The Ministry of Finance has announced the finalization of plans to establish a colossal 1 trillion USD Export Credit Guarantee Fund, aimed at bolstering the private sector by providing affordable credit for the manufacturing of export products.
The initiative aligns with the government's broader strategy to enhance Uganda's trade footprint, particularly in neighbouring countries like South Sudan.
Recognizing the significant obstacle posed by expensive credit to Uganda's export market expansion, the Finance Ministry's Permanent Secretary, Ramathan Ggoobi, affirmed,
"The Export Credit Guarantee Fund is a game-changer, addressing the challenge of high lending rates faced by exporters."
While some commercial banks have reduced lending rates to approximately 17%, exporters argue that this remains prohibitively high. The Export Credit Guarantee Fund, with its substantial funding, promises to alleviate this concern and stimulate export-oriented production.
Ggoobi further disclosed that development banks, including the Uganda Development Bank (UDB), are integral to bridging the financing gap.
Applications totalling up to 250,000 USD have already been approved, signalling a swift response to the financial needs of businesses.
The government's proactive approach extends to enhancing the capacity of government-owned banks, such as Post Bank, with a focus on expanding the credit base not only domestically but also in neighbouring countries.
The aim is to support sectors like agriculture, even in regions with perceived risks such as South Sudan.
In a follow-up meeting emphasizing accountability and progress evaluation, Mary Goretti Kitutu, the Minister for Karamoja Affairs, representing Prime Minister Robinah Nabbanja, underscored the commitment to monitoring the advancements in government systems.
