These banks are bloodsuckers, let them lend to traders who go to China — Museveni
"That is why we should say to the commercial banks, bye-bye you, continue with your traders that go to China, lend to those but to our manufacturers we shall give them low cost money of not more than 12%.”
ECONOMY | Ramping up support and funding toward Uganda Development Bank (UDB), President Museveni went beyond a swipe, describing commercial banks as “bloodsuckers working to destroy Uganda’s manufacturing industry with their expensive loans.”
“You should support my plan to put more money in UDB so that it can lend to manufacturers at never more than 12% per year,” Museveni said, sneering at anything beyond and above 12% as “just theft.”
“That is why we should say to the commercial banks, bye-bye you, continue with your traders that go to China, lend to those but to our manufacturers we shall give them low cost money of not more than 12%.”
The president made the remarks Friday morning while addressing NRM legislators at the National Leadership Institute in Kyankwanzi where he asked the ruling party MPs to support his proposal to financially boost UDB so as to extend cheaper loans to stir growth in the manufacturing sector.
Museveni threatened to withdraw funding to commercial banks, saying they were bloodsuckers with whom sharing resources is out of the question.
“We are going to withdraw our money from those banks as you know, they have their agents in the government system. How can you share with a bloodsucker? I don’t want any more sharing in those commercial banks,” he said.
During the reading of the 2016/2017 Budget, the government announced plans to recapitalise UDB to a tune of Shs500 billion and, presently, over Shs200 billion has been injected into the bank with the balance awaiting the subsequent financial years.
Among the key functions of a development bank to an economy is providing long-term finance for development projects which are deemed both economically and socially viable. Such projects are the types for which commercial banks might not have the risk appetite.
Development banks help governments avoid a mismatch between short-term financing and long-term projects and also determine price of development projects using a business-oriented approach.
The NRM chairman also called on the Ministries of Finance, and Energy to ensure that the cost of electricity is reduced for the manufacturers but the people who catch grasshoppers and disco goers shouldn’t expect the same gesture, arguing these should continue paying at the current rate.
“If you don’t we will not compete with other countries. It is not good to just be blind in the world, you need to know what is in the world and how you can survive. Ethiopia has low cost of electricity, you need to get the example of Ethiopia,” Museveni said.
The president said that as much as many people are worried about students leaving institutions of learning without acquiring requisite skills, the situation isn’t as bad as being reported because even if somebody isn’t technical but educated, he can easily be shaped.
“This stampede that they don’t have skills, an educated person can go where he can go, there are so many things he can do better with that education. I am not really worried about the capacity of labour force in terms of technology even the lawyers and literature graduates are more capable of becoming commercial farmers,” Museveni said.
Uganda has a total of 24 commercial banks all licensed and supervised by Bank of Uganda.