Banking. A customer in a banking hall. if you are taking a loan in
foreign exchange, Afriexim will be offering alternative services like
existing banks. PHOTO BY ERONIE KAMUKAMA
The
private sector has welcomed Uganda’s move to host the regional
headquarters of the African Export-Import Bank (Afrexim) but said its 10
per cent interest offer on long-term credit is still expensive.
The $30 million (Shs111.9b) Afrexim Bank regional headquarters’ establishment in Kampala is an African financial institution formed by 50 states and private investors. The bank is expected to promote and finance trade within the African continent and trade between Africa and other continents.
In an interview yesterday, Mr Patrick Bitature, chairman Private Sector Foundation Uganda and a renowned businessman, said: “Afrexim having foot prints in Kampala is good news that the continental bank will have a satellite regional home in Uganda.”
He said this brings decision makers nearer to the businesses, giving the private sector here easier access to the bank.
“Uganda needs more pockets of money parked here. Nearly 80 per cent of the long-term funds are in South Africa, Ivory Coast or Kenya. The good news should be spread around more equally,” Mr Bitature said.
High rate
Responding to the 10 per cent interest rate the continental bank will be offering for long-term loans, Mr Bitature said this is still relatively high in dollar terms.
“The rest of the world has been trading at four to five per cent since 2008. Interest rates are poised to increase now with USA leading the way. So we should expect a rise in the coming days,” he said.
Dr Fred Muhumuza, a Makerere University lecturer and economist, says Afrexim is an international bank which follows member countries’ applications.
“If Ugandan firms don’t compete or qualify, they may fail to comply much as the regional headquarters will be in Kampala,” Mr Muhumuza shared.
Kampala City Traders’ Association (Kacita)’s chairman, Mr Everest Kayondo, said: “Afrexim offering 10 per cent interest rate is being offered by some local commercial banks in Uganda. So they will be doing nothing special but they shall only join the competition with the existing banks.”
He said if you are taking a loan in foreign exchange, Afrexim will be offering alternative services like the existing banks.
“When you compare this rate with what the African Development Bank offers which staggers at about 2 and 3 per cent, it makes Afrexim’s rate more expensive and not appealing,” Mr Kayondo said.
CBR
Central Bank Rate. The central bank of Uganda raised its key Central Bank Rate by 100bps (basis points) to 10 percent on October 3, saying inflation is on an upward trajectory.
Interest rate. Interest Rates in Uganda averaged at 13.27 per cent from 2011 until 2018, reaching an all-time high of 23 per cent in November of 2011 and a record low of 9 per cent in February of 2018.
The $30 million (Shs111.9b) Afrexim Bank regional headquarters’ establishment in Kampala is an African financial institution formed by 50 states and private investors. The bank is expected to promote and finance trade within the African continent and trade between Africa and other continents.
In an interview yesterday, Mr Patrick Bitature, chairman Private Sector Foundation Uganda and a renowned businessman, said: “Afrexim having foot prints in Kampala is good news that the continental bank will have a satellite regional home in Uganda.”
He said this brings decision makers nearer to the businesses, giving the private sector here easier access to the bank.
“Uganda needs more pockets of money parked here. Nearly 80 per cent of the long-term funds are in South Africa, Ivory Coast or Kenya. The good news should be spread around more equally,” Mr Bitature said.
High rate
Responding to the 10 per cent interest rate the continental bank will be offering for long-term loans, Mr Bitature said this is still relatively high in dollar terms.
“The rest of the world has been trading at four to five per cent since 2008. Interest rates are poised to increase now with USA leading the way. So we should expect a rise in the coming days,” he said.
Dr Fred Muhumuza, a Makerere University lecturer and economist, says Afrexim is an international bank which follows member countries’ applications.
“If Ugandan firms don’t compete or qualify, they may fail to comply much as the regional headquarters will be in Kampala,” Mr Muhumuza shared.
Kampala City Traders’ Association (Kacita)’s chairman, Mr Everest Kayondo, said: “Afrexim offering 10 per cent interest rate is being offered by some local commercial banks in Uganda. So they will be doing nothing special but they shall only join the competition with the existing banks.”
He said if you are taking a loan in foreign exchange, Afrexim will be offering alternative services like the existing banks.
“When you compare this rate with what the African Development Bank offers which staggers at about 2 and 3 per cent, it makes Afrexim’s rate more expensive and not appealing,” Mr Kayondo said.
CBR
Central Bank Rate. The central bank of Uganda raised its key Central Bank Rate by 100bps (basis points) to 10 percent on October 3, saying inflation is on an upward trajectory.
Interest rate. Interest Rates in Uganda averaged at 13.27 per cent from 2011 until 2018, reaching an all-time high of 23 per cent in November of 2011 and a record low of 9 per cent in February of 2018.
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