Although the presidential election contest is not over yet, the banking industry leader, Stanbic Bank Uganda, believes that investor confidence is already rife.
Speaking in an interview after the launch of Smart Banking in Kampala early in the week, the bank’s chief executive officer, Mr Patrick Mweheire, said the post-election economic terrain is looking positive, urging industry players to use the opportunity to invest.
He said: “We are seeing a lot of signs indicating that some of the hangover effects of being in a pre-election year where a lot of decisions were being postponed till after the elections are beginning to be made.”
He continued: “It is not a secret that anytime we have an election here people tend to pull back and wait for what is going to happen. We know the first quarter is going to be tight because we have had so many holidays but we are positive we will make up for that lost ground in the next three quarters.”
According to him, the fact that inflation is still in single digit and the currency hasn’t gone haywire at a time it was expected to be spiralling is a proof enough that all is well.
However, some quarters, especially the private sector leadership thinks otherwise.
Uganda Manufactures Association policy analyst Godfrey Ssali said members of the association are still holding back until after the swearing in ceremony.
He said Mr Mweheire’s view is limited in scope as it does not factor in the operation of the economy as a whole. He said it will take more than a quarter of a year for the country to recover from election hangover.
On his part, the director communication and public relations, Uganda Chambers of Commerce and Industry (UNCCI), Mr Martin Okumu, said the cost of borrowing in Uganda is one of the highest in the world. And that alone is bad news for economic sector players who need credit to operate.
He said: “Our interest here ranges between 20 and 30 per cent and in Exim Bank of India or China it is less than five per cent. So who has an advantage?”
He continued: “It will take us more than a year to recover from election shocks. I can tell you in the last two months there have been about 50 election articles all critical about the country. That is bad for tourism. It will take us a long time to recover.”
Previous elections have left the country bleeding after excessive spending, triggering double digit inflation and currency volatility.