BOU: Uganda financial sector robust, to survive World Bank blacklist

The Bank of Uganda has assured the banking and financial industry that it will ensure its stability and the sustainability of the microeconomics of the country amidst the withdrawal of the World Bank from new loan deals. The World Bank decision communicated last week has already caused discomfort in government and civil society, with the former saying it would revise the national budget, while the latter advised frugality and transparency as a means to overcome the expected impact. Financial experts expressed worry that the move would reverse the gains the economy had made especially in taming inflation and stabilizing the foreign exchange. Dr. Michael Atingi-Ego, the Deputy Governor, says the Bank has proved its ability through its measures that have managed to keep inflation rates at manageable levels and to strengthen the Uganda shilling against the US dollar “save for last week’s events”. Speaking at the sixth Annual Bankers Conference called by the Uganda Bankers Association, UBA, Sarah Arapta, the Association Chairperson urged for more prudential measures by the banking industry and policymakers amidst the persistent challenges. She noted with concern the likely impact the latest action by the World Bank could have on an economy still struggling to recover from several shocks including Covid-19, the Russian war on Ukraine, and the recent high global inflation rates. She said that on their part as bankers, they must be more innovative by taking advantage of the digital revolution currently happening so as to protect the industry against such shocks. The banks are developing a cyber security control framework that all member institutions of UBA will adopt. This, according to Arapta arose from the multi-sector fraud summit that was held earlier this month.