The National Planning Authority (NPA) Executive Director, Dr Joseph Muvawala has expressed his gratitude towards government’s decision not to sell Uganda Development Bank (UDB) during the wave of Structural Adjustment Programmes.
It must be recalled that in 1992 in the wake of the then National Resistance Army government embracing the neo-liberal Structural Adjustments Programmes (SAPs) championed by the World Bank, International Monetary Fund, and World Trade Organization (the Washington Consensus) many government parastatals were sold out.
Under this wave, over 146 government parastatals were sold out to private companies and Uganda Development Bank was among those parastatals that were put on the auction list. However, Dr Muvawala who had just left African Development Bank advised President Yoweri Kaguta Museveni not to sell the only country’s Development Bank.
“Many years ago during Structural Adjustments, we were told to sell those things that were not working and UDB was among them. Can you imagine we were supposed to sell that UDB? How do you sell a Development Bank? I recall my first meeting with the President and in that meeting was the late Prof Mutebile whom I disagreed with on the economic principles of selling UDB,” Dr. Muvawala said while speaking during the investment conference in Entebbe on Thursday.
He revealed that in that same meeting, he explained to President Yoweri Museveni that due to the structural problems in Uganda’s economy, a Development Bank is much needed to act as an engine for small-scale startup businesses and even the large-scale ones that need a push.
“In that meeting, the late Mutebile told us that Uganda did not need a Development Bank because the market will sort it out. And when Prof Mutebile spoke in that meeting nobody else wished to speak, so I misbehaved and said “Your Excellency, with all these structural problems in this country you need a Development Bank” and I want to thank the president he listened and you have always heard him talking about this UDB,” he said.
Dr. Muvawala added that when he was asked to lead the Planning Authority, the task he started with was to revive the UDB.
“I’m very happy to see that UDB is working very well and I’m so proud of it and this is what we want you UDB to do, we would want you to listen to local small-scale investors.”
He added; “I want to thank UDB because you have started helping our small-scale investors. They have very good ideas and remember an idea is the most important element in business, your money comes later. I also encourage all local investors here don’t leave without sharing your ideas with UDB. Development Bank’s work is to take a bad idea and turn it into a good idea. A commercial bank’s work is to finance a good idea.”
Meanwhile, UDB began operating in 1972 and was the first development finance institution established by the government of Uganda with the main mandate to accelerate socio-economic development in Uganda through sustainable financial interventions.
Consistent with this mandate, the Bank supports projects within the private sector that demonstrate the potential to deliver high socio-economic value, in terms of job creation, improved production output, tax contribution and foreign exchange generation, among other outcomes.
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