NETA Uganda seeks dialogue with BoU over rising interest rates, fuel costs
NETA president Thadius Musoke and other executive members said increasing the Central Bank Rate (CBR) could push up commercial lending rates, making it more expensive for traders to borrow, service existing loans and sustain their businesses.
NETA president Thadius Musoke (left) said NETA wanted BoU to consult traders and other economic players to identify practical solutions to the pressures affecting businesses.
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The National Entrepreneurs and Traders Association (NETA) Uganda has called for urgent engagement with the Bank of Uganda (BoU) and other stakeholders to find alternative measures to address the rising cost of doing business, warning that higher interest rates could further strain households, micro, small and medium enterprises (MSMEs) and threaten jobs.
Speaking at a press conference, NETA president Thadius Musoke and other executive members said increasing the Central Bank Rate (CBR) could push up commercial lending rates, making it more expensive for traders to borrow, service existing loans and sustain their businesses.
“BoU should carefully consider the impact of its monetary policy decisions on the cost of doing business. Interest rates are already high, making it difficult for ordinary traders to generate profits. Increasing them further could worsen the situation,” Musoke said.
The association argued that the rising exchange rate, fuel prices and inflation require a broader response that considers the challenges facing different sectors of the economy, rather than relying heavily on monetary policy measures that could raise borrowing costs.
Musoke said NETA wanted BoU to consult traders and other economic players to identify practical solutions to the pressures affecting businesses.
According to Muhumuza Muwasi, the spokesperson of NETA, some traders spend long hours in their shops without making sales, while others are forced to extend credit to customers who are themselves facing financial difficulties.
Traders propose alternative measures
Samuel Kyambadde,NETA's Secretary General,said the depreciation of the shilling and rising business costs should be examined alongside other factors, including the performance of the tourism sector, investor confidence, fuel prices and government borrowing.
He also argued that reports of Ebola outbreaks had affected tourism after some visitors cancelled bookings and travel plans, reducing a potential source of foreign exchange. Kyambadde also cited concerns surrounding Uganda’s investment climate as possible factors influencing investor decisions.
Rev. Esau Tumusiime,one of the advisers of NETA, said policymakers should undertake broader consultations and research to establish the different factors contributing to exchange-rate pressures before adopting measures that could inadvertently affect businesses engaged in manufacturing, agriculture and value addition.
They urged the Government to invest in alternative transport systems, including electric buses, and improve public transport to reduce traffic congestion and the cost of moving people and goods.
NETA members said traffic congestion in urban centres, particularly Kampala, wastes valuable business hours and contributes to economic losses.
The association further called for reduced domestic borrowing by the Government, arguing that competition for credit can put pressure on interest rates and limit private-sector access to affordable financing.
NETA's advice has come at a time when BOU at a special meeting on October 14, 2026, raised the CBR) by 225 basis points to 12.0%from 9.75.
It said their increments follow the increase in the Cash Reserve Requirement (CRR) to 13.5% on 24 September 2026.
It explained that both measures aim to contain rising inflation risks and keep prices stable.