New Leadership, New Hope: A call to action for Bank of Uganda’s Governor and Deputy

By Bagarukayo Abdu

As the newly appointed Governor of the Bank of Uganda, Dr. Michael Atingi-Ego, and his Deputy, Professor Augustus Nuwagaba, take the reins, they face a myriad of challenges, including the pressing issue of high interest rates in commercial banks. It is imperative that they prioritize this matter, as it has far-reaching consequences for the economy and the welfare of Ugandans.

The current state of affairs, where the Central Bank offers money to commercial banks at a relatively low interest rate, only for them to lend it out at exorbitant rates, is nothing short of usury. This predatory practice leaves borrowers, particularly small businesses and low-income individuals, trapped in a cycle of debt and poverty.

The Governor and his Deputy must take decisive action to address this issue, ensuring that commercial banks operate in a fair and transparent manner.

To effectively tackle this challenge, the Bank of Uganda must adopt a multifaceted approach. Firstly, they should consider implementing stricter regulations on commercial banks, ensuring that they adhere to fair lending practices. This could involve setting caps on interest rates or introducing measures to increase transparency in lending practices ¹.

Furthermore, the Bank of Uganda should prioritize monetary policy decisions that promote economic growth and stability. This includes maintaining a stable inflation rate, currently set at 5% ². By keeping inflation in check, the Bank of Uganda can create a favorable business environment, encouraging investment and job creation.

In addition to monetary policy, the Governor and his Deputy must also work closely with the government to ensure that fiscal policies align with the Bank’s objectives. This includes promoting policies that support economic growth, such as investing in infrastructure, education, and healthcare.

As the newly appointed leaders of the Bank of Uganda, Dr. Atingi-Ego and Professor Nuwagaba have a unique opportunity to make a positive impact on the lives of Ugandans. By prioritizing the issue of high interest rates and adopting a comprehensive approach to monetary and fiscal policy, they can help create a more equitable and prosperous society for all.

The writer is an NRM cadre