Sunday, June 17, 2012

Uganda at 50: Have we graduated from dependence on foreign capital?

One of Uganda's biggest indigenous banks, Centenary Bank, opened one of the tallest structures in Uganda-the 11-storey Mapeera House in the very centre of Kampala's central business district.

International banks in Uganda own real estate and indeed, Barclays Bank and Standard Chartered own many of their own premises. So, what is the big deal with Mapeera house?

It was built with  US $40 million of the banks own funds with out external finance or even borrowing. Put another way, it was built with purely Ugandan money, teased out of the Ugandan economy.

Centenary Bank is a local bank with majority ownership by the Ugandan Catholic church and has been, for the most part, run by Ugandan management.  And that is debunking some myths: Ugandans can actually run a multi-million dollar  banking enterprise. With Teefe, Greenland and Uganda Cooperative Banks in the dust bin of history, we need to be reminded.

The Ugandan government announced recently it was going to borrow one trillion Uganda shillings from National Social Security Fund (NSSF) for infrastructure financing. Again, these are purely Ugandan monies, savings from salaried Ugandans to be exact.

At Watoto Church (formerly KPC) during one of the services, the pastor announced, what at the time seemed a hare-brained ambition, to raise a million US dollars from Ugandan church goers to help churches in Israel, Burundi and South Sudan. The irony was not lost on me especially with regard to the Israeli church.

This last sunday, the church announced that US $ 800,000 US dollars had been raised in shorter than a month-from Ugandan pockets. And the church is not done. They want to raise the balance of US $ 200,000 to make good on their million dollar milestone.

With the Ugandan government and businesses always looking out side our borders for financing, the trends above seem to suggest the domestic equity seems an option, it once wasn't.

Here is why  Ugandan local equity is such an issue.

According to  The Eastafrican, Tanzania currently holds a $ 1.2 billion loan for China's Exim Bank for the Mtwara- Dar es Salaam gas pipeline.

In 2011,Tanzania signed  off on a $ 320 million loan with Standard Bank of South Africa to pay international road contractors. And in this year's budget, the Tanzanian Finance Minister announced plans to borrow $ 822 million from international debt markets.

As Uganda marks 50 years of independence and with all the doom and gloom that analysts are dishing put on our jubilee, may be a shimmer of hope coming out of local capacity for financing million-dollar projects is some cause, however small, to toast to another fifty years.

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