BoU governor Emmanuel Tumusiime Mutebile
The value added by the agricultural sector had shrunk from 49% in 1991 to 24% in 2018,
Uganda’s economy could implode unless the government and the private sector carve out meaningful jobs for the country’s bustling youthful population.
Over 70% of Uganda’s 40 million population is under 30 years, with many currently unemployed.
Speaking at the annual Uganda Bankers Association (UBA) at Serena Hotel on Tuesday, Prof. Emmanuel Tumusiime Mutebile, the Governor Bank of Uganda warned that the population is set to hit 102 million in 2050 and 203 by 2100.
Urging government and the private sector players, especially commercial banks to avail low-interest credit facilities to farmers, the governor said: “focus attention on the potential role that finance could play in leveraging finance to defuse the demographic time bomb if Uganda doesn’t produce jobs for the youth.”
Mutebile added that 68% of the country’s populace, currently trapped in traditional and subsistence farming, need the help of all stakeholders, including commercial banks, to transform into modern and commercial farmers.
The governor noted that value added by the agricultural sector had shrunk from 49% in 1991 to 24% in 2018.
Mutebile, however, noted that despite that drop, the percentage of Ugandans employed in the sector had remained almost unchanged from 74% of the total population in 1991 to 71% in 2018.
He said that the formal sector is unlikely to provide employment for the youth, urging the government and the private sector to focus on export-oriented manufacturing and agro-processing to quench the rising demand for food, create jobs and reduce Uganda’s import bill.
Matia Kasaija who represented the Prime Minister Ruhakana Rugunda commended the media for marketing agriculture to the youth and noted that there is a need to strengthen agricultural institutions to spearhead the adoption of modern technology.
He said that the Uganda Development Bank had been allocated sh103.3b to provide low-cost financing to the sector, he noted that the government aims to recapitalize the bank with sh500b. Kasaija urged commercial banks to lend to the sector at affordable rates.
“China is open for agricultural products from Uganda. However, they need quality products and reliable supply,” he said.
Patrick Mweheire, the Stanbic bank CEO and UBA president said that public and private cooperation is needed to bring down the level of non-performing loans in the agricultural sector from 10% of all loans which is higher than the average of 3% for all loans.
Marianne Shoemaker, the Chief Executive Officer of Rabo Bank, who gave a keynote address on de-risking financing and investment in agriculture, urged the government to promote cooperatives and partnering with a bank to ensure easy access of finance to banks.