Contractors in Uganda’s construction sector have been urged to adopt sound financial discipline and strategic partnerships to improve access to bank financing.
Geofrey Ssebaana, CEO of Diamond Trust Bank, delivered this call while speaking at the Construction Procurement and Finance Dialogue organised by the Uganda National Association of Building and Civil Engineering Contractors (UNABSEC).
He emphasised that improved financial management and forward-thinking practices are essential to build lender confidence and unlock the long-term capital necessary for growth in the sector.
“The banking sector is ready to support the construction industry. But this support must be matched with accountability and transparency on the part of contractors,” Ssebaana said.
He acknowledged persistent financing challenges but noted that banks are increasingly offering flexible, innovative solutions tailored to the needs of contractors, thanks to recent capital reforms that have improved the resilience of Uganda’s financial institutions.
He encouraged contractors to see themselves not as outsiders to the banking system, but as core partners in Uganda’s development agenda. “You are not peripheral players we see you as key collaborators in building this nation’s infrastructure,” Ssebaana said.
In response to calls for lower interest rates on construction loans, he explained that the pricing of credit is influenced by liquidity costs, operational expenses, and regulatory requirements. However, he noted that interest rates are gradually falling, from over 20% to around 18%.
Despite this progress, Ssebaana warned about practices such as misusing funds for unrelated projects known locally as komingolingo which erode trust between banks and contractors. He called for professionalism and financial discipline if the sector is to thrive.
Gen. Edward Katumba Wamala, Minister of Works and Transport, echoed the need for trust-building between banks and contractors.
He blamed delayed government payments for the current tensions and urged banks to reconsider the loan terms offered to local firms.
“It is unacceptable that our Ugandan contractors borrow at 20% interest, while international firms access credit at just 4%,” Katumba said, calling for a dedicated construction financing window similar to those available for agriculture.
He also urged the Public Procurement and Disposal of Public Assets Authority (PPDA) to tighten regulations around local contractor classification. According to the minister, shell companies often help foreign firms unfairly win contracts intended for locals.
To enforce local content more meaningfully, Katumba proposed that for every 10 kilometers of road construction, at least three be executed entirely by local firms from sub-base to final surfacing.
UNABSEC President Kiara Binta Nkuranga welcomed the renewed collaboration between contractors, government, and banks, calling it a timely intervention.
“Together, we will transform dialogue into action,” she said, adding that as the industry undergoes reforms and faces growing competition, alignment between financial institutions and construction stakeholders is critical.