Written By | Staff Writer
The Uganda Bankers' Association has put a number on what the tenfold growth strategy costs the financial sector. The gap between that number and today's balance sheets is the whole story
Search
Agriculture
A number with a lot of zeros
The Uganda Bankers' Association said this week that the banking sector will need to mobilise at least Shs490 trillion in patient capital by 2040 if it is to finance the government's Tenfold GDP Growth Strategy. The sector currently holds roughly Shs28 trillion available for lending to the private sector.
Read that again slowly. The industry is proposing to multiply its lending stock roughly seventeen times over fourteen years. The Capital Markets Authority, through the stock exchanges, is expected to raise a further Shs440 trillion over the same window. Together that is more than Shs900 trillion of new financeable capital — for an economy the strategy wants to grow from about $50 billion to $500 billion by 2040.
The plan rests on four pillars the government calls ATMS: agro-industrial development, tourism, mineral-based industry including oil, gas and petrochemicals, and science, technology, ICT and innovation. Agriculture is not an afterthought in that list. It is the A.
Why this is an agriculture story
It would be easy to file this as a banking-conference item. It is not. Agriculture contributes roughly a quarter of Uganda's GDP and employs the majority of the working population, and the single most consistent complaint from every corner of the sector — cotton growers in Pallisa, barley farmers in the Rwenzori, tea outgrowers in Bushenyi, cooperative unions in West Nile — is the same: money is either unavailable or unaffordable.
The Bank of Uganda's own framing makes the scale of the problem plain. Private-sector credit stands at about 12.4 percent of GDP. To sustain the kind of expansion the strategy envisages, that ratio needs to move towards 50 percent. Uganda is not short of agricultural opportunity. It is short of the balance sheet capacity to finance it.
The evidence that demand exists is arriving from the commercial side. On 2 September, Pearl Bank announced that its loan book had crossed Shs1 trillion, up from Shs749 billion at the end of December 2025. Agriculture and agro-industrialisation account for roughly 35 percent of that book — the single largest contributor to its growth — with nearly half the portfolio in sectors aligned to the National Development Plan IV and the tenfold growth agenda.
Martin Mugisha, the bank's Executive Director for Operations, was blunt about what made it possible. “The biggest constraint to private-sector credit remains the cost of borrowing,” he said. “Partnerships allow us either to reduce the cost of funds or share some of the lending risk. That enables us to lend more affordably and sustainably, particularly to agriculture and SMEs where financing gaps remain significant.”
The partnerships he listed are instructive: the Government of Uganda, the Bank of Uganda's Agricultural Credit Facility, Aceli Africa, aBi Finance, the French development agency AFD and other development finance institutions. In other words, a commercial bank reached Shs1 trillion with agriculture as its largest engine only by importing concessional funding and risk-sharing from outside its own deposit base.
Concessional money does not scale to Shs490 trillion
That is the tension at the centre of this week's announcement, and it deserves more attention than it will get.
The agricultural lending that has actually worked in Uganda over the past two years has been subsidised, guaranteed or de-risked. The European Investment Bank's Shs428 billion credit line with Centenary Bank. The Uganda Development Bank, which had 65 percent of its loan book in agro-industrialisation and disbursed Shs502.2 billion to 112,392 borrowers before receiving a further Shs63 billion in capital in August. The Agricultural Credit Facility. Aceli Africa's incentive payments for small agricultural loans. The Netherlands' Shs8 billion top-up to a smallholder credit fund. Every one of these instruments works by making someone other than the bank carry part of the cost or the risk.
Concessional and blended finance of that kind is measured in hundreds of billions of shillings. Shs490 trillion is a different universe. The Uganda Bankers' Association's chairman, Michael Mugabi, who also runs Housing Finance Bank, has framed the answer as partnerships that bring in patient and affordable capital from international markets — “to consider how we can help make that ambition investable, inclusive and achievable”.
Wilbrod Owor, the association's chief executive, pointed to the Dutch development bank FMO, a sponsor of the 9th Annual Bankers' Conference scheduled for the Kampala Marriott on 18 September under the theme “The Role of Uganda's Financial Institutions in Facilitating Tenfold GDP Growth”. He also cited the World Bank's commitment of more than $6 billion, about Shs23 trillion, over the next decade, largely aimed at job creation.
Even taken together, these are a rounding error against the target. The honest reading is that the Shs490 trillion figure is a statement of what the strategy implies, not a funding plan that currently exists.
The reforms the bankers are actually asking for
More revealing than the headline number is the list of asks. Owor said the industry intends to engage Parliament and President Museveni on reforms needed to attract capital, naming two in particular: the contested 5 percent withholding tax on foreign debt, which the banks are challenging, and the creation of a specialised agriculture financing system.
That second item is the one farmers should watch. Uganda has an Agricultural Finance Policy on paper and a scattering of instruments in practice, but no dedicated architecture for the specific problem that makes agricultural lending hard: seasonal cash flow, weather-correlated default, land that cannot easily be pledged as collateral, and the tenor mismatch between three-month deposits and a seven-year coffee replanting cycle. Mugisha named the mismatch directly, saying the next phase would require more long-term capital “to finance longer-term investments without creating liquidity mismatches while keeping onward lending affordable”.
The regulatory side is moving in parallel. Allan Victor Walusimbi of the Bank of Uganda's Knowledge Management Centre described the central bank's role as maintaining macroeconomic stability and strengthening the legal framework for capital mobilisation, and pointed to the mandate to license large savings and credit cooperative organisations — the reform whose 30 September deadline currently has only a handful of the roughly ninety eligible SACCOs licensed. Finance Minister Henry Musasizi has separately challenged the bankers to work with government to bring interest rates down.
What it means at the farm gate
For a farmer in Kapchorwa or a cooperative in Koboko, none of this changes the price of money next season. But three things follow from it.
First, the direction of travel favours agro-processing over primary production. When banks talk about agro-industrialisation, they mean milling, ginning, roasting, packing and cold chains — assets that can be valued and repossessed. A maize farmer and a maize mill are not equally bankable, and the capital will find the mill. That is not necessarily bad for farmers, provided the mills buy locally and pay fairly, but it does mean the growth of agricultural credit will not be evenly felt.
Second, the terms on which international patient capital arrives will matter more than the amount. Long-tenor foreign capital lent into a shilling economy carries currency risk, and someone pays for hedging it. If that cost lands on the borrower, cheap capital stops being cheap by the time it reaches a farm.
Third, the specialised agriculture financing system now being floated is the most consequential item on the list, and it is the least defined. Whether it becomes a real instrument — a guarantee scheme with teeth, a genuine long-tenor refinancing window, a workable warehouse receipt regime — or another policy document will determine whether the Shs490 trillion conversation ever touches a farm gate.
The bankers have set a target and a date. The harder question, which the September conference will have to answer, is who carries the risk between here and 2040.
