The Independent Uganda: You get the Truth we Pay the Price
Agro-processing, manufacturing and primary agriculture were big determinants for the Bank’s performance
| THE INDEPENDENT | Uganda Development Bank, the country’s National Development Finance Institution on July.07 released its 2021 Direct Impact Report highlighting the fundamental role that it continues to play toward Uganda’s sustainable socio-economic transformation and growth.
Francis Mwesigye, the Director Economic Research and Knowledge Management at Uganda Development Bank said, the report reflects UDB’s work and coverage through job creation, output value, forex, and tax generated by enterprises supported by the Bank.
Overall, jobs created and maintained grew by 72% in 2021 compared to 2020, and foreign exchange earnings grew by 131% in 2021 compared to 2020. The growth in forex was occasioned by increasing share of forex earnings from agro-processing and manufacturing sectors at 50% and 33% respectively.
Mwesigye said, the key sectors targeted by UDB as post COVID-19 recovery measures in 2020 included agriculture, manufacturing, export promotion and import substitution.
However, tax contribution to government registered a decline of 48% in 2021 from Shs160bn in 2020 to Shs84bn in 2021.
The Bank said, there was also a 23% decline in profits of firms interviewed in 2021 compared to 2020. Output value also registered a slight decline of 1% in 2021 compared to 2020.
All this is attributed to the effect of the pandemic on the general economic performance, and the measures to contain its spread such as deferral of tax payment, the report reads in part.
In monetary terms, during the reporting period, the Bank’s investment created and maintained a total of 41,338 jobs in 2021 compared to 24013 in 2020, and a total output value of Shs2.445trillion compared to Shs2, 480; this output value contributed Shs84billion in form of tax revenue to the government, and forex earnings of Shs405billion.
The share of jobs created and maintained per sector was highest in agro-processing at 41%, followed by primary agriculture at 30%. The manufacturing, infrastructure, and tourism sectors contributed 17%, 6%, and 3% respectively while other sectors that the Bank supports, including health and education accounted for 4%.
Of the total output value reported in 2021, the agro-processing sector contributed 42%, followed by the manufacturing sector at 33%, and primary agriculture at 17%. Other sectors contributed; infrastructure – 3%, health – 3%, and tourism – 2%.
Profits for supported firms
The Bank through its investments, continues to facilitate the growth of a vibrant and sustainable private sector. The enterprises funded by UDB generated profitability amounting to Shs314bn in 2021 compared to Shs319bn a year before. Through 2021, the highest profits being posted by enterprises in the manufacturing sector which contributed 39%, followed by agro-processing at 32%, and 21% from primary agriculture sectors respectively. The tourism and health sectors contributed 4% and 2% respectively.
Mwesigye said, “These results reflect the Bank’s sustained contribution to the economy, augmenting the production of essential commodities amidst the shock of the COVID-19 pandemic which affected all the sectors, increased the cost of living, and disrupted global trade and markets. This Direct Impact Report 2021 demonstrates that UDB’s presence in the economy has had an overall positive impact,”
He added:
“I would like to thank our customers, with whom we partner to deliver these results. I do reiterate our commitment as UDB, to deliver our mandate by deliberately focusing our efforts on interventions that create sustainable impact, thereby improving the quality of life of Ugandans.”
The Direct Impact report tracks the Bank’s socio-economic footprint against its Strategic Plan and the country’s national development priorities.
In addition, the Bank looks at its High Impact Goals which are aligned with engendering wholistic sustainability, inclusion, community development, and environmental protection.
Going forward, Mwesigye said, with funding support from the government in form of recapitalisation, they are poised to continue supporting key sectors that are key in creating jobs and related opportunities for the economy.
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