Financial institutions in Uganda have been urged to partner with international financial organisations to generate long term funds that the local private sector needs for enterprise development and expansion.
The availability of long term financing is still a major challenge for Uganda’s private sector given that most financial institutions depend on depositors’ savings which are often inadequate and unreliable.
In her opening remarks at an African Export-Import Bank (Afreximbank) workshop in Kampala last week, Finance minister Maria Kiwanuka said: “There should be closer collaboration between financial institutions in Uganda, with regional and international financial institutions because it will lead to availability and affordability of long term finance for bankable projects in Uganda.”
Ms Kiwanuka also called for closer cooperation between government and the private sector, saying it will lead to achievement of a “win-win” for sustainable and inclusive growth.
Despite remarkable economic growth, Uganda has continued to struggle with long term financing.
Ms Kiwanuka said medium to long- term finance has been perceived as a major limiting factor to the take-off of the Ugandan economy.
With specific reference to Afreximbank, Ms Kiwanuka said: “Commercial banks, I urge you to engage with Afreximbank to expand your loan portfolios in the long term spectrum. The business entities represented here today, the days of limited credit facilities can become a thing of the past if you listen critically to what these people have for you today.”
She added that: “Credit is a strong contributor to a nation’s economic development and we cannot expect our businesses to thrive without it. The participants should take aantage of the facilities offered by the Afreximbank. On the government side we aim to provide an enabling environment for private financial institutions to widen and deepen the scope of their services.”
Ms Kiwanuka said the Finance ministry’s role is to ensure that development projects are well financed, adding that from experience, providing such resources requires the collaboration between the private and public sector entities.
SOURCE: Daily Monitor