Olive Kigongo on panel discussing global financial crisis

By Isaac Omoding in Istanbul, Turkey

The Uganda National Chamber of Commerce and Industry (UNCCI) president, Olive Kigongo has urged Uganda and Turkey to enhance cooperation and combine their economic and commercial potential.

She said the trade volumes between the two countries have been consistently rising from a mere US$2m in 2001. She said the two countries should put more emphasis on contracting and consultation services sectors and have it central in their cooperation.

Kigongo was among some 1,000 business leaders from 87 countries that gathered in Istanbul, Turkey from September 12-14, to discuss the role of global economic crisis and recession that is dominating the world’s trade environment. She was the only lady among six men in their panel discussing the effects of the crisis in their respective countries and regions.

The Union of Chamber and Commodity Exchanges of Turkey (TOBB), the country’s largest business organisation, hosted the event while marking its 60th anniversary.

The TOBB president, Rifat Hisarciklioglu, said the world economy is still undergoing a major shift with emerging markets catching up to developed economies.

Uganda’s Olive Kigongo told the business summit attended by, among others, Macedonian President Gjorge Ivanov, Turkish Deputy Prime Minister, Ali Babacan and Turkish trade minister Hayati Yazici, that the effects of global financial crisis have been limited in magnitude in Uganda as demonstrated by her exports and FDI performance.

She said FDI inflows have largely been stable and growing at a compounded annual growth rate of 4% between 2006 and 2011 and that Uganda attracted the third largest Greenfield investment in low developed countries in 2011 to the tune of $2b in the oil and gas sector.

She said the global financial crisis appeared to have little or no impact on Uganda’s export performance with the value of exports reaching $2.1b in 2011 with an underlying compounded annual growth rate of 10% between 2006 and 2011. The resilience of Uganda’s export sector in the face of the global financial crisis, she said, is in part attributed to regional trade with member states of the Common Market for Eastern and Southern Africa (COMESA) accounting for 48% of Uganda’s exports by value. COMESA is a grouping of 19 countries with a population of about 390 million people.

However, she said the global financial crisis had an impact on Uganda’s exchange and interest rates with the shilling-dollar exchange rate depreciating by about 46% between 2007 and 2011 reflecting lower inflows and some outflows by some portfolio investors.

She said the global financial crisis showed that protectionism was not a solution to the crisis and ensuing contraction in global trade could not help.

That the crisis proved that fates of countries are intertwined and promotion of bilateral trade and reciprocal investments are the best remedy against the financial crisis. She said that crisis therefore called for enhanced bilateral ties and joint forces with partners.

Kigongo the summit that Uganda set example in macro-economic indicators for its region with growing economy, rising foreign direct investments (FDI) and foreign trade saying that is why Uganda and Turkey should enhance cooperation and combine their economic and commercial potential.

She said it was estimated that foreign portfolio investors held about $400m in the Government Treasury Bill and Bonds as of September 2008 and about $193m as at end of December 2008 and that interest rates on government treasury bill and bonds have consequently also increased with some knock-on effects on bank lending rates. However, she said, portfolio investments have rebound with foreign holdings of government securities accounting for nearly 20% of outstanding domestic debt as of June 2012.