OPINION
Beyond United States of America the super power that we all know, it also stands as one the most influential economies in the world with the likes of China, Germany and Japan. As such, change of guard comes with inevitable economic effects to not only Uganda but Africa as a whole.
For the case of Uganda, the outcomes of the U.S 2024 elections could to a certain degree have significant impact on multiple fronts in the economic landscape.
Uganda’s trade and export market in the global space would be impacted by the policies of the U.S administration. Ugandas coffee for instance that brings over $990 million annually of which U.S is an important market. If U.S leans towards protectionist policies with increased tarrifs, these would affect the competitiveness of Ugandas exports. Similarly, an open trade policy would imply that our exports will smoothly sail into the U.S market.
Even more, Uganda’s foreign aid and development support is more susceptible to the outcomes since U.S is one of the largest donors. Through entities like USAID and UNHCR, Uganda recieves over $900 million channel towards health education and refugees etc with half of the aid going into malaria and HIV/AIDS programs saving millions of lives. So depending on the outcome of the elections, priorities for such funding will change in favor or against it.
The Foreign Direct Investment (FDI) is as well exposed to the changes especially on energy technology and infrastructure sectors. Recently, Uganda posted a record high mark in FDI when it reached $ 1.3 billion due to strong investment climate which is dependent on global economic stability. As such, policies affecting interest rates and investor confidence shall have a trickle down effect to Uganda.
Even a more complicated one is the effect on the shilling which suffered depreciation pressures recently in 2023 as it almost hit the rate of 4,000 shs. If interest rates are raised, the dollar will strengthen thus making Ugandas imports expensive and affect the prices of imports like fuel and machinery. This would birth inflationary pressures domestically.
To conclude just as farmers prepare for seasonal changes for planting, Uganda ought to remain attentive to those U.S policy changes to position its self to navigate through.
BY: Jude Opolot Akol (B.A Economics)
Email: judeopolot256@gmail.com