Bankers urged to set up special tourism fund to save sector from Covid blues

Commercial banks have been urged to consider creating a tourism fund, similar to the agriculture credit facility to increase tourism related investment following the effects of Covid-19 pandemic. 

Speaking during Day Two of the Annual Bankers Conference in Kampala on Tuesday, 26 July 2022, several panellists highlighted how  the tourism sector is a potential driver of Uganda’s post Covid-19 recovery.

Stephen Asiimwe, executive director of the Private Sector Foundation Uganda pointed out that a tourism fund similar to one started in Kenya during the President Mwai Kibaki era is necessary to accelerate tourism related investments.

“Give Uganda Tourism Board (UTB), tourism related agencies and the ministry and Uganda’s missions abroad a bigger budget to sell Uganda,” Asiimwe said.

He added: “We are not exploiting our national airlines as a marketing tool. Most countries use their national airline to push the brand. Going forward Uganda airlines should be given that space to push our national brand.”

Lilly Ajarova, the Uganda Tourism Board Executive Director noted that the “Explore Uganda, the Pearl of Uganda” destination brand campaign was recently launched.

Explaining the brand campaign, she noted that like a pearl, Uganda is rare and precious.

“All that is in the African continent is also found in Uganda. Uganda has it all, that is our uniqueness. We cannot only single out a single product, this makes Uganda a value destination,” Ajarova said.

She pointed out that one can see the mountain gorillas, the big five wild animals, experience culture, agro-tourism, faith based tourism and climb the mountains without travelling to other African countries. She noted that of recent, UTB is promoting domestic tourism.

“We need every Ugandan to be an ambassador of Uganda as a destination,” she said.

Speaking at the conference, Luis Lechiguero, a Spanish national and tourist, said that Uganda has full potential because it has nature, wildlife, cultural diversity, the weather, the food, music, handicrafts and a fully English proficient welcoming and friendly population. “Uganda only needs some investment,” he said.

He explained that Spain a country with a similar population as Uganda — around 45-46 million people – received 83 million visitors in 2018 and that year the sector contributed 15% to the GDP. That is 190,000 million euros and 3 million jobs and many lives changed, he said.

“We are asking you to adapt your products and financial instruments to the tourism sector. We are proposing you, the 25 commercial banks in Uganda to join EU and the interested development partners under the Sustainable Business for Uganda Platform where we have a working group for the chess to finance to come together and explore new modalities of support to tourism,” he said.

“We are asking you to adapt your products and financial instruments to the tourism sector. We are proposing you, the 25 commercial banks in Uganda to join EU and the interested development partners under the Sustainable Business for Uganda Platform where we have a working group for the chess to finance to come together and explore new modalities of support to tourism,”

Luis Lechiguero, a Spanish national and tourist,

“We have resources available for studies, data collection for producing evidence that can guide us on how to advance in the goal to support the tourism sector,” he added.

Lechiguero said Uganda today has 3400 hotel establishments, meaning 200,000 rooms and 300,000 beds.

“It employs 400,000 people directly & reaches 700,000 families indirectly. The 2019 revenue was around 1.6 billion dollars. At its peak in 2018, Uganda received 1.5 million visitors but it dropped to 150,000 in 2020 with huge loses of the sector,” he said.

Uganda Tourism Board chairman Daudi Migereko said despite tourism and hospitality being a highly productive sector of the economy and the biggest foreign exchange earner, it was given only 5% of the loanable money from Uganda Development Bank (UDB).

“We appeal to banks to pick interest in tourism just like the energy sector. We need to work hand in hand to ensure that the Namugongo Shrines, Source of the Nile, the Equator e.t.c are conserved,” he said.

The Vice Chairman of the Uganda Bankers Association, Julius Kakeeto, delivered his welcoming remarks and emphasized the ripple effect that Tourism has on other sectors of the economy; Trade & Investment, Construction, Financial Services and Manufacturing.

“Over 435bn in credit financing had been disbursed to the larger tourism industry and support sectors excluding the real estate sector by close of 2021. This figure will grow as opportunities for banks to finance recovery and growth of the sector in the medium term(2-4years),” he said.