Jibran Qureishi, Stanbic’s Regional East African economist Stanbic Bank has said the likelihood of postponing the announcement of the Final Investment Decision (FID) is unlikely to disrupt the country’s economic growth in the medium term.
Speaking during the presentation on findings of Stanbic Purchase Managers Index (PMI), Mr Jibran Qureishi, the Stanbic Bank regional economist, said Uganda’s economic growth will remain stable, noting that: “…despite the likelihood that the Final Investment Decision on commercial oil production could be postponed into 2020, we doubt that economic growth will suffer just because of this postponement.”
Announcement of FID is still pending amid recent pressures from oil sector players on government.
The findings, he said, continue to anchor the view that domestic demand in Uganda has been performing well, adding: “The on-going public investment in infrastructure, in addition to strong domestic demand driven by the private sector will continue to keep GDP growth on a multi-year basis above 6 per cent.”
The Purchase Managers Index, which measures economic performance per month, also indicated an improvement in multi-sector business activities.
The index also noted that improved demand had led to a rise in new orders in August and as a result, business activity also increased.
Expansions were seen across agriculture, construction, industry, services, wholesale and retail sectors.
According to the report, companies responded to higher new orders by taking on additional staff hence leading to an increase in employment.
Construction was the only sector that did not record a rise in employment, and also the only category to see staff costs decrease.
The Stanbic Purchase Managers Index has been conducted since June 2016 to measure progress in the agriculture, industry, construction, wholesale and retail and service sectors. The index measures the rate of growth in a particular sector.