The global pandemic has shown us all that human power and the human resource can not always understand the outer forces. The global pandemic of Covid-19 turned our face to face with the completely new reality, which we definitely were not ready to stand against.
The global pandemic has caused the world millions of lives and uncertain consequences. Moreover, the global economic disaster is ongoing and it does not seem to get any better any soon. The hard economic situation is spreading to every single country. The crisis is something, we can not really do anything with. Currently, the crisis is irreversible and we all are going with a flow.
The economic crisis has reached every single country equally. While the developed countries are struggling but still going through, the developing countries are having even harder times. The countries such as South Africa and East African countries like Uganda will most probably be in a state of uncertainty for much longer.
According to the experts and analysts, the country of Uganda is going to sink in the loans even more, with the country’s debt rocketing to 49.9% of GDP by the end of June, which is as close as in three months’ time. The country debt last year at the same time was 41%. The Restatement was released by the Ministry of Finance 2021/2022 fiscal year planning paper last week.
According to the statement, the paper says that the need of borrowing extra money is necessary in order to cover the revenue shortfalls as well as the Covid-related expenditure needs. And this is obvious. A lot of countries had to make serious additions to their supplies in order to handle the pandemic with minimal losses.
Currently, the total debt amounts to up to 15.30$ billion. The number was 12.55$ billion last year. Which is observed in the massive increase. It is hard to maintain working spots and jobs during the pandemic and especially it is hard to maintain jobs for people when there is a huge debt by the country. The same problem is in Uganda.
The uncertainty increases with debts
With the pandemic going on and the new challenges are popping up every time, Uganda is having a hard time with maintaining people employed. This is why the unemployment rate of the country has also increased significantly, just like in the whole world. The increasing unemployment rate forced people to start looking for other income opportunities.
Uganda has joined the list of African countries which found forex trading as a helpful case during the global crisis. Ugandan people find trading as one of the main activities in terms of generating constant income. The Axiory broker, which is highly favored on the continent, reported an increase in the statistics of traders and new investors from Uganda on their platform. Indeed, forex trading could be a perfect solution for a country that has a debt of almost half of its GDP rate.
The government at this stage continues to support the economic recovery process by providing economic stimulus packages to multiple sectors. While the debt shall continue to grow, economic support should be an important tool to support people in need.
Moreover, due to the tough social and economical situation, the local government supports the local people with their own ways of generating profits and income. Thus, Uganda’s government is not limiting or restricting any kind of transactions and trading opportunities. The forex market might be very impressive and promising to foreign investors as well. While the country might be sinking in debts now, the time it flourishes again should be very lucrative for everyone who has invested in it.
The traders have worked on improving their trading strategies and are developing their trading skills. While there is not much left to do, when it comes to the activities people have to take up during the quarantine, learning and developing skills sounds like the best option. This is why many local traders have mastered some of the most popular Forex trading strategies that have proven to work and are a promising source of income, especially now that the economic crisis is getting worse and worse.
How far the debt goes
The World Bank projected and predicted Uganda’s economic growth in 2020 would only be 0.4%, which is way lower than the index of last year’s growth, being at a valid 5.6%. Though the changes are to be blamed on the Covid-19 impact only.
Uganda’s opposition and the IMF have in recent years expressed unease about the ballooning public debt and potential repayment problems. The president of Uganda, Yoweri Museveni has contradicting actions. Some of his actions are worth an appreciation eye, while the others are still uncertain, which is also logical in the current situation.
The most recent action taken by the president was to secure the large credit lines from China. he is also seeking to finance the infrastructure construction program and shore up the political support, as well as to find more investors ready to support the local economy at least somehow.
According to the budget paper, Uganda’s debt will peak at 54% percent in the fiscal year ended June 2023 before starting to decline. The predicted economic growth starting from July is expected to be from 4 to 5%, which is all about the recovery process in the aggregate demand following government interventions in reviving private sector activity.
According to the statements made by the local authorities, the country’s debt could otherwise be used for the public resources and for the financial development of the country, yet due to the pandemic, it has to go to the supplies relevant to the Covid-19.
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