KAMPALA, August 26, 2026 — The Minister of Finance, Planning and Economic Development, Henry Musasizi, has called on the Uganda Bankers’ Association [UBA] to work towards lowering the cost of credit and making financing more accessible to sustainably support Uganda’s Agro-industrialisation, Tourism development, Mineral beneficiation, and Science and Technology [ATMS] agenda.
The minister made the remarks yesterday while meeting representatives of UBA at the Finance Ministry headquarters in Kampala to discuss ways of strengthening the partnership between the Government and financial institutions in Uganda.
The UBA delegation was led by its Vice-Chairperson, Grace Muliisa, who is also the Managing Director and Chief Executive Officer of Ecobank Uganda.
UBA is the umbrella organisation for licensed commercial banks supervised by the Bank of Uganda [BoU].
Musasizi, who was accompanied by BoU Governor Michael Atingi-Ego, urged UBA to work with the Government to lower interest rates.
He said he was encouraged by the financing structure that is increasingly being directed towards the ATMS priorities.
The Government’s ATMS strategy seeks to transform Uganda’s economy from an estimated US$50 billion to US$ 500bln by 2040. The domestic banking industry has a crucial role to play by providing affordable and sustainable financing to businesses and other participants in the economy, although commentators say local banks remain largely risk-averse.
On the other hand, Musasizi thanked Uganda’s private sector for embracing the ATMS agenda.
On her part, Muliisa said UBA was committed to supporting the Tenfold Growth Strategy by mobilising funds to expand private-sector growth while working towards a gradual reduction in interest rates.
According to the Finance ministry’s latest Performance of the Economy Monthly Report July 2026, the lending rate on shilling-denominated credit fell for the third consecutive month [since April 2026], declining from 18.00 percent in May 2026 to 16.93 percent in June 2026. This decline, according to the report, was mainly attributed to lower risk premiums on loans following continued improvement in economic activity.
Meanwhile, the meeting also discussed tax matters affecting the banking and financial services sector, including the treatment of income and expenses relating to government securities.
UBA Executive Director Wilbrod Owor called for the fast-tracking of financial sector reforms that will support the country’s transformation agenda.
The BoU Governor said the resources required to achieve tenfold growth were enormous, making it necessary to bring the private sector on board.
He also noted that domestic savings were insufficient to finance the scale of investment required, calling for innovative approaches to mobilise external financing.
According to financial experts, Ugandan banks are profitable enough to support the Tenfold Growth Strategy, but their current business models are not yet sufficiently aligned with the strategy’s ambitions.
The experts said industry treasury investments in Uganda stood at Shs 23.3 trillion in 2025, of which Shs 18.9trn was invested in government securities. In addition, Ugandan banks mobilised Shs 41.3trn from customers last year. However, they lent only Shs 23.6trn back into the economy.
“This means that just 57 per cent of every shilling entrusted to banks finds its way into businesses, farmers, manufacturers and entrepreneurs. The remaining 43 per cent is largely parked in government securities and other low-risk assets,” the experts said.
They said the current financing approach remained conservative, yet the ATMS agenda required greater risk-taking and longer-term investment.
The Ugandan Government is betting heavily on agro-industrialisation, but agricultural lending remains one of the smallest and riskiest segments of bank financing.
According to government, tourism is expected to become a major foreign exchange earner, yet few banks offer specialised financial products tailored to the sector.
Mineral beneficiation requires long-term financing, while most banks rely heavily on short-term deposits to fund their lending activities.
Similarly, science and technology enterprises require venture capital, yet commercial banks are generally not structured to provide venture financing.
This mismatch between the type of financing available and the long-term capital required by the ATMS priorities has created what experts describe as Uganda’s financing paradox — substantial liquidity exists within the financial system, but much of it is channelled into low-risk assets rather than productive, long-term investments.
https://thecooperator.news/eac-banks-urged-to-finance-skills-markets-to-drive-industrial-growth/
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