Overview:
The Uganda Development Bank is set to receive 1 trillion shillings in new capital as the government moves to provide cheaper credit for manufacturing and agriculture.
KYANKWANZI, Uganda — The government has committed an additional 1 trillion shillings to the Uganda Development Bank this fiscal year, a move designed to bolster the lender’s liquidity and provide the private sector with access to low-interest capital.
Prime Minister Robinah Nabbanja announced the funding Friday during the graduation of 607 bank employees from a leadership and ideological training program at the National Leadership Institute. She said the capital injection is part of a strategic effort by President Yoweri Museveni to lower the cost of doing business and stimulate large-scale economic activity.
The additional funding aims to expand a loan portfolio that has already seen 2.45 trillion shillings disbursed to businesses in commercial agriculture, manufacturing, tourism, and construction. Nabbanja noted that these previous investments have proved vital to the national economy, generating 55,553 jobs and 20 trillion shillings in total output value.
“The bone marrow of any economy is the cost of electricity, transport, and labor, in addition to the cost of money,” Nabbanja said. “When the cost of money, labor, electricity, and transport is low, this automatically lowers the cost of doing business, hence the profit margin is high.”
Nabbanja emphasized that the government is prioritizing institutions that create a multiplier effect. By recapitalizing the Uganda Development Bank, or UDB, the National Resistance Movement government intends to make “cheap and affordable money” a permanent fixture for local investors.
Dr. Patricia Ojangole, the managing director of UDB, said the staff training in Kyankwanzi was essential to align the bank’s human resources with its developmental mandate. She noted that as the bank’s capacity grows with the new 1 trillion shilling allocation, employees must remain focused on patriotic service and efficient delivery of financial products.
The bank’s investments have already contributed 944.2 billion shillings in taxes and earned 3.3 trillion shillings in foreign exchange. With the new capital, the government expects these figures to rise as more businesses in the creative and health service sectors are brought into the fold.
Beyond the UDB, Nabbanja cited the government’s continued support for other state-linked entities, including the Uganda Development Corporation and Pearl Bank, as evidence of a comprehensive plan to modernize the nation’s financial infrastructure.