The Central Bank as a Restraint: the Experience of Uganda

  • Louis A. Kasekende
  • Iftikhar Hussain
Part of the Studies on the African economies book series (SAES)


Uganda has made impressive progress over the last ten years, registering East Asian tiger-like growth rates. In part, this growth can be attributed to the ‘peace dividend’ as the social structure, which had been horrifically disrupted, returned to normal. In recent years the authorities have demonstrated their commitment to maintaining macroeconomic stability and this has undoubtedly contributed greatly to Uganda’s success. But economic performance was not always this good. Through the late 1980s and early 1990s, although relatively high GDP growth was achieved (see Table 7.1) there were significant slippages in the government’s implementation of economic reform. The crunch came in 1992, when there was a full blown fiscal crisis and the ‘printing press’ was deployed, resulting in very high inflation.1 Following the crisis, the realization of the need and desire for change came from the highest levels of government. The President changed the team in charge of the economy with the instruction that fiscal discipline was to be strictly adhered to.


Interest Rate Monetary Policy Central Bank Commercial Bank Money Demand 
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References and Further Reading

  1. Abdulla, Y., C. Abuka and I. Hussain (1996). ‘Indirect Monetary Policy and the Term Structure of Lending Rates in Uganda’, mimeo, presented at African Economic Research Consortium meeting.Google Scholar
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  5. Blanchard, O. and S. Fischer (1989). Lectures on Macroeconomics, MIT Press.Google Scholar
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  9. Hussain, I (1996). ‘Estimating an Inflation Equation for Uganda’, mimeo.Google Scholar
  10. Kasekende, L, and M. Ating-Ego (1996). ‘Financial Liberalisation and Its Implications for the Domestic Financial System: The case of Uganda’ (May). Final report submitted to the AERC.Google Scholar
  11. Kashyap, A, and J. Stein (1994). ‘Monetary Policy and Bank Lending’, in G. Mankiw (ed.), Monetary Policy, University of Chicago Press.Google Scholar
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  16. Page, S. (ed.) (1993). Monetary Policy in Developing Countries, Routledge.Google Scholar
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Copyright information

© Centre for the Study of African Economies 2000

Authors and Affiliations

  • Louis A. Kasekende
  • Iftikhar Hussain

There are no affiliations available

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