BANK OF UGANDA HOLDS THE WRONG SIDE OF THE SWORD ON THE ECONOMIC DOWNTURN Yesterday, 14th October 2026, the Central Bank released the September Monetary Policy Statement, with the key outlook largely being the increase in the Central Bank Rate (CBR) and the Cash Reserve Requirement (CRR), both of which have major implications for the lives of citizens. The monetary policy wonks at the Central Bank elected to “eat away” people’s welfare without dust or noise. We are all alive to the global energy crisis and how it ends up in our pockets and munches away the precious dollar. The implication is that the price of gas paints the overall basic basket. We also know that food supplies have dwindled across various parts of the country due to prolonged drought, meaning that the energy crisis has only exacerbated high food prices by adding to the cost of supply. Gen. Museveni is convinced from basic economics that a depreciating local currency is good for our exports. Granted. The question, however, is: what are we exporting in the short run to benefit from the shilling depreciation? It’s highly unlikely that this phenomenon will last 24 months. Given the nature of our external account, we may not take benefit of this situation. It’s also true that the disequilibrium on our external account is occasioned by energy and steel imports. We are net importers of these major drivers of the economy. Our exports sector has very limited manufacturing capability. Coffee exports that constitute the majority of the earnings have suffered a significant beating from the prolonged drought. Where is the rest of the expectation to take advantage of the rising Dollar? Dairy products? Gold? Or other precious metals? Very fragile prospects! The contractionary monetary policy adopted by the Central Bank presumed that the current inflationary pressures are from the demand side of the economy, thus the need to squeeze out excess liquidity from the economy. Is the central bank alive to major supply constraints that will deter any assumed benefit from the rising dollar? The CBR being raised by 3% has heart-stopping implications for the already existing supply constraints. Has the Central Bank thought about possible job losses in the short-run and local revenue implications? The commercial banks in Uganda rarely offer fixed lending rates to borrowers. What is the fate of the local borrower who is likely to receive notification of revised interest rates? What of the implications for the basic basket of the fixed-income earners, since the Central Bank seems to have made assumptions of demand side inflation? The Central Bank has a duty of maintaining stability of the currency and does so on behalf of the government. Should we then ready ourselves for a government follow-up in the form of: 1. Utility rebates on water and energy? 2. ⁠Payee rebates for the lower-bracket fixed-salary earners for at least two quarters so that their basic basket doesn’t shrink further? 3. ⁠At least 10% domestic arrears payment release for key sectors to sustain production and employment? Oba Ntwale eri Olugezigezi??

I'm humbled by the many messages and outpouring of love from friends, and the surprise party organised by comrades at the DF as I turned the page of my life's journey. There couldn't be a better way to celebrate as I crossed the half century mark. Thank you for your thoughtfulness and kind messages. Much appreciated.