Dr Louis Kasekende, Deputy Governor of the Bank of Uganda, is a thoroughbred professional. A former Chief Economist of the African Development Bank (AfDB), he is credited for playing a leading role in the Bank’s efforts to help African economies withstand the impact of the global economic crisis. In this interview with Pita Ochai of the AnnualMeetings Daily, he speaks on economic issues in Uganda and Africa in general. Excerpts:
In what ways is declining commodity prices affecting your country?
One of the commodities we import is oil and being an oil importer, we have benefited from the drop in oil prices. We have significant savings on import bills and the pump price of fuel is also down. So, we have benefited as an oil importer but as a potential oil exporter, our inward investments within the oil sector have declined just because of the drop in oil prices.
How soon are we going to have Uganda as an oil exporting country?
The first oil barrel is years away because we need to complete the refineries, and then the pipelines. Our government has just made a decision on the route for the pipelines. The decision is that the route will now go through Tanzania to the Port of Tanga. So, we now need the right of way, drawings and investments in the pipelines before exporting.
How would you assess recent monetary challenges and how are you handling them?
Sometime last year, we moved on to inflation targeting. Our numbers and our focus showed that inflation will be outside the range. We decided to tighten monetary policy last year, and now we are reaping the benefits. As a result of that, inflation is much lower. By our projection, we are going to go back to our desired range. The situation is tight but recently at the last Monetary Policy Committee meeting, we reduced our Central Bank Rate which is the monetary policy rate just because our projection shows that we will be back to the desired rate.
What is your impression of the High 5s, which is AfDB’s agenda for transforming Africa?
It is a right step forward. It is in recognition of the fact that to achieve sustainable growth and development, there are certain pre-requisites that have to be in place. Those pre-requisites are reflected in the High 5s. We need structural transformation of the economy and for us to achieve structural transformation, we need to power Africa, and we also need to industrialise Africa. If you look at the High 5s, I think we are on the right path. Even to integrate Africa is one of those things that are critically important for transformation. So, we will support the AfDB. What we want from the institution is to see it implement the High 5s.
Infrastructure is a major challenge in Africa. How do we bridge the infrastructure gap?
We can’t do everything at the same time. We are not going to close all the infrastructure gaps in just one day. But we need to first identify the critical structure for the growth and development of Africa and embark on it. That is the way to go. Energy is necessary. Indeed, countries are embarking on investment on energy. Roads, rails, ports, etc are necessary. In each of these sectors, there is a gap and let us start by closing the gaps.