Local traders struggling due to high cost of doing business
Jun 05, 2014
Local traders have complained that the Government is not supporting them to tap into numerous investment opportunities in Uganda.
By Musoke Lwoga
Local traders have complained that the Government is not supporting them to tap into numerous investment opportunities in Uganda.
Martin Okumu, the secretary general of the Uganda National Chamber of Commerce and Industry (UNCCI), said businesses are struggling because of lack of financing.
He asked the Government to establish merchant banks to help local businessmen get credit at affordable interest rates to grow their businesses.
“There is no sufficient room for favourable long-term loans,” Okumu said.
“It is expensive to attain loans from commercial banks and repay them in time due to the high interest rates.”
Commercial banks in Uganda charge about 17% interest on loans, yet those in China and India have rates as low as 5%, he explained.
“Those who depend on local loans are outcompeted. Every month people lose assets they used as collateral,” Okumu noted.
He added that other factors hurting business include electricity, high fuel cost and taxes.
Another challenge is the poor roads, especially during the rainy season, which affects timely delivery of goods.
Okumu also pointed out that lack of business information to guide investment is another challenge. He suggested that the trade ministry creates an information hub through which vital information can be accessed.
Steven Kabagambe, the UNCCI director membership services, said foreign investors have get preferential treatment to local ones.
“Subsidies for foreign investors are high, but there is little for local investors. There is need for the Government to support local investors by providing interest free loans and subsidies to enable us do business effectively,” he said.
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