KAMPALA, UGANDA – The recent hike in the Central Bank Rate to 10.25% has sparked concerns among economic experts, with warnings of a looming economic crisis. Denis Tukahikaho, Ph.D., a renowned economist, has sounded the alarm, cautioning that the increased rate will have far-reaching consequences for individuals, businesses, and the economy at large.
“The increased Central Bank rate will lead to higher borrowing costs, reduced borrowing, and increased debt servicing challenges,” Dr. Tukahikaho warned.
“This will ultimately result in decreased consumer spending, business investment, and economic activity, pushing the country towards an economic crisis.”
Dr. Tukahikaho advised borrowers to be cautious of lending terms and conditions, urging them to avoid floating loan rates that could leave them vulnerable to increased loan rates at the discretion of commercial banks.
The Bank of Uganda’s decision to raise the Central Bank rate from 9.5% to 10.25% has been seen as a move to combat inflation and stabilize the economy.
However, experts like Dr. Tukahikaho argue that the hike will have devastating effects on the economy, particularly on low-income households and small businesses.
As the country grapples with the implications of the increased Central Bank rate, Ugandans are bracing themselves for tougher economic times ahead.
