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[Published: Friday February 15 2013]

Free trade gurantees Uganda extra  US$ 2.5bn, World Bank

Kampala, 15 Feb - (ANA) - Uganda can earn an additional $ 2.5 billion from non-traditional trading partners in the region and close the trade deficit in the next five years if it removes trade barriers with neighbours, the World Bank announced today. Doing so could also help the East African country stabilize the economy in the face of a slowdown in overall growth and reduced aid flows, the World Bank says. “Looking beyond the East African Community, Uganda must position herself as the land bridge to link other landlocked countries to the coastal economies,” said Ahmadou Moustapha Ndiaye, World Bank Country Manager. “Regional integration and trade is the best opportunity for a brighter economic outlook,” concludes Mr. Ndiaye. In the first economic update for Uganda titled “Bridges Across Borders: Unleashing Uganda’s Regional Trade Potential”, the World Bank urges the country that a more rapid diversification of the economy and the appropriate use of resources, including oil, will drive renewed growth momentum. The report also points out that Uganda should work at eliminating nontariff trade barriers to reduce the cost of doing business, reduce transport costs in order to raise productivity and increase connectivity, and improve transport logistics to make the country a better land-linked partner. While Uganda’s economy is poised to grow by 4.5 percent during the Financial Year ending June 30, 2013, up from 3.4 percent GDP growth in 2012, the World Bank cautioned authorities that it falls below potential and far lower than recent historic rates. Uganda’s overall position in terms of its transactions with the rest of the world improved in 2012 on account of increased capital inflows. At the same time, the current account deficit worsened and the slight improvement in services did not compensate for deterioration in the trade balance of goods. Currently, the trade imbalance is estimated at $ 2.4 billion. “Uganda has entered into a number of regional agreements, including the East African Community (EAC) and Common Market for Eastern and Southern Africa (COMESA). These regional agreements have yielded significant dividends, almost doubling Uganda’s regional exports over five years, to 25 percent of total exports in FY11,”says Hon. Maria Kiwanuka, Minister of Finance, Planning & Economic development. “To benefit more from regional trade, we would need to ensure that the transport corridors are working properly to allow more efficient flow of goods to the regional markets,” notes Hon. Kiwanuka. For its part, The Bank suggests Uganda will need to boost trade with African countries as it has with the rest of the world. In 2012, Official Development Assistance (ODA) to Uganda was approximately $882 million, almost same amount as average annual exports to Sudan and DRC. (ANA)
FA/ANA/15 February 2013--------

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