By Ritah Kemigisa
The Central Bank has revealed that the Final Investment Decision on the East African Crude Oil Pipeline, EACOP will trigger higher foreign direct investments and private sector investments.
On Sunday, Uganda and Tanzanian governments including International Oil Companies Total E&P and CNOOC signed final agreements for the oil projects paving way for production of oil with the first oil expected by 2025.
The bank has meanwhile revealed that there could be a rise in non-performing loans this year as the real impact of the pandemic will become clearer.
Oil giant Total has since given a green light for awarding procurement, engineering and construction works for the oil project in Uganda.
The company has also committed to ensuring local content as the country prepares to start production of oil.
Following a monetary policy committee today, the Bank of Uganda (BoU) has maintained the Central Bank Rate (CBR) at 7 per cent.
According to the Governor Prof Tumusiime Mutebile, they have noted a steady economic recovery that is proceeding and is stronger than earlier projected.
He says indicators in the first quarter of 2021 show gradual strengthening of the economy which is bound to further improve by covid vaccine effectiveness which will reduce social distancing and cause a rebound in consumption.
The central Bank however warns that the recovery could be dampened by a likely upsurge in cases caused by the third wave despite the ongoing covid19 vaccination exercise.
Meanwhile inflation is to rise temporarily due to rising food crop prices.