Saccos will save government from borrowing expensively from external sources–Minister Kasaija

The Finance Minister, Matia Kasaija has said government can stop external borrowing if Savings and Credit Cooperative Organizations(Saccos) are strong enough to start lending money.

Speaking during the launch of the Emyooga presidential initiative in Greater Bunyoro region at Kibaale district headquarters on Tuesday, Kasaija took a swipe at Ugandans for having a poor saving culture which he said is the reason for poverty in the country.

“If Ugandans were all big savers, there would not be any need for government to borrow from outside at higher interest rates. When I go and borrow from outside, it means there is leakage as the money goes out of the system and country to pay back the loans,”Kasaija said.

The minister explained that through collective saving in form of saccos, Ugandans would be in position to lend money to government and save it from borrowing expensive money from abroad which has become a big problem, considering the high interest rates charged.

“If we had a lot of money among Ugandans, government would borrow from them and the money remains among Ugandans. The interest I would pay would also remain in Uganda for Ugandans”

The minister emphasized the need to put aside some money as savings for future use as one of the ways through which Ugandans can become wealthy.

Through the Emyooga scheme, government targets Ugandans coming together to save in groups and saccos and get seed capital so that they can borrow from their saccos for development.

The new project is aimed at alleviating poverty among Ugandans and is implemented by the Microfinance Support Centre.

The State Minister for Microfinance, Haruna Kasolo warned Ugandans that the main aim of the program is inculcating the saving culture among the public and not to give them money.

“The biggest problem here is mindset. When government introduces a program, many think it is meant to give them money. They also prepare to receive it but in the end they misuse. What we are targeting is the people’s savings. We want people to develop a saving culture as the only way to create wealth,”Kasolo said.

“Even if government gives out money, it is too little to make people rich. What can make them wealthy is through saving and borrowing from saccos for development.”

External borrowing

Government has on several occasions been castigated over the ever increasing public debt which mainly consists of money borrowed from external sources.

Uganda’s public debt stands at over shs48 trillion, will the biggest percentage of this being money borrowed externally, especially from China.

Government has in the recent years borrowed so much money to finance several projects but experts have since warned government over the ever growing public debt .