- Regional Export Facility (REF) has an initial amount of UGX 1 Trillion as a package to support exporters from Uganda, to regenerate & grow export volumes to regional markets
- The facility is to be availed at a maximum interest rate of 12% per year for shillings and 6% per year in dollars with a tenure of between three (3) months to five (5) years.
Uganda Bankers Association has launched the regional export facility to the tune of 1 trillion shillings.
The aim is to de-risk export trade according to the chairperson, Sarah Arapta, who also happens to be the Chief Executive Officer of Citibank Uganda.
“This financial package is championed by member financial institutions, under the umbrella of UBA, through which the financial sector will support Uganda Exporters to regenerate and grow export volumes to regional markets of South Sudan, DRC, Kenya Tanzania, Burundi.
In July this year, the association facilitated a dialogue with manufacturers and traders during the annual banker’s conference to bridge financing gaps in the manufacturing/trade, tourism /hospitality, and agri-business sectors to catalyze economic recovery and growth post-2021.
Mr. Wilbrod Owor, the Executive Director Uganda Bankers’ Association said the facility was a specialized financing regime supported by a payment and settlement mechanism that will be availed at a maximum interest rate of 12% p.a for shillings and 6% p.a in dollars with a tenure of between three (3) months to five (5) years depending on purpose and structure of the facility.
Uganda has huge potential in manufacturing but also immense opportunity via regional trade and its catalytic role when viewed from the standpoint of its multiplier effects across the rich value chains that come from manufacturing and agriculture.
However, the missing links and key financing needs identified by the manufacturing sector for the attention of the financial sector include; the provision of appropriate financing mechanisms to support manufacturing and export capacity including the long-term medium, and short-term working capital required by manufacturers, establishing a sliding scale export finance mechanism by sourcing for provision of better-priced financing supported by risk guarantees to manage export risk, medium to long term finance with favorable pricing and flexibility in the structuring of those export financing facilities.
Speaking at the launch, the Chief Executive Officer, of Private Sector Foundation Uganda (PSFU), Mr. Stephen Asiimwe said, “This is very good news for the private sector; this facility is a timely intervention which will support, finance and promote regional trade for our business community and private sector. PSFU has broadened its scope in service delivery to intentionally promote and access markets for Ugandan goods and services. Therefore, with such a facility in place, Ugandan traders will be able to do more business across the region and beyond since the financing gap will now be closed.”