Uganda’s agriculture sector, both agro-industry and primary agriculture as well as manufacturing have emerged as the leaders in performance of the products offered by the Uganda Development Bank (UDB) according to a statement issued recently.
The Bank released a mid-year update covering the period July-2020-July 2021. In total UDB approved loans worth UGX 649Billion in the reporting period. A total of UGX 362 Billion was disbursed according to the Bank.
“The reporting period significantly covers economic activity during the on-going COVID19 national emergency including two lockdowns in 2020 and in 2021 during which government policy focused on import substitution and value-addition investment for export,” the Bank says in a statement.
UDB is Uganda’s only Development Finance Institution through which the government, which is the principal shareholder in the Bank, pursues economic interventions.
“The positive performance of Agro-industrialization, Manufacturing and Primary agriculture suggests that economic recovery, growth, and resilience is in sectors targeted by government policy,” UDB says.
Approvals for Agro-industrialization topped UGX 268Billion while Manufacturing accounted for UGX158Billion and Primary Agriculture UGX 104billion.
These sectors are followed by health services, infrastructure, tourism and hospitality and education services.
UDB lending targets the entire country to maximize the impact on the economy and guided by government policy, widen the net of participation in the account opening form(aof) approvals.
During the reporting period, UDB, in August 2020, received additional capitalization of UGX 455Billion from the Government of
Uganda representing the single largest impact investment of the period and part of government’s stated commitment to raise the capital of the Bank to over UGX 1Trillion shillings. The Bank reports that the full amount of UGX 455 has now been committed to the economy through expedited approvals and disbursements.
More Than Paint: How Kansai Plascon Uganda is Colouring Futures and Building CommunityAs part of this update, UDB is announcing a new strategy to improve its support to special programs like SME, Women and Youth enterprises across Uganda within its priority areas and their eco system.
Under Special Programs, SMEs can now access up to a maximum of UGX720M, Women up to Maxi 900M, Youth maximum of up to UGx540M with minimum amount of UGX50M with simplified requirements such as the filling a single application form.
“The Bank will continue to extend non-financial support to SMEs through business advisory services to strengthen their operations and capacity. The status of utilization of the funds for July 2020-July 2021 is detailed below. “Disbursements are on-going in line with project implementation scheduling as well as the fulfillment of post-approval conditions such as registration of securities
among others.
Effect on the Post-COVID-19 recovery
As Uganda battles the second wave of the COVID-19 pandemic, the economic recovery is dependent on targeted and sustained investment. It is UDB’s mandate to ensure growth in the economy through sustainable financial interventions.
In pursuit of this goal, UDB supports projects within the Uganda private sector with high socio-economic value and the potential to deliver impact in terms of job creation and retention, improved production output, tax contribution and foreign exchange contributions amongst others. In short, the projects UDB supports have significant impact on the economy and associated effect on the post-COVID recovery of the country. The Bank tracks the development impact of its investment and includes these in a Development Impact Report available on its website.
Projections
The ex-ante projections indicate that the projects approved within the reporting period will create significant development impact. A total of 33,785 new direct jobs is expected to be created, and UGX 5.4Tn worth of output value/Turnover from firms financed. These are further expected to generate UGX 497.1 Billion in tax revenue to government and attract foreign exchange earnings over UGX1 Trillion.
