Finance Minister Henry Musasizi has called on the banking sector to reduce lending rates and increase financing to productive sectors to support Uganda’s Tenfold Growth Agenda.
Speaking at the 9th Annual Bankers Conference at Marriott Hotel, Nsambya, Kampala, Musasizi said Uganda’s ambition to grow its economy from US$50 billion in FY2025/26 to US$500 billion by 2040 must be matched by affordable and long-term financing.
“Government cannot deliver Uganda’s transformation alone. We need you and indeed, the banking and financial sector is central to the tenfold growth strategy,” Musasizi said.
The Minister urged banks to bring down the cost of credit, noting that average lending rates currently range between 18% and 20%. He encouraged financial institutions to improve credit assessment, make better use of data within the legal framework, and expand risk-sharing and guarantee mechanisms to reduce the risk premium on loans.
Musasizi also called for increased lending to the ATMS priority sectors (Agro-industrialisation, Tourism, Minerals including Oil and Gas, and Science, Technology and Innovation) rather than concentrating mainly on trade.
He urged banks to work with the Capital Markets Authority to deepen long-term financing through infrastructure bonds, project bonds, green bonds and equity financing.
The Minister further called for financial inclusion to be taken to scale, particularly for the eight million farmers targeted for commercialisation under the Parish Development Model, enabling them to save, borrow, insure, receive payments and invest.
He said private sector credit must rise from Shs 28 trillion today to Shs 490 trillion by 2040, while capital markets mobilisation must increase from Shs 1.5 trillion to Shs 440 trillion.
Government, he added, will continue maintaining macroeconomic stability, pursuing financial sector reforms and working towards expanding Uganda Development Bank’s capitalisation.
UBA Chairperson and Housing Finance Bank CEO, Michael Mugabi reaffirmed the banking fraternity’s commitment to the US$500 billion ambition, saying bank credit alone cannot deliver the scale of financing required.
He called for equity finance, diaspora capital, blended financing, impact funds, sustainability finance and risk-mitigation instruments.
“Our mission without execution is merely an aspiration,” Mugabi said, urging stakeholders to identify financing constraints and develop practical solutions.
Bank of Uganda Governor Michael Atingi-Ego said stability was the foundation for transformation, highlighting 6.4% real GDP growth, 3.3% inflation over the 12 months to July and a decline in non-performing loans to 2.67%.
Atingi-Ego urged banks to match credit expansion with deposits, long-term funding and capital, and called for pension funds, insurance companies, development finance institutions and capital markets to complement bank financing.
He challenged financial institutions to submit measurable ATMS strategies and turn commitments into funded, executable plans.
Uganda’s transformation, he said, requires coordinated action to mobilise capital for farmers, factories, hotels, mines and innovators.
