Uganda, BADEA sign $150m pact to boost funding to private sector

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The Arab Bank for Economic Development in Africa (BADEA) and the Government of Uganda have signed two facility agreements amounting to $150m (about shillings 537.5 billion) to support private sector growth.

The agreements were signed by H.E. Abdullah Almusabeeh, BADEA President, and Minister of Finance Matia Kasaija, on the sidelines of the 41st Board of Governors of the Trade and Development Bank Group (TDB Group) meeting in Kigali, Rwanda.

The Government will secure two-thirds of this loan $100m (about shillings 358.65 billion), under BADEA’s Private Sector window to support Uganda Development Bank Limited (UDB) in on-lending to vital sectors of the economy, including agro-processing, infrastructure, manufacturing, health, and education.

The remaining third $50m (about shillings 179.1 billion), will be secured under BADEA’s Public Sector window. It aims at financing micro, small and medium enterprises (MSMEs) operating in agriculture, agro-processing and industry, infrastructure, and health education sectors.

This signing aligns with BADEA’s 2030, Bank’s strategic framework revolving around infrastructure, private sector and trade finance, SMEs, agricultural value chains and capacity development.

“Today’s loan agreement with the Government of Uganda is an outstanding example of how governments can leverage BADEA's available financial instruments from both the public and private sectors as well as from trade finance windows to empower the private sector and advance countries’ social and economic development agenda,” H.E. Abdullah ALMUSABEEH, BADEA President, noted.

Minister Kasaija explained that Uganda’s partnership with BADEA has been thriving year after year, commending BADEA’s agility in responding to the government’s calls on development priorities.

“Over the last five decades, our partnership has been more focused on public sector interventions, especially in infrastructure. Today, BADEA has stood up to call for finance for development to expand its financial instruments to the private sector and trade.”  Kasaija added.

Dr. Patricia Ojangole, the managing director of Uganda Development Bank, lauded BADEA for the gesture, which affirms the government of Uganda’s commitment towards private sector growth.

“We are proud to partner with the Government of Uganda and BADEA in supporting the growth of the private sector through strategic investments. This collaboration embodies our commitment to fostering economic development across Uganda, particularly in the critical sectors of the economy, including agriculture, health, and infrastructure. By empowering micro, small, and medium enterprises, we are not only enhancing livelihoods but also driving sustainable growth in Uganda,” she said.

Since its inception, BADEA and its sister institutions from the Arab countries have committed around $2.5 billion to Uganda’s development priorities across sectors, including agriculture, transport, energy, education, health, and water supply and sanitation infrastructures.