By Our Reporters
After the successful reintroduction of Uganda Airlines, President Museveni’s appetite to revamp government parastatals is clearly now on the rise. Credible sources tell Mulengera news that the big man from Rwakitura has now signaled his key economic advisors to commence a comprehensive study on the viability of the establishment of a huge government-owned commercial bank.
The team, whose members are already caucusing and will soon begin undertaking benchmarking trips and studies abroad, is working closely with Planning Authority technocrats and the Finance Ministry.
Sources close to him say Museveni’s major motivation is largely because he has come to the conclusion that there is no way you can tame the rampaging interest rates (price for borrowing) and avail your business sector access to cheap affordable credit without yourself (as government) being in the same financial market.
It’s understood that even for the revival of the National Airline, an initially reluctant Museveni was made to see how private airlines were exploiting his people through high prices that government could easily have forced down if it had its own airline operating as a pace-setter for the industry. “The political decision to establish something similar to the purpose which UCB ideally served during its hey days has already been taken and the H.E. [M7] wants quick results. What is largely remaining a hurdle is how to proceed. Which model are we to use merging the ones now existing as PostBank, Pride Microfinance and Housing Finance into one commercial financial institution. They seem to currently be pursuing different mandates and yet these are the ones that are to be ultimately merged into one huge commercial bank owned by GoU. The President is ready to ensure there is adequate capitalization,” says one of the Museveni influential assistants when it comes to finance and economic matters.
There is optimism that the Prof Pamela Mbabazi Sabiiti-led new Board at NPA could be prompted to take this as their pioneer assignment since Museveni looks forward to deriving some quick political dividend out of it.
The idea being proposed is that what today exists as HFB can be integrated into the new commercial bank and exist as its mortgage division as the same happens for Pride Microfinance and PostBank Uganda.
Sources say Museveni isn’t bothered about being perceived as if he is politically regretting doing away with what existed as UCB. All he is looking at is the anticipated positive impact on forcing interest rates down. “Today we have Stanbic bank being the largest and even BoU depends on their interest rate to determine what must prevail for the rest of the industry. The president wants this changed so that the pace-setter on whom the regulator benchmarks is a government-owned bank just like he is wishing to see for UTL playing a market leader role in the telecom industry,” explained one of the Museveni assistants thickly involved in the efforts aimed at fast tracking the revival of a vibrantly powerful government-owned commercial bank. (For comments, call, text or whatsapp us on 0703164755 or email us at mulengera2040@gmail.com).
