UDB won’t be sold

Oct 17, 2004

THE Government will not succumb to donors’ pressure to close down the Uganda Development Bank (UDB), the finance state minister, Mwesigwa Rukutana (right), has said.

By Mary Karugaba

THE Government will not succumb to donors’ pressure to close down the Uganda Development Bank (UDB), the finance state minister, Mwesigwa Rukutana (right), has said.

“With UDB, we are not going to close it down because of pressure from donors. We are not in agreement with the donors and there is no way we shall succumb to their demand to close down the bank,” Rukutana said in a telephone interview on Friday.

He said the Government had restructured the bank to provide long-term financing to local investors.

Opening the first networking symposium on innovations in agricultural advisory services in sub-Saharan Africa, general duties state minister Prof. Mondo Kagonyera, revealed the Government was under intense pressure from the donors to close UDB.

Kagonyera said the donors said the Government could not profitably run a business venture.

Rukutana said the bank may not be performing well, “but it will improve once we privatise part of the shares to the public who will run it on purely commercial basis.”

UDB’s chief executive officer, John Downer, said the bank was doing well.

He said the pressure to close the bank dates back in 1997 when it was insolvent. Downer said the bank had now taken off considerably well with its net assets standing at sh22b higher than the liabilities.

“As far as the management is concerned, the bank is in business and there is no reason why it should be closed,” he said.

Downer said, “We try to run the institution along commercial lines and government’s philosophy is to increase the balance sheet and the size which we have done. We expect more growth once some of the shares are privatised,” he said.

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