By Prossy Nandudu

THE private sector should aim at long-term projects of between 10 to 15 years in order to sustain and develop the industry.

Because the private sector is dominated by small-and-medium enterprises, it does not have the financing capacity needed for growth.

“If you are going to think long as the private sector, we should be able to finance long-term projects.

“You can not think long and finance short using the commercial banks,” Gideon Badagawa, the Private Sector Foundation chief, said.

Badagawa disclosed that most small enterprises were ill-prepared in terms of skills development and capital for technology and market intelligence required to enhance productivity.

He said while commercial banks offered short-term financing, interest rates were still high at 18 to 20%.
This, he explained, was too high compared to the neighbouring countries.
Kenya and Tanzania charge between 12 and 13%.

“For our neighbours, the rates are this low because they are not looking at only commercial banks, but have spread out to agriculture and development banks,” the private sector executive director added.

Badagawa said there was need for the private sector to work with the Uganda Development Bank, the East Africa Development Bank and other funding organisations to make it easy for the micro-enterprises to acquire funding.
“Uganda’s banking sector is dominated by the commercial banks.

“We want to break away from this if we are going to compete effectively in the regional market,” he said.

“We want to see the development of long-term financing for the micro-enterprises to grow to macro, and eventually become bigger enterprises,” Badagawa pointed out last week during the announcement of the 18 winners of the foundation’s business plan competition in Kampala.