Museveni believes that the ongoing conflicts in two Central Africa nations – the Democratic Republic of Congo (DRC) and Central Africa Republic (CAR) – as well as South Sudan in East Africa, could lead to widespread ramifications, if they continue.
“The lack of peace in neighbouring countries like Congo, South Sudan and Central Africa Republic really interferes with trading,” Museveni said in an exclusive interview with CNBC Africa.
“Traders cannot move, and people are not earning money because they are running up and down.”
According to a recent report by UK consultancy firm, Frontier Economics, South Sudan’s conflict could cost Kenya, Uganda, Tanzania, Ethiopia and Sudan over 50 billion US dollars if the fighting continues for another five years.
Moreover, Kenya and Uganda stand to lose the most as they account for a substantial amount of South Sudan imports.
Several Kenyan banks in the war-torn country are also among the hardest hit. Kenya Commercial Bank, Equity Bank and Co-operative Bank have reported tough operating environments due to the slowdown in economic activity.
In the wake of the conflict in Africa’s youngest nation, South Sudan, Uganda has witnessed a drop in foreign remittances. The East African nation estimated a 30 per cent drop in remittances, which, consequently, has reduced the country’s GDP by at least 0.2 per cent.
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However, the East African economies most likely to be affected by the ongoing conflict in the DRC and CAR, are Rwanda, who is still recovering from a slowdown in foreign aid, Burundi and Uganda.
Despite the International Monetary Fund (IMF) recently revising sub-Saharan Africa’s growth forecast to 4.9 per cent from a previous prediction of 5.8 per cent in 2015, Museveni believes Africa is resilient and its economy will continue to grow despite the hurdles.
“Every day Africa is becoming better. Why? Because people [countries] who were not part of the money economy each year are becoming part of the money economy. Whatever happens in the world, provided there is peace, African economies will grow,” he said.
“I think the big danger in the world is war. Without peace, African economies will grow at a slower rate than they would have done if they also have the vibrant partnership of the Western economies. But the economies will grow all the same because of the internal metamorphosis within Africa.”
Museveni cited the high cost of doing business and the unexploited areas by investors in certain sectors as some of the other challenges facing East African countries.
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“The entrepreneurial class in Uganda is busy with real estate, a little bit of transport, but manufacturing has got very few of them, financial services, insurance and so on,” Museveni noted.
“You find in those sectors we do not have many indigenous entrepreneurs and attracting the foreign ones depends on low cost of doing business.”
However, the World Bank has said that Kenya, Uganda and Tanzania are expected to beat other nations on the continent in terms of growth in 2015.
It forecasted growth of six per cent in Kenya this year, 7.2 per cent in Tanzania and 6.6 per cent in Uganda, making these rates higher than that of sub-Saharan Africa as a whole.