(RTTNews) - Fitch Ratings on Wednesday raised the outlook on Uganda’s ratings to positive from stable. At the same time, it affirmed the country’s long-term foreign and local currency Issuer Default Ratings(IDRs), the short-term foreign currency IDR and the Country Ceiling, all at ‘B’.

“The Positive Outlook reflects Uganda’s commitment to macro-economic prudence over the last decade which has left it better placed than many of its peers to withstand the global downturn,” Purvi Harlalka, Associate Director in Fitch’s Sovereign group said.

“It also reflects the discovery of sizeable oil reserves - about 2 billion barrels so far, with only a third of the area prospected - which will significantly lift its output and revenue base in the medium term”, Harlalka said.

The report said the ratings reflect Uganda’s status as Highly Indebted Poor Country (HIPC), which afforded it substantial debt relief from the donor community that took increasing comfort from the government’s strict fiscal discipline. The fiscal deficit averaged 2.4% of GDP over the last decade. At the same time, the the government indebtedness fell to 22% of GDP in the fiscal year 2008 from over 66% in 2004 and was also favorable compared to the 28% median of the peer group in 2008, Fitch said.

Moreover, the ratings were supported by the prolonged period of stability in the country enjoyed under President Yoweri Museveni, who has been head of state for the last 23 years, the firm pointed out.

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