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How UDB shielded Uganda’s economy from economic shocks during Pandemic!

Total loans approved between August 2020 and December 2021 for the three sectors of Primary agriculture, agro-processing, and manufacturing alone were UGX.695billion of which UGX.459 billion has been disbursed to date.

Total loans approved between August 2020 and December 2021 for the three sectors of Primary agriculture, agro-processing, and manufacturing alone were UGX.695billion of which UGX.459 billion has been disbursed to date (PHOTO /Courtesy)

KAMPALA – Uganda Development Bank Ltd (UDBL), Managing Director Ms. Patricia Ojangole, has explained in detail, how the bank, a national Development Finance Institution helped to buffer the country’s economy from economic turmoil during coronavirus-driven lockdowns.

Speaking to reporters in Lira City, Ms. Ojangole revealed that UDB has since approved projects worth UGX.926 Billion of which a total of UGX. 589 billion has so been disbursed into the Ugandan economy to support businesses during the Covid-19 pandemic period (August 2020, to date).

This disbursement, she said the represents the largest investment in the post-COVID recovery effort in Uganda where the government through UDB is prioritizing growth through localized value addition, production, and import replacement in alignment with the National Development Plan III.

The funds were deployed to support the resilience and fast recovery of the economy during and post the pandemic to through import replacement and export.

“At the onset of the pandemic, the Government implemented a raft of measures to support the resilience and a faster recovery of the country’s economy. As part of these measures, the government committed to capitalizing UDB with UGX. 1 trillion; out of which UGX.585 billion was extended to the Bank as part of additional funding. Of the UGX 585 billion, Ush455 billion was to be deployed to support the economy to be self-sustaining during the pandemic and was extended to the three key economic and productive sectors of Primary Agriculture, Agro-Industry, and Manufacturing. There is evidence that indicates that the economy is responding well despite the conditions brought on by the pandemic, a trend that is likely to continue now that the economy is being fully opened,” Ms. Ojangole, explained.

She added: “The number of agriculture and manufacturing projects that use agricultural produce as input has tremendously increased in the past years, which is an indicator that UDB financing is connecting the farmer and processor to a final consumer of quality Ugandan-made goods.”

Uganda Development Bank Ltd (UDBL), Managing Director Ms. Patricia Ojangole,

Uganda Development Bank Ltd (UDBL), Managing Director Ms. Patricia Ojangole (PHOTO /Courtesy)

Total loans approved between August 2020 and December 2021 for the three sectors of Primary agriculture, agro-processing, and manufacturing alone were UGX.695billion of which UGX.459 billion has been disbursed to date.

Disbursements are ongoing for the un-disbursed amounts in line with project implementation milestones.

Ms. Ojangole added that financing a diversity of manufacturing enterprises complements the government’s effort to realize increased industrialization in the country.

“Local manufacturers embraced the government call for import substitution and started or scaled up the production of essential and imported products like masks, sanitizer, plastics, textiles, and paper products among others. Uganda not only became self-sufficient but also exports some of these manufactured products to the region and the world,” Ms. Ojangole said of further evidence of the performance of the government policy.

Other sectors where UDB invested during the period are human capital development (health and education services), infrastructure, and tourism, accounting for 22% (or UGX.130 billion) of the bank’s total disbursements

The tables below summarize the disbursements registered between August 2002 and 31st December 2021.

NoSectorTotal
1 Agro-Industrialization 175930173261
2 Manufacturing 163229525519
3 Primary Agriculture 119795580926
4Health and Education Services14296305000
5 Infrastructure 42464364420
6 Tourism & Hospitality 50401946902
7Others 22957702000
8 Total 589075598028

UDB’s mandate is to accelerate social-economic development in the country through sustainable financial interventions. Consistent with its mandate, the Bank supports projects within the private sector that demonstrates potential to deliver high social-economic value, in terms of job creation, improved production output, tax contribution, and foreign exchange generation among other outcomes. The development outcomes (ex-ante) upon implementation of the approved projects registered between August 2020 and December 31 2021 are as summarized below;

Table1: Ex-ante Development Impact of Approved Projects (August 2020 Dec 2021)

SectorsAmount ApprovedDirect JobsOutput Value (UGX Bn)Tax (UGX Bn)Forex (UGX Bn)
Primary Agriculture 118564378911471892623164.1051004
Agro-Processing3906894998151687847517891036
Manufacturing 18596610501735561216.8157.6140.72
Health and Education85924972605579482211
Infrastructure972420190002309166191
Tourism47876159483372026337103.12
Total92626313483174249950711892286

In her closing remarks, Ms. Ojangole applauded the government’s support and commitment to strengthening the Bank’s capital base as it delivers its mandate to improve the quality of life of Ugandans. The Bank will in 2022 and beyond, focus on expanding its contribution to the country’s development, and will among other interventions, focus on widening its reach amongst the underserved segments of the population to include the Youth, Women, and SME’s.

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