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🇺🇬 Uganda /Economy & Trade

Ugandan Bankers Seek New Financing Models to Drive Tenfold Economic Growth

From AllAfrica Uganda · () English

Translated from English and summarized by DistantNews. Read the original for the full story.

At a glance

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  • Uganda’s banking sector says the country must move beyond conventional commercial loans to finance its target of growing the economy tenfold by 2040.
  • Proposed tools include capital-market funding, patient capital, structured and project finance, public-private partnerships, digital finance and greater mobilisation of domestic savings.
  • The proposals will be discussed at the ninth Annual Bankers Conference on September 18, which will bring together public and private-sector stakeholders.

Uganda’s ambition to grow its economy from about $50 billion to $500 billion by 2040 is forcing the banking sector to rethink how it provides capital.

Bankers say traditional lending alone cannot finance the scale of the country’s development plans. They are calling for greater use of capital markets, patient capital, structured and project financing, public-private partnerships, digital financial tools, domestic savings and institutional investment.

The proposals will be discussed at the ninth Annual Bankers Conference on September 18. The meeting will bring together government officials, financial institutions, investors, private-sector representatives and other stakeholders to consider how Uganda can mobilize and deploy the capital needed for economic transformation.

We must move beyond traditional commercial loans to long-term structured finance, patient capital and innovative financial intermediation.

— Michael MugabiThe Uganda Bankers’ Association chairperson said the country’s growth target requires banks to change how they provide capital.

Michael Mugabi, chairperson of the Uganda Bankers’ Association and chief executive of Housing Finance Bank, said banks would remain central but could not supply all the financing required for long-term development. “We must move beyond traditional commercial loans to long-term structured finance, patient capital and innovative financial intermediation,” he said.

The conference will also examine ways to attract domestic, regional and international investment through capital markets. Such financing could support projects that require large sums and take longer to generate returns. Bankers see structured financing and patient capital as possible ways to develop investment in oil, gas and minerals by linking future revenues, project cash flows and other assets to financing arrangements.

UBA Executive Director Wilbrod Owor said Uganda needed to finance opportunities in minerals, oil and gas, agriculture and tourism that remain underdeveloped. “Beyond the traditional banking, we must find non-traditional means to power that growth,” Owor said. He argued that the country’s resources should be treated not only as commodities, but also as investment and industrial opportunities.

Beyond the traditional banking, we must find non-traditional means to power that growth.

— Wilbrod OworThe Uganda Bankers’ Association executive director called for new ways to finance sectors such as minerals, oil and gas, agriculture and tourism.
About this summary

Originally published by AllAfrica Uganda in English. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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