A section of Members of Parliament have criticized the government for turning a deaf ear to the plight of businesses that are
collapsing as a result of bank loans.
The MPs led by the Kampala Central MP Mohammed Nsereko point out that
businesses have been financially crippled by the COVID-19 lockdown and deserve
a major bailout in order to stay afloat.
Nsereko accused the government of looking on as financial institutions auction property
and assets belonging to businesses even when the president promised to shield
these enterprises from effects of the crippling lock down until they are allowed
to fully operate.
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Nsereko has also accused the president of preferential treatment for talking to
the banks on behalf of some individuals close to him while the rest of the
business community suffers under financial strain.
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Bugabula South MP Maurice Kibalya, blamed the
government for failing to prioritize spending at the expense of tax payers who
are unable to fend for their families. He cites the funds allocated towards the
purchase of radios for the home schooling program which money he says should be
availed as a bail out to the businesses that are struggling.
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Muhindo says the government is ignoring the fact that no economy
can flourish without the prosperity of its own citizens and urges the
government to respond to their call and come to the rescue of the affected
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Bank of Uganda earlier this year directed commercial banks to
restructure individual and corporate loans as the Covid-19 induced lock down
affected businesses and economies globally.
According to the Central Bank financial institutions accommodated
their client’s demands and adhered to Bank of Uganda instructions.
The stock of loans, which were under credit relief in all banking institutions
as at end of July was 4.8 Trillion Shillings, which is equivalent to 31.2 per
cent of total loans.
However financial analyst Fred Muhumuza recently said many businesses have
still not recovered and are still under lockdown or semi-lockdown and this
presents a very high likelihood of the maturing loans turning into bad or