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Fitch rates Uganda’s debt B+ stable

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The governor of the Bank of Uganda Prof. Emmanuel Tumusiime-Mutebile. File Photo

Uganda’s sovereign outlook rated B+ stable


The Fitch Rating believes that real GDP growth would pick up to about 6.3% in 2019

Uganda’s sovereign rating has improved to B+ stable outlook from single B-, Fitch Ratings indicates.

The Fitch Ratings has maintained a stable outlook for Uganda B+ sovereign credit rating with a stable outlook for Uganda.

In May 2019, the Standard & Poor’s Rating Agency’s credit assessment of Uganda was maintained at B with a stable outlook.

According to a statement issued by Bank of Uganda on July 10, 2019, the rating is driven by Uganda’s record of relative macroeconomic stability supported by a relatively high degree of exchange rate flexibility and central bank independence that operates under an inflation targeting framework.

It further indicates that the country’s growth prospects are underpinned by the ongoing public infrastructure investments.

The assessments also offer an independent evaluation of Uganda’s policy consistency and prospects for the economy going forward, as well as potential future risks such as the risk of external debt distress.

The governor of the Bank of Uganda Prof. Emmanuel Tumusiime-Mutebile said Uganda’s monetary policy stance will continue to balance the inflation objective with supporting economic growth.

The Fitch Rating believes that real GDP growth would pick up to about 6.3% in 2019.

However, the rating is constrained by low per capita income; some governance challenges; as well as widening current account deficits. These structural weaknesses pose challenges to policy formulation and implementation.

These independent assessments are important for investors to gauge the creditworthiness of the country and therefore have a big impact on the country’s borrowing costs as well as in attracting foreign direct investments (FDI).

Stephen Kaboyo a financial analyst says B+ credit rating with a stable outlook is a reflection that the government has achieved solid economic performance and a stamp of approval in the policies driving the economy.

“The rating would augment the government’s efforts in attracting FDI. Potential investors will put this in their assessment to invest in Uganda and the country will be looked at favourably in terms of country risk,” Kaboyo said.

—— AUTO – GENERATED; Published (Halifax Canada Time AST) on: July 14, 2019 at 07:42PM

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