Country Report Uganda March 2010

Highlights

Outlook for 2010-11

  • The president, Yoweri Museveni, will face serious opposition from the Buganda kingdom but assurances over land rights and resources should be enough to ensure that he wins a fourth term in the 2011 election.
  • The ability of the opposition to pose a serious threat rests on the success of the Inter-Party Co-operation, a fragmented coalition of parties that currently has plans to field a single presidential candidate.
  • The Economist Intelligence Unit forecasts that real GDP growth will quicken to 7% in 2010 and 8% in 2011 owing to a pick-up in investment and external demand, but poor transport and energy infrastructure will limit this.
  • Food prices are expected to fall as better weather outweighs upward pressure from strong regional demand and a loose monetary policy, and we forecast a fall in the inflation rate, from 13.1% in 2009 to an average of 8.6% in 2010-11.
  • Uganda's current-account deficit is expected to widen to 4.8% of GDP in 2010 and to 5.7% of GDP in 2011 owing to higher capital imports for infrastructure improvement, financed by higher foreign investment.

Monthly review

  • A Forum for Democratic Change candidate won a by-election in Mbale because of a split in the NRM vote between the official party candidate and another member who stood as an independent candidate.
  • Norbert Mao, a northerner, was elected as leader of the Democratic Party in February. The losing candidate, Nasser Ssebaggala, has left to set up his own party and a traditionalist faction has rejected Mr Mao's leadership.
  • The second phase of the World Bank-funded Northern Uganda Social Action Fund, worth US$100m, was launched in February. The Bank will also set up a monitoring office in the region following reports of missing funds.
  • The Uganda Revenue Authority has fallen just shy of the government's ambitious revenue projections for the first half of fiscal year 2009/10 (July-June), but still managed to increase domestic revenue by about 20%.
  • A joint trade committee was established in February between Uganda and Sudan, recognising the growing importance of trade between the two countries and the absence of formal regulation structures on the border.
  • Tullow Oil (UK) has entered into a partnership with the China National Offshore Oil Corporation and French oil giant Total, ending uncertainty in the fledgling oil sector since Tullow bought out its partner, Heritage Oil.
© 2010 The Economist lntelligence Unit Ltd. All rights reserved
Whilst every effort has been taken to verify the accuracy of this information, The Economist lntelligence Unit Ltd. cannot accept any responsibility or liability for reliance by any person on this information
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