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The Deputy Speaker exiting the Chamber after chairing the Wednesday, 05 February 2025 session
The country’s national development finance institution is lined up to receive US$275 million to accelerate socio-economic development in the country.
The Minister of State for Finance, Planning and Economic Development (General Duties), Hon. Henry Musasizi, tabled a request for government to borrow the monies to capitalise the Uganda Development Bank Limited (UDBL).
“The loans are to increase the capacity of UDBL to provide long-term development finance, to facilitate trade and support small and medium sized enterprises and infrastructural projects in Uganda,” Musasizi said.
In tabling the loan request, Musasizi said that government is seeking $150 million from the Arab Bank for Economic Development in Africa, $25 million from Opec Fund for International Development and $30 million from International Islamic Trade Finance Corporation.
Additionally, a guarantee is being sought for UDBL to borrow up to $40 million from the Islamic Development Bank Ltd and $30 million from the Islamic Corporation for the development of the private sector.
Musasizi tabled the loan request during the plenary sitting chaired by the Deputy Speaker, Thomas Tayebwa, on Wednesday, 05 February 2025
The minister said that once the above loans are secured, UDBL will be able to realise and accelerate it strategic plan in Uganda, through various interventions drawn from Uganda’s current economic and social challenges.
The bank’s capitalisation by November 2024, Musasizi noted stood at Shs1.5 trillion, which he said is too low thus limiting the bank’s ability to carry out its mandate.
“Uganda Development Bank Limited’s funding needs have exponentially grown over the last two years, and the bank needs to disburse an average of Shs1 trillion per year in new disbursements,” said Musasizi.
According to Musasizi, the loans being sought are justified saying UDBL is the only bank that can offer favourable and long-term capital, lending at no more than 15 percent interest per annum.
“This funding will enable UDBL to provide long-term capital that is not readily available on the market and address the liquidity crisis that the Bank is experiencing,” he said. The bank’s investment is focused on agro-industry, primary agriculture, tourism and hospitality, human capital, Infrastructure, manufacturing and services sub sector.
Tayebwa sent the loan request to the Committee on National Economy for processing and report back.
Source:Parliament of Uganda