Uganda’s financial sector is defective- Suruma

Kampala, Uganda | THE INDEPENDENT | Former finance minister Prof Ezra Suruma has said that Uganda’s financial sector is defective and should be reformed to serve all Ugandans.

Suruma said that three decades after liberalization, the banking sector has not reached the ordinary grassroots Ugandan even though the World Bank and International Monetary Fund anticipated that banks would spread to rural areas.

Prof Suruma said that when he became finance minister in 2005, banks were still concentrated in Kampala and that this prompted him to advise the government to start saving and credit cooperatives as a key mitigation to lack of financial services for the rural people.

But Suruma said cooperatives were also viciously fought. “For instance regulations which had come along with that were not passed. Many of these cooperatives failed because they were not regulated. That was so unfortunate,” he said during a debate on side effects of unbridled capitalism held at Makerere University on Saturday.

Prof Suruma further argued that time is due for Uganda to forge a new economic model that works for Ugandans. The end of cold war in 1989, he said, was an immense opportunity for developing countries to chart their path since they were no longer walking in the shadows of America or Soviet Union.

Makerere University Business School (MUBS) economist, Ramathan Ggoobi argued that Uganda’s banking sector is an unregulated cartel that roams freely. Goobi says that what is needed is an organizational model to organize the current economy.

Goobi argued Uganda does not need more capitalists of the caliber of panga wielding men evicting ordinary people from their land or capitalists who spend more time in State House seeking political rent instead of spending time looking for market access.

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