16 June 2017

Uganda: Government Should Exercise Fiscal Discipline - Bankers

Photo: The Observer
Finance minister Matia Kasaija reading the budget.

Kampala — The Uganda Bankers Association (UBA) has asked government to exercise fiscal discipline as it generates funds through domestic borrowing.

Fiscal discipline is the capacity of a government to maintain smooth financial operation and long-term fiscal health.

Government has been borrowing from commercial banks to finance various priority sectors amidst a shortage of domestic revenue.

Much as this is business for commercial banks because lending to government is secure, it has limited credit accessed by the private sector.

"We are calling for fiscal discipline from government because we are saying while we make money from these activities, there is the impact it has on the private sector. So spending on the government side should be on priority areas and if they have to borrow, there should be a minimum and direct it to the right sectors," UBA executive director Wibrod Owor said.

He was speaking at a press conference in Kampala on Wednesday ahead of the first annual bankers conference scheduled for July 19.

The conference, under the theme, "The Future of Banking, is expected to attract players within banking, non-banking financial sector executives, fin-techs, multilateral agencies, leaders from government and private sector.

Bankers will use this platform to take stock of and gain insights from global and country specific issues, trends and drivers in the banking and financial sector, re-examine how well the banking sector is aligned with the economy's development aspirations.

Digital finance

Also high on the agenda is digital finance. Early this year, UBA commenced a project to roll out agency banking using, a shared platform by member banks in line with the financial inclusion strategy.

Regulations for agency banking are before the parliamentary council according to Mr Owor and banks are currently readying the necessary infrastructure and products that will deliver the new service on the market.

The conference is expected to deliberate on addressing the challenges that have constrained sectors such as manufacturing, housing and agriculture.

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