EADB Country Manager, Francis Ogwang, also responded to the calls by the Minister to invest in job-creating ventures, saying their lending strategies were in line with the government priority areas as set out in the National Development Plan and the Parish Development Model.
The government of Uganda has assured the public that the ongoing changes in the UN aid and donor policies may have consequences on the country but that the economy will not suffer as feared by many.
Speaking at the first interaction between the East African Development Bank (EADB), its shareholders and clients, Minister of Finance, Planning and Economic Development Matia Kasaija urged the international community to respect Uganda and East Africa’s independence.Kasaija said the region and the EADB in particular have overcome many challenges and should now be ready to power development.
He added that in order to avoid the effects on any policy changes of the donors Uganda and the region must strategise and prove they can withstand pressure protect their independence, calling for respect for the country’s sovereignty.
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Over the last three weeks, US President Donald Trump has been implementing some of his campaign promises including withdrawing from some UN Agencies like the World Health Organisation, as well as suspending and restructuring the US Agency for International Development (USAID), the country’s agency responsible for administering civilian foreign aid and development assistance.
These actions mean the US will withhold billions of dollars that flow into the developing world to both government and private sector programs.
Asked about the likely effects of the President Donald Trump’s Executive Orders, Permanent Secretary and Secretary to the Treasury, Ramathan Ggoobi, said Uganda will continue moving forward.
Giving the example of the World Bank sanctions over Uganda’s ant-homosexuality law, Ggoobi similar events have happened before but that the country has come out strong, with good strategies.
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According to recent information, USAID's total annual grants to Uganda in 2023 are estimated to be around 83 million dollars equivalent to about 300 billion shillings.
A significant portion was dedicated to supporting refugees in the country through the World Food Programme, while other beneficiaries were in the media, health, education and agriculture sectors.
Minister Kasaija urged EADB, partner banks and the private sector to invest in projects that create jobs especially for the youth, to help tackle the problem of graduate youth unemployment.
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EADB was established in 1967 under the Treaty of the then East African Cooperation between Uganda, Kenya and Tanzania, but following the breakup of the EAC in 1977, the bank was re-established under its own charter in 1980.
In 2008, following the admission of Burundi and Rwanda into the new EAC, Rwanda applied and was admitted into the EADB, while Burundi is due to join.
The bank offers a broad range of financial services in the member-states, with the main objective being strengthening socio-economic development and regional integration.
One of the private sector clients, Ben Kavuya, proprietor of East African Medical Vitals, urged EADB and other development financial institutions to make financing for development more accessible by reducing interest rates, proving longer maturity periods and remove collateral and a requirement.
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However, Centenary Bank, one of the client banks, said the lines of credit that EADB offers them have made it possible for the commercial bank to lend at lower interest rates.
Fabian, Kasi, the Centenary Bank Managing Director, said they can, for example lend to groups at 14 percent, though, he adds that this is still high.
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This was corroborated by the EADB Country Manager, Francis Ogwang, who says that the interest rates on their credit lines to commercial banks is capped at 14 percent.
He said they are working with the Ministry of Finance and the board to find ways of reducing this rate further, so as to make the investments out of the EADB loans more competitive.
On the collateral framework, Ogwang said they accept the project being financed to act as collateral, which makes it easier than the system used by commercial banks.
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Ogwang also responded to the calls by the Minister to invest in job-creating ventures, saying their lending strategies were in line with the government priority areas as set out in the National Development Plan and the Parish Development Model.
