Museveni warns against internal borrowing
President Museveni
What you need to know:
- Mr Museveni also commended the banking and financial services sector for their effort to align with the National Development Plan.
President Museveni has raised the flag on excessive domestic borrowing and urged the government to reduce the trend.
He made the remarks during a meeting with members of the Uganda Bankers Association (UBA), held at State House on November 2.
“Uganda is devising means on how to reduce or stop borrowing especially internally as it is not necessary,” a statement about the meeting reads in part.
The President’s remarks come barely a week after reports of a plan by the government to borrow Shs1.7 trillion to finance the country’s development and infrastructure budget for the current financial year from Standard Chartered Bank.
The Finance ministry’s permanent secretary and secretary to the Treasury, Mr Ramathan Ggoobi, said the ministry has put in place several measures to stop internal borrowing citing fiscal consolidation, restoration of fiscal discipline, clearing the domestic debt and disciplining accounting officers among other measures.
Mr Museveni also commended the banking and financial services sector for their effort to align with the National Development Plan.
“In the past commercial banks have been aligned to net-colonialism, supporting imports of consumer goods. I am glad we are beginning to see a change if you have started to support agriculture and export promotion,” he said.
The President had earlier expressed disappointment at people who have failed to put an end to Africa’s haemorrhage saying they have continuously supported foreign industries thereby betraying Africa’s purchasing power.
“It is really betrayal, African elites have betrayed Africa and this has led to purchasing power not growing,” he added.
Responding to a query by UBA chairperson, Ms Sarah Arapta, regarding land evictions where borrowers use encumbered land as collateral, Mr Museveni said banks should always conduct due diligence, especially where the land is occupied by bonafide tenants and advised that they should not accept encumbered land titles.
Ms Arapta pledged the body’s commitment to supporting government development plans singling out the Parish Development Model (PDM), digital transformation to drive financial inclusion, promote domestic manufacturing as well as support the growth and development of commercial agriculture among other areas.
