Commercial banks in Uganda approved loans worth Shs1 trillion in August 2020, the September 2020 Performance of the Economy Report released by Ministry of Finance has revealed.
“During August 2020, Shs1, 020.57 billion worth of credit was approved for disbursement to the private sector,” the report reads in part.
It adds: “The biggest portion of this total (32.1%) was to the manufacturing sector, an increment from the 7.2% the sector accounted for in the previous month. This was followed by the trade sector and personal and household loans which accounted for 18.8% and 18.1%.”
Other sectors that accounted for notable shares of loans approved in the month include real estate (12.7%) and Agriculture (9.1%), the report says.
According to the report, the economy expanded by 2.9% in FY2019/20 which is less than the earlier estimate of 3.1%.
“Economic growth was also less than 6.8% recorded the year before, mainly due to the adverse effects of COVID-19 pandemic and the related containment measures,” it says.
However, it adds that indicators of economic activity show recovery in this financial year so far, with both the PMI (Purchasing Managers’ Index) and CIEA (Composite Index of Economic Activity) showing improvement in the level of economic activity in the months of August and September respectively.
“Similarly, sentiments about doing business in Uganda, as measured by the Business Tendency Index (BTI), turned positive (recording above 50) for the first time since February 2020. The BTI was 50.8 in September 2020,” it says.
It adds that there was a further marginal decline in annual headline inflation from 4.6% in August 2020 to 4.5% in September 2020.
“This was mainly due to a further decline in price of food items as well as a reduction in price increases of Energy, Fuels and Utilities (EFU) items. However, Core inflation increased to 6.2% in September 2020 from 5.9% in August 2020 mainly owing to price increases in the transport services,” the report reads.