Uganda's S&P credit rating up
Jul 25, 2014
INTERNATIONAL credit rating agency, Standard & Poors (S&P) this week affirmed Uganda’s credit rating at B/B with a stable outlook from B negative based on high GDP
By Samuel Sanya
International credit rating agency, Standard & Poors (S&P) this week affirmed Uganda’s credit rating at B/B with a stable outlook from B negative based on high GDP (Gross domestic Product) growth rates and continued investments.
Standard & Poor's Financial Services LLC (S&P) is a US financial services company, part of McGraw Hill financial which produces financial research and analysis of stocks and bonds.
Despite aid cuts, Uganda’s economy grew by 5.8% in the financial year 2013 up from 3.2% two years before as the economy rebounded from high inflation.
S&P’s highest rating is AAA which is enjoyed by a few countries especially the Nordic region.
The latest review implies that Uganda is less risky for international investment and is a shot of confidence is Uganda’s economic prospects.
Reacting to the development, Prof Emmanuel Tumusiime-Mutebile, the governor Bank of Uganda said that; “Standard and Poors’ affirmation of Uganda’s B/B Credit rating is yet further proof of international confidence in Uganda’s future economic growth prospects and the management of its economy.”
“It sends a clear signal that the Ugandan economy provides attractive opportunities for private investment,” Mutebile added.
Stephen Kaboyo, the Uganda Telecom Chairman and Alpha Capital Partners CEO, noted that early in the year, the rating agency had slammed a negative outlook citing an economy that was performing below potential, lower than projected domestic revenues and a widening current account deficit.
“The revision is underpinned by a bounce back of growth, political stability and infrastructure investments. In my view this is a good endorsement of the current economic policies especially the push ahead with the capital spending which is positive for growth,” Kaboyo says.
The International Monetary Fund
(IMF) projects Uganda’s economy to grow between 6% to 7% this financial year 2014/15.
Related Stories