KAMPALA, October 11 – East African nations can limit the impact of the global financial crisis by focusing on regional trade, Ugandan State Minister for Trade Nelson Gagawala Wambuzi said Friday.
"As long as the East African community maintains solidarity together, the question of an East African economic collapse is totally out," Wambuzi told a press conference here.
"We should trade amongst ourselves and exploit markets internally. Right now, trade between Uganda and Kenya is more important than trade between the US and Kenya," he added.
Executive Director of the Uganda Commercial Export Board Florence Kata said her country was unlikely to be badly affected by the turmoil in world markets because the majority of its export revenue comes from other African nations.
"The US being in some kind of trouble probably won\’t affect us," Florence Kata said. "When the US catches a cold we all sneeze, but we don\’t die."
Tanzanian President Jakaya Kikwete, current chairman of the African Union, expressed concern Thursday that the global financial crisis may curtail foreign aid to the continent.
"Tanzania and other developing countries are deeply concerned with the current financial crisis coupled with skyrocketing oil and food prices," he said during a joint news briefing with Madagascar President Marc Ravalomanana.
"Our appeal to our development partners is that they should not cut aid to the developing countries," he said.
Last month, the Bank of Uganda also warned that the prevailing financial crisis could affect the level of foreign aid to Uganda and other poor countries.
"There is the possibility of reduced aid flows from developed countries to less developed countries," the bank\’s chief Emmanuel Mutebile said in a statement.
The global credit crunch has caused the worst crisis in decades in Western financial institutions and while Africa has so far been spared, observers argue that the flow of money from rich countries to Africa could slow down.
Kenya has expressed more concern about a possible knock-on effect from the global economic crisis, but its stock market has weathered the storm so far.
Smaller economies like Tanzania and Uganda have expressed fears that weakened Western countries might cut aid to the developing world.