Tycoon Hamis Kiggundu has explained why the poor financial and banking policies are a time bomb to Uganda’s economic growth.
The Ugandan property mogul of HAM Enterprises has appealed to the Ugandan government to effect instant financial policy adjustments from the current pro foreign ones to promoting local business initiatives and growth.
In a strongly worded video message recorded live from his office over the weekend, the youthful businessman poured scorn on the country’s inefficient policy makers for creating an economic environment only favorable for foreign investors while making it almost impossible for local businesses to thrive alongside those owned by their foreign counterparts.
The visibly disappointed Kiggundu emphasised a lot on the irregularities in the Country’s banking sector where he faulted the government of failure to institute stringent terms and conditions before awarding operational licences to investors in the industry.
He for instance, Ham pointed out that most banks in the country are foreign owned and also employ majority of their top employees from their countries of origin which according to him is dangerous for local growth of skills in the sector.
He appeals to the government to order such banks to specifically employ local labour which he says would go a long way in simplifying business operations between financial institutions since the management at the top is part and parcel of the local problems.
The businessman also criticised the Government for allowing foreign bankers to operate in the country with very limited operational capital which in most cases lead Government into losses.
He speaks of a situation where a bank is licenced to launch its operations in the country with a gross capital of shs 50 bn. He says after half of it is deposited with the central bank, sh10bn spent on capitalisation and anotherc sh10 bn on advertisement, there is barely nothing left for it to lend out to clients.
He notes that it’s the reason why most financial institutions have their maximum loan requirements at as low as sh5 million which according to him pushes local business persons into subsistence and less profitable operations.
He also accuses those foreign owned financial institutions of impartiality where the services given to the local businesses are highly detestable as compared to their foreign counterparts.
According to Kiggundu, if a local entrepreneur applies for a loan of sh1bn, he will only receive a half of it and to make matters worse, it would take as much as one year to get the loan yet a foreign businessman would get the whole of it and in the shortest time possible.
He added that there are also disparities in the interest rates charged on the loans with foreign businesses charged as low as 16% while the indigenous ones pay as much as 23%.
Besides such hardships and segregation, Ham further contends that almost all the profits milked from the economy by these bank owners are repatriated to their countries of origin. This according to him has left the country at the risk of remaining impoverished forever unless Government wakes up immediately to amend it’s financial system which he describes as badly wanting.
The businessman who has been locked in a highly damaging legal war with Diamond Trust Bank [ DTB] faulted the weak legal system which according to him protects the thieves in the banks at the expense of the indigenous business persons.
For instance, he points out regulation 13 of the financial institutions Act which demands that a businessman seeking court remedy from the judiciary for their properties attached by the bank should have to first pay 30% of the debt in question which he says is unfair.
He further explains a situation where one gets a loan payable in give years and fails along the way after serving it for say 4 years.Then when the bank takes both the mortgage and the other part which the debtor will have paid over the course of four years would be theft and asking such a businessman who has already been robbed to zero would be ridiculous.
Ham, a lawyer by profession, says he has already petitioned court challenging that regulation of the Financial Institutions Act since it violates Article 28 of the constitution which provides for the right to fair hearing for all Ugandans.
He also pledged to write to Parliament with a view of ensuring that the badly required changes get looked into to streamline the structure of the Country’s financial structures before the economy goes to the dogs.
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