ICYMI: Banks Announce Shs.One (1) Trillion Loan Facility to Support Ugandan Exporters
chimpreports.com, October 18, 2022 2:23PM | The Uganda Bankers Association (UBA) has unveiled a special Regional Export Facility (REF) of UGX 1 trillion to support Ugandan exporters to regenerate and grow export volumes to regional markets.
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| File Photo/Courtesy: Uganda Banker's Association (UBA) officials unveiling a special Regional Export Facility (REF) recently. |
Speaking at the ceremony in Kampala on Tuesday, 18 October 2022, UBA chairperson Sarah Arapta said the REF initiative has been developed as a special intervention championed by financial institutions to support economic recovery given the post-Covid effects that saw global, regional and local markets locked down for at least 2 years.
“Uganda has a strong manufacturing and trading hub capable of serving the regional markets which if well leveraged could be a key engine of growth,” she said.
Mr Wilbrod Owor, the executive director of Uganda Bankers Association, said the loan will be provided at 12% interest per annum over a period of 3 months to 5 years.
“Interest rate for the UGX1 Trillion facility is 12% per annum. That’s 1% per month if you are borrowing in UGX. For the US$ it is 6% per annum for a period of 3 months to 5 years. The financial institutions are responsible for the due diligence of awarding these loans effective November 1,” he announced.
Owor urged exporters to take advantage of the opportunity.
“We have exporters who fall in a number of categories. We need to work on the warehousing and the logistics companies, if we are to make the market in Congo, South Sudan and Burundi viable. We have the Uganda air cargo, if it needs to make 10 flights a day, so be it,” he said.
Goods manufactured in Uganda for export to the region include construction products like cement, steel bars, iron sheets, paint, and others. Fast-moving consumer goods include scholastic materials, personal care products like cosmetics, textiles and foam products.
The regional markets will include South Sudan, DRC, Rwanda, Burundi, Kenya, and Tanzania among others.
The executive director of Private Sector Foundation Uganda, welcomed the funding.
“I have been told before that in business you find the gap, and you market the gap. I thank UBA for finding that gap and marketing it,” he said.
“As PSFU, we commit to take this to all our members, we also commit to popularise this initiative, we shall also ensure that our members take it up, PSFU will also take this to the Africa Continental Free Trade Area and also try to reduce bottlenecks to trade within region,” he added.
Mr Odrek Rwabwogo, a farmer and entrepreneur, urged exporters to make full use of the facility to improve their services.
“Let’s focus on issues of compliance, think through food safety laws, for instance, if we want to compete, develop commercial strategy to approach export markets, run border facilities to ease trade for the other side, not Uganda & export credit financing,” he said.
“$500m was lost in the FY2020/21 due to the covid-19 occasioned lock downs. So thank you all for coming together to work on what matters the most. The private sector needs to be helped to thrive. No country walks into matters of exports casually,” he added.
Jemba Mulondo from KACITA said the loan will help cushion them from the huge operating costs.
“It costs $7,000 to $10,000 to move a container from Mombasa to Kisangani and could take about 21 days, depending on situation in the DRC. This is a huge cost, the UGX1 Trillion facility should enable us cushion some of these costs of doing business,” he said.
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