Minister tasks commercial banks to cut interest rates to fund Ten-Fold Growth

KAMPALA. Finance Minister Henry Musasizi has urged commercial banks to lower the cost of borrowing to make affordable financing available for Uganda’s economic transformation agenda.

Mr Musasizi said cheaper credit would be critical in financing the government’s Ten-Fold Growth Strategy, particularly as the country seeks to expand private-sector investment and unlock new sources of economic growth.

The minister made the remarks on Tuesday while meeting members of the Uganda Bankers’ Association (UBA) at the Ministry of Finance, Planning and Economic Development to discuss ways of strengthening cooperation between government and financial institutions.

The UBA delegation was led by its vice-chairperson, Ms Grace Muliisa, who is also the managing director and chief executive officer of Ecobank Uganda.

Mr Musasizi, who was accompanied by Bank of Uganda Governor Michael Atingi-Ego, said banks should work with government to lower interest rates and make money more accessible to businesses.

He said he was encouraged by the current financing structure, which he said was increasingly being directed towards the Ten-Fold Growth Strategy (ATMS), and commended the private sector for embracing the government’s economic agenda.

The Ten-Fold Growth Strategy is government’s plan to expand Uganda’s economy tenfold over the next 15 years by focusing on areas including agro-industrialisation, tourism, minerals, oil and gas, science and technology, and other productive sectors.

Ms Muliisa said the banking industry was committed to supporting the strategy by mobilising funds to expand private-sector growth while working towards a gradual reduction in interest rates.

She said the sector would continue engaging government on measures that can improve access to affordable financing and support investment.

The meeting also discussed tax matters affecting the banking and financial services sector, including the treatment of income and expenses related to government securities.

UBA Executive Director Wilbrod Owor called for the fast-tracking of financial sector reforms that would support Uganda’s economic transformation agenda.

Mr Owor said an efficient financial system was necessary to mobilise savings, channel credit to productive sectors and support businesses to expand.

Mr Atingi-Ego said the amount of financing required to implement the Ten-Fold Growth Strategy was huge, making it necessary for government to attract more private-sector investment.

He said domestic savings alone were not sufficient to meet the country’s financing needs and called for innovative ways of mobilising external financing.

The governor said stronger collaboration between government and financial institutions would therefore be necessary to bridge the financing gap and support sustainable economic growth.

The Uganda Bankers’ Association is the umbrella body for licensed commercial banks operating under the supervision of the Bank of Uganda.