Finance Minister Henry Musasizi says commercial banks will be central to delivering Uganda’s Tenfold Growth Strategy, with calls for expanded lending to SMEs, mining, tourism and agro-processing.
Uganda is looking to commercial banks to put more capital behind the private sector as the government seeks to turn its Tenfold Growth Strategy into faster economic growth and industrial development.
Finance Minister Henry Musasizi has urged Bank of Baroda Uganda to deepen financing for small and medium-sized enterprises, mineral development and tourism, while maintaining its support for agriculture.
Speaking during a meeting with Bank of Baroda Uganda Executive Director Deepak Kumar and Managing Director Chandan Singh at the Ministry of Finance, Musasizi said more than 70% of Uganda’s ambitions would ultimately have to be delivered by the private sector.
That, he argued, makes the banking sector an essential partner in the country’s economic transformation.
“The private sector cannot flourish without the intervention of commercial banks,” Musasizi said, according to the ministry.
The minister praised Bank of Baroda for aligning its lending portfolio with the Tenfold Growth Strategy and singled out its contribution to the Agriculture Credit Facility (ACF), a government-backed programme intended to increase access to affordable agricultural finance.
But he urged the lender to look beyond agriculture and increase support for sectors that could broaden Uganda’s economic base, including SMEs, iron ore and other minerals, and tourism.
Agriculture still dominates lending
Bank of Baroda said agriculture accounts for about 33% of its loan book, reflecting its role in financing some of Uganda’s major agricultural value chains.
Kumar said the bank had financed activities spanning sugar, dairy, cotton and coffee processing, alongside other agribusiness ventures.
Its lending also extends into hospitality and travel, as well as Uganda’s cement, steel and mining industries.
The bank wants the government-backed agricultural financing window to become larger and more flexible.
Kumar proposed increasing the Agriculture Credit Facility from Shs10bn to Shs20bn, saying the additional financing would allow the bank to support more agro-industrial value chains.
He also called for the facility’s mandate to be expanded to include infrastructure projects.
The proposal comes as Uganda attempts to move its economy further up the value chain, with policymakers increasingly emphasising agro-processing, manufacturing, minerals and services rather than dependence on exports of unprocessed commodities.
For commercial banks, however, expanding lending into these sectors will require balancing the government’s development priorities with the risks and long repayment periods associated with large-scale projects.
The meeting nevertheless underscored a central feature of Uganda’s growth strategy: the state may set the direction, but much of the investment needed to deliver it will have to come from private capital and the financial institutions that mobilise it.
