Newly formed cities to get UGX48 Bn to cater for infrastructure

By Robert Segawa

Government is set to give 48 billion shillings to each of the new created cities in the country.

Seven municipalities will attain city status effective for July 1st 2020 include Masaka, Mbale, Mbarara, Arua, Gulu, Fort Portal and Jinja.

According to the chairperson of the Urban Authority Association Majid Batambuze, this will help in infrastructure development.

Batambuze who is also the Mayor of Jinja one of municipality elevated to city said the Ministry of finance has got the instruction to release the money.

He however adds that there are some disagreements with in the leadership of the newly created cities which will be a threat to the early release of the money for work to start in the approved cities that set to be operationalized on 1st July 2020.

UDB scores highly in Fitch rating

By Edwin Muhumuza

Uganda Development Bank (UDB) ranks ‘B+’ according to the latest credit rating by Fitch, a top international credit rating agency.

A credit rating is an evaluation of the credit risk of a prospective debtor (an individual, a business, company or a government), predicting their ability to pay back the debt, and an implicit forecast of the likelihood of the debtor defaulting.

The state owned development Bank and its issuer default ratings are driven by its support rating floor of ‘4’ and ‘B+’, respectively, which reflects Fitch’s view of a high propensity of government to support the bank when need arises especially due to its policy of financing Uganda’s priority areas, full-state ownership, significant funding guarantees and ordinary capital contributions from the state.

The managing Director, UDB, Patricia Ojangole notes that they intend to use the credit rating to increase funders’ confidence in the bank and thereby increase the banks chances of raising capital.

Currently the authorized capital contribution to the bank stands at shs.500 billion but so far government has put in 274 billion shillings, Ojangole said.

The head of Risk and Compliance Moses Ebitu, said the credit rating is good in that it raises the horizon of borrowing but also lowers the cost of borrowing which translates to the cost of facilities they offer and so they look to borrow from multinationals and then extend it to clients.

‘This rating speaks to a lot of things, a combination of different factors including how the bank is run and managed. Regardless of how good UDB may be, they can only be ranked to the extent of the support that government offers.’added Ebitu.

The bank has operations covering the entire country but without retail branches because they finance their own operations without government support for operating costs according to the officials.Government had committed to fund the bank up to 2022 but they hope that government fast tracks funding before then.

‘When the bank’s capital base significantly increases then they will be able to increase their nation-wide reach with time, and Ugandans will be able to access the money they want’, according to Ojangole.

Fitch Ratings of B+ on Uganda. cites the country’s high levels of infrastructure spending and its sound macroeconomic policy framework and a stable outlook on Uganda.
The Bank continues to focus on agriculture; the entire value chain, manufacturing, tourism, human capital development that is health and education plus infrastructure development

Infrastructure is more than roads say Badagawa

By Robert Segawa

Logistics companies under the umbrella body Uganda Freight Forwarders Association ( UFFA)  have asked government to widen their scope onl infrastructure.

Over the years government has put emphasis on roads, railway, and airport expansion but UFFA members say it has not been enough.

This call was made by Gideon Badagawa the executive director of private sector foundation during a press briefing on global convention logistics 2018 to take place 17th to 18th September in Kampala.

Badagawa said that infrastructure should also include storage hubs, skilled drivers, clearing agents, putting favorable transport and clearing policies in place to create more efficiency in the movement of goods across the East African region.

He also added that government should involve it’s self in savings and investing in order to stabilize the market and easy connectivity.