Uganda Investing in Infrastructure Projects
The Ugandan government plans to invest in major infrastructure projects. The plan is to invest $1.7 billion in Karuma hydropower plant, $556 million in Isimba hydropower dam and $8.5 billion in gauge railway project.
The projects are being overlooked by the Bank of Uganda (BOU), which has kept away from intervening in foreign exchange market by selling dollars. In fact BOU is buying dollars to facilitate the projects.
The bank is seen selling and buying dollars at a fast rate, thus showing that it is desperate to build reserves. By the end of 2013, BOU reserves were estimated at $3 billion (Sh8.5 trillion)
The shilling is said to have depreciated by 9% against the US dollar, which could depreciate further by poor harvest thus meaning a loss to farmers.