Annual Bankers’ Conference to tackle Shs490 trillion funding gap

KAMPALA. Uganda’s banking industry is seeking to mobilise up to Shs490 trillion in long-term capital by 2040 to finance investments under the government’s Tenfold Growth Strategy, bankers have said.

The financing challenge will take centre stage at the 9th Annual Bankers’ Conference 2026, organised by the Uganda Bankers Association (UBA) under the theme: “The Role of Uganda’s Financial Institutions in Facilitating Tenfold GDP Growth.”

The conference will bring together banking executives, policymakers and international financial institutions to discuss how the financial sector can mobilise and deploy the capital required to transform Uganda into a $500 billion economy by 2040.

UBA chairman Michael Mugabi said the banking industry currently has about Shs28 trillion available for lending but will need to dramatically increase its financing capacity if it is to support the scale of investment envisaged under the strategy.

“We believe financial institutions have an important role to play in supporting businesses, enabling investment, expanding access to finance and creating opportunities for more Ugandans to participate in and benefit from economic growth,” Mr Mugabi said.

He said one of the key strategies would be to forge partnerships capable of attracting patient and affordable capital from international markets.

The government’s Tenfold Growth Strategy identifies four priority areas, commonly referred to as ATMS: agro-industrial development; tourism; mineral-based industrial development, including oil, gas and petrochemicals; and science, technology, ICT and innovation, including the creative industry.

Banks are expected to provide affordable financing to businesses operating in these sectors, which have been identified as critical to accelerating economic transformation.

Mr Mugabi, who is also the managing director of Housing Finance Bank, said the conference would challenge financial institutions to rethink how they mobilise and deploy capital to support long-term investment.

“Uganda’s tenfold growth ambition is significant. Our role as financial institutions is to consider how we can help make that ambition investable, inclusive and achievable,” he said.

Credit challenge

Bank of Uganda says Uganda will need to significantly increase private-sector credit if the economy is to sustain the growth required to achieve the Tenfold target.

The ratio of private-sector credit to gross domestic product currently stands at about 12.4 per cent but needs to rise towards 50 per cent, according to the central bank.

Allan Victor Walusimbi, the Bank of Uganda head of Knowledge Management Centre, said the central bank was supporting the strategy by maintaining macroeconomic stability, strengthening the financial sector and improving the legal and regulatory framework for capital mobilisation.

He said regulation was also being expanded to address emerging risks, including cybercrime and money laundering, as the financial sector becomes increasingly digital.

The central bank has also taken on the licensing of large savings and credit cooperative organisations (Saccos), a move aimed at strengthening oversight and protecting depositors.

Mr Walusimbi said the reforms are intended to protect consumers while ensuring financial institutions remain sufficiently strong to support private-sector growth.

UBA chief executive officer Wilbrod Owor said the banking industry was already pursuing partnerships with international lenders to increase access to long-term capital.

He cited the partnership with FMO, the Dutch Entrepreneurial Development Bank, as one of the initiatives intended to bring additional financing into Uganda.

The association is also seeking to deepen partnerships with institutions such as the World Bank, which has committed more than Shs23 trillion ($6 billion) over the next 10 years, mainly towards job creation.

Mr Owor said bankers also intend to engage Parliament and President Yoweri Museveni on reforms they believe are necessary to attract more capital.

Among the issues is the 5 per cent withholding tax on foreign debt, which the banking industry says could increase the cost of accessing international financing.

The bankers are also calling for a specialised agricultural financing system to address the limitations of conventional commercial banking in financing the sector.

Meanwhile, the Capital Markets Authority and stock exchanges are expected to play a complementary role by mobilising additional capital for long-term investment.

Finance Minister Henry Musasizi has challenged commercial banks to work with government to lower interest rates and ensure more affordable financing for businesses.

The bankers’ conference will therefore provide a platform for the industry and policymakers to examine how Uganda can mobilise the enormous financing required to turn the government’s ambitious growth targets into bankable investments.