By Mulengera Reporters
As was instigated by the Finance Ministry, the National Planning Authority (NPA) recently published an impact assessment report indicating ways in which Uganda Development Bank (UDB owned and funded by the GoU) is amplifying efforts to realize President YK Museveni’s very ambitious socio-economic transformation agenda which, among other things, seeks to grow Uganda’s GDP from the current $50bn to $500bn between now and 2040. The assessment by NPA was timed to coincide with the commencement date (July 2025) for the National Development Plan (NDP) 4 whose realization UDB has a big role to play in.
In their assessment report, the NPA researchers point out the export promotion, value addition, job creation and export promotion-related contribution UDB is making. They also point out areas of weakness and propose mitigation measures that have to be prioritized and undertaken for things to get even better. UDB, which chiefly is charged with availing and supporting the private sector with long-term finance or credit, is one of the many vehicles through which the GoU is availing citizens with access to wealth creation funds-the others being MSC, UDC, ACF and others.
The following presentation paraphrases the impact the NPA researchers established to have been caused through the GoU interventions that continue to be channeled through the ED Patricia Ojangole-led UDB:
DETAILED REPORTING:
As of July 2025, UDB was supporting/financing 825 business enterprise projects into which a total of Shs6.05trn has cumulatively been sunk over the years. It was established that between 2018 and July 2025, UDB-funded business enterprises had created 55,553 jobs and produced goods/output worth over Shs6trn. The same projects had made profits worth Shs1.061trn for their proprietors.
In the same period, exports worth Shs1.109trn resulted. The businesses also paid Shs316bn to URA in Pay as You Earn and withholding taxes. The NPA report predicts more enterprise resilience, stronger productivity and growing fiscal returns on the public investment which the GoU has been making towards UDB.
Between 2018 and 2023, UDB-funded businesses had their contribution to Uganda’s GDP grow from mere 1.4% to 3.2%. Their contribution to the country’s export earnings grew from 1.2% to 4.4% and their contribution to the total PAYE collected by URA overall grew from 0.92% to 0.94% in the same period. All this is indicative of the extent to which UDB is contributing to Uganda’s overall production levels’ growth, trade expansion and domestic revenue mobilization efforts.
The UDB-funded projects have also helped government address inclusion-related concerns in favour of youths, women and PWDs as 60% of the 55,553 created jobs went to youths, 31% to women and 2.5% to PWDs. The NPA report praises the Bank for being deliberate about the projects they fund being gender and social-responsive as is supposed to be reflected in UDB’s financing model.
The report also captures a bit of the role UDB’s patient capital or credit played in the resuscitation of private businesses in the post-COVID period. Patient credit is synonymous with the long-term financing which UDB is mandated to provide to amplify a vibrant private sector in Uganda.
UDB funding is also catalyzing enterprises’ growth in Uganda in a multiplicity of ways as is hereby briefly illustrated: some of the borrowers, who took out long-term credit from UDB, demonstrated to NPA researchers how their profitability and product mix had been enhanced and greatly improved as a result of using UDB funding to invest in equipment expansion and refurbishment, in automation, new technologies and infrastructure. This was the experience of 78% of the UDB-funded projects that were sampled.
Yet that is not all. 67% of the UDB-supported businesses said the support had enabled them to become socially and environmentally more responsive than had been the case before the UDB intervention. They are now more able to sustainably support community-level education and health initiatives. 22% of the UDB-supported businesses are now in position to engage in sustainability initiatives such as tree planting and those related to energy efficiency and waste mismanagement reduction.
The report indicates that all this improved efficiency in UDB’s performance has resulted from the deliberate governance, legal and operational reforms that the Bank top management has been implementing in the last 10 years (2016-2025). The NPA report finds that the Bank’s corporate governance practices are currently well aligned with regional and international best practices. Indeed, UDB has irrefutably distinguished itself not only as Uganda’s leading source of long-term development finance but also as a model of excellence whose standards continue to be emulated and benchmarked upon by peer Development Finance Institutions (DFIs) in the region and other emerging economies.
The other compliment in the report is the fact that UDB’s cost-to-income ratio has since declined from 45% it was in 2018 to today’s 31%. This simply means that for every shilling UDB currently spends out, Shs3.2/= is generated. It was Shs2.2/= eight years ago. The report celebrates this growing realization of value for money for the GoU which has been availing trillions for UDB’s capitalization. The same growing value for money has also been enabled because of the UDB management’s consistent and deliberate decision to prioritize borrowers from high-impact sectors like agriculture, manufacturing and infrastructure.
Also celebrated in the report is the fact that UDB was able to reduce reliance on direct government capitalization to 37% in just the five years between 2018 and 2022. And between 2019 and 2022, UDB on its own mobilized $101m (roughly Shs370bn) from 11 international partners. All the GoU was required to do was sovereign-guaranteeing this lending.
The NPA report recommends that the Board imposes new KPIs aimed at ensuring that management prioritizes enforcement of timely loan repayments by UDB’s borrowers so that the Bank’s revolving fund is enlarged and made to become more resilient and sustainable.
In the 8 years’ period (2015-2023), UDB’s net profits grew from Shs1.9bn to Shs49.8bn. In the same period, total revenue quadrupled to Shs157.1bn and 85% of this derived from interest payment/income. Consequently, UDB can now fully or 100% fund its internal operations and this is why its now possible to wholly concentrate the GoU capitalization contribution and the other monies sourced from external partners to be concentrated on private sector lending. The realized profits have also been reinvested to enlarge the Bank’s revolving fund and thereby deepening access to long-term financing by borrowers from Uganda’s private sector.
The NPA report authors also established that there is growing public awareness about UDB’s existence, its mandate and the impact it has been able to have on Uganda’s socio-economic transformation agenda. That currently, UDB is the 2nd most recognized development financing mechanism (DFM) in Uganda, only 2nd to Microfinance Support Centre (MSC). 89% of the Ugandans whose views were sampled are able to precisely recognize UDB, compared to 93% who recognize MSC.
The report authors recommend that UDB rides on this widespread recognition and goes for informed engagement with the Ugandan members of the public in order to strengthen demand-driven private sector participation in the execution of the Bank’s mandate. That such engagements can have the result of deepening the public’s understanding of the products UDB offers.
The NPA report suggests that once the recommendations therein are taken seriously and implemented, there are abundant opportunities to strengthen UDB’s financial autonomy and capitalization; all of which are required to strengthen the Bank’s foundation while enabling it to remain Uganda’s undisputed leading source of sustainable and high-impact development finance. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
