Uganda Presses Banks To Cut Credit Costs For Manufacturers

Kampala, August 6, 2026 - State Minister for Trade, Industry and Cooperatives David Bahati has urged commercial banks to lower lending rates for manufacturers, warning that expensive credit is constraining Uganda's industrial growth agenda.

Speaking at the third annual Uganda Manufacturers Association Financial Symposium in Kampala, Bahati said affordable financing is essential if manufacturers are to expand production, invest in long-term capacity and contribute more strongly to economic transformation. He framed the issue as a structural constraint on industrialisation rather than a short-term complaint by businesses.

Bahati said manufacturers typically generate internal rates of return of between 8 percent and 12 percent, while commercial lending rates often range from 18 percent to 24 percent. Borrowing at those levels, he said, makes it difficult for firms to break even, expand operations or undertake major capital investments.

The remarks highlight a persistent tension in Uganda's private-sector strategy: the government wants manufacturing to drive value addition and job creation, but high interest rates limit the ability of firms to finance machinery, working capital and expansion. For investors, the credit-cost gap remains a key factor shaping the pace of industrial development and the competitiveness of domestic production.