News and Views
Uganda: Traders, government fail to agree on loan rates
Efforts by a parliamentary committee and government officials to dissuade traders from closing their shops tomorrow over the high interest rates on loans failed yesterday when the parties disagreed on the way forward.
The traders also plan to withdraw their savings from banks and suspend depositing of money on their accounts for three days. Governor Bank of Uganda Emmanuel Tumusiime Mutebile was heckled when he asked traders to exercise patience, insisting that all will be sorted when inflation falls.
Lawmakers on the National Economy Committee initiated the one-day meeting to help generate what they called practical solutions to ongoing economic problems and the high lending rates banks levy. However, traders emerged out of the meeting vowing to carry on with the planned strike due tomorrow.
The eight-hour-long consultation was dubbed the stakeholders’ meeting and attracted MPs, ministers, bankers, Kacita, manufacturers, teachers and the private sector, among others.
The consortium of Kampala City Traders Association (Kacita) officials, teachers and manufacturers insisted on urgent government intervention, prompting Prime Minister Amama Mbabazi to propose another meeting scheduled for today afternoon.
“Today’s meeting was inconsequential and the status quo remains. There have not been any solutions reached and come Wednesday, we are withdrawing our money from the banks and closing shops for three days,” said Kacita chairperson Evarest Kayondo. He added: “All we want now are solutions and not the ministers’ and bankers’ lengthy explanations.”
The meeting comes days after MPs on the National Economy Committee summoned the stakeholders to try and avert a likely strike by Kacita.
Yesterday’s meeting was presided over by the Natural Resources Committee chairperson, Mr Stephen Mukitale, and attended by State Minister for Finance Fred Omach and Trade Minister Amelia Kyambadde.
What is at stake?
The traders complain that BoU increased the Central bank Rate, which prompted commercial banks to raise their primary lending rates. But Standard Chartered Bank Managing Director, Mr Lamin Manjang, who is also the chairperson of bankers, said they were forced to increase lending rates on both old and new loans in response to the economic situation.
Mr Mutebile dealt the last blow when he insisted that nothing could be done until the economy improves. Mr Mbabazi said: “We share in your problems, I mean, it is obvious that the rising interest rates are affecting you but what is the solution? It can’t come by force, not by you Kacita otherwise you will be hurting yourselves and the manufacturers.”
Ms Kyambadde shed tears as Mr Marks Mboizi, a teacher at Bat Valley Primary School in Kampala, narrated teachers’ plight and how their properties are being attached by banks after they failed to repay loans.