was contained. It is free in that anybody can go and buy U.S. dollars or any foreign exchange. But because we have controls, inflation and other parameters are contained and it has stabilized the economy.
Anders: There are tens of millions of dollars worth of agricultural investment being made in Uganda. Some of this investment is going into large-scale farming, and some investors seek to partner with local family farmers. Would you please comment?