President Yoweri Museveni will meet Kampala city traders on Saturday this week over their recent strike.
By Vision Reporter
President Yoweri Museveni will meet Kampala city traders on Saturday this week over their strike that was sparked off by high bank interest rates.
The president’s decision was in response to a request by Kampala City Traders’ Association (KACITA) leaders who feared the wrath of their members if they went back ‘empty-handed.’
Businessmen, Godfrey Kirumira and Kayondo as well as Issa Sekitto told Museveni that if they went back as losers against the banks, they would face the fury of the business people.
The group requested the head-of-state to address the traders directly and explain to them why their demand of reducing the bank interest rates could not be looked at.
Museveni resolved to meet the traders during a six-hour meeting at State House Nakasero on Thursday attended by members of KACITA executive, trade and industry minister, Amelia Kyambadde and State minister for finance (General Duties), Fred Omach and also leaders of the Association of Uganda Bankers.
‘Open the shops’
Museveni asked KACITA members to open the shops and stop the practice of resorting to strikes.
He said that it was a bad practice which sends alarming messages to tourists and other investors. He therefore urged Ugandans to understand the root cause of the inflation that has risen to 30%.
“Accept our problems and find a way of coming out of them. These problems were created by the political class who sabotaged power generation, road and railway construction which have increased the cost of production leading to 30% inflation,” Museveni argued.
Museveni (in checkered shirt) takes a group photo with part of the group he met at State House Nakasero on Thursday.
He also criticized teachers who have undermined the Universal Primary (UPE) and Secondary Education (USE) programmes thereby forcing their children to study in expensive schools instead of being in government free-education schools where they are teaching, and as such they end up acquiring bank loans to educate their children.
“If the two programs were handled properly by the teachers, their children would be getting education free,” the president was clear.
“We must accept the consequences of our mistakes. The elite and political class has created problems for the ordinary people.”
Museveni likened KACITA leaders to a cattle-keeper who boycotts his cows thinking that he is punishing other people whereas he is playing with his wealth.
Time is required
He agreed with the Governor Bank of Uganda, Prof. Emmanuel Tumusiime Mutebile, who asked for one week to study the implications of compound and simple interest rates.
KACITA members had demanded that banks should not charge new rates on old loans, preferring that they apply to new mortgages.
The Governor explained that KACITA’s demand requires time to evaluate its effects. The Bankers’ Association defended themselves saying that the money loaned to their customers comes with compound rates from central bank, which they extend to their customers.
Besides, they stressed that commercial banks want their customers to pay back their loans because failure to do so leads to losses while banks want to make profits. They asked for dialogue between KACITA and their members and also explained that the changes in interest rates affect only those accounts with changing variables but not those with fixed interest rates.
Museveni advised banks to come out with fair formulas that can cushion the salaried workers from hardships. He suggested that banks should allow their customers long and affordable repayment periods and said that they should use indigenous languages on FM radio stations to educate their customers before acquiring loans.
The trade and industry minister, Amelia Kyambadde urged banks to introduce customer-friendly packages that are suitable to Uganda’s environment.
She pointed out that although banks operate on similar principles, different countries have unique situations which must be addressed accordingly.
On his part, State minister for finance, Fred Omach, said that some changes could be carried out without harming the economy but agreed that there was need for more time.
Museveni asks traders to open shops