President Museveni has urged development finance institutions (DFIs) to focus on long-term transformation rather than short-term profits, warning that commercial banks' high interest rates are stifling Africa's economic growth.
Speaking at the opening of the inaugural Uganda Development Finance Summit 2025 at Speke Resort Munyonyo on Monday, Museveni criticised private banks for charging interest rates despite Uganda's stable inflation.
"The problem of private capital is too much greed for money," the President said.
"If you lend me one Shs1 million, and I must pay you back Shs1.22M in a year, how will I manage to do serious business other than importing things like dead people's hair from China and selling it quickly?"
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He argued that such conditions force Ugandans into small-scale, fast-return trade rather than investing in productive sectors such as agriculture and manufacturing.
"Commercial banks are making Africa dependent on imports. That is why we need development finance that puts transformation before profit," he said.
Museveni pointed to the Uganda Development Bank (UDB) as a model institution capable of providing affordable, patient capital for national priorities.
"This one is a sure guarantee because it is ours," he said.
The President called for financial institutions to adopt a "visionary and sacrificial" approach, noting that true development requires savings, discipline, and long-term commitment. "We must prioritise vision, integrity, and patient capital to transform Africa," he said.
In her remarks, UDB managing director Patricia Ojangole noted that national development banks must anchor financial systems in resilience and inclusivity.
"The summit is not just a meeting of minds. It is a call to action..Our continent is rich yet challenged. Development banks must provide patient, affordable financing to catalyse investments and private sector growth," Ojangole said.
Ojangole highlighted that while private banks direct most loans to real estate and personal consumption, UDB channels over 80 per cent of its lending into agriculture, manufacturing, infrastructure, and other productive sectors.
She also stressed the need for DFIs to mobilise climate finance, support digital innovation, and align global capital with local development priorities.
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Geoffrey Kihuguru, UDB's board chair, emphasised that national development banks are more than lenders. "They are thought leaders and catalysts of socio-economic transformation," he said.
"Too often, women are excluded from finance because they lack collateral. We must rethink lending models to reflect potential, not just assets," he added.
Kihuguru also urged DFIs to help Africa develop a pipeline of viable, bankable projects to attract global capital.
"The world has resources, especially for green and social investments, but what is missing are viable projects," he said.
The two-day summit brings together policymakers, development financiers, and private sector leaders to discuss how to reshape Africa's development financing architecture.
Museveni's challenge to DFIs has set the tone for debates on balancing profitability with sustainable transformation.
