I've Been Vindicated on UCB Sale - Dr Suruma

1870 Views Kampala, Uganda

In short
At the time of sale of UCB, Dr. Ezra Suruma was the General Manager and he vehemently opposed the sale of the bank - first to Westmont in 1997, fronted by President Yoweri Musevenis brother Salim Saleh, and later to South Africas Standard Bank in 2001. According to Dr. Suruma, who later served as Finance Minister, the technocrats used the high interest rates excuse to push for the sale of UCB, then the biggest indigenous bank in East Africa, ahead of the likes of Kenya Commercial Bank.

Economist Dr. Ezra Suruma says the high interest rates in Uganda are a testimony that past claims by technocrats that the dominance of Uganda Commercial Bank (UCB) was to blame were unfounded.
 
Delivering a keynote address at a high level dialogue on the 2017/18 national budget in Kampala, Dr. Suruma said he feels vindicated after technocrats went after him, claiming UCB, which in the 1990s controlled over 50 percent of savings was the cause of the then high interest rates.
 
At the time of sale of UCB, Dr. Suruma was the General Manager and he vehemently opposed the sale of the bank - first to Westmont in 1997, fronted by President Yoweri Museveni's brother Salim Saleh, and later to South Africa's Standard Bank in 2001.
 
UCB, which had branches in all corners of Uganda, particularly in rural locations, was sold for a song to Standard Bank Group, which changed its name to Stanbic. UCB was a subsidiary of Uganda Development Corporation.
 
According to Dr. Suruma, who later served as Finance Minister, the technocrats used the interest rates excuse to push for the sale of UCB, then the biggest indigenous bank in East Africa, ahead of the likes of Kenya Commercial Bank.
 
Dr. Suruma, also the Chancellor of Makerere University, said years later, interest rates have not only remained high but erratic and volatile, making cost of borrowing too high for most Ugandans.
 
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Dr. Suruma said the number of banks is not enough to reduce interest rates, suggesting that there is a need to explore other ways of helping the banks to bring down interest rates.
 
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Commercial banks claim that they incur a lot of costs that is why interest rates are high, although all 24 banks posted profits in 2016. Banks like Centenary, Stanbic and Standard Chartered posted after-tax profits of over 100 billion shillings.
 
State Minister for Economic Planning, David Bahati, said the government will not cap interest rates like in the case of Kenya. He said if at all the government will consider capping interest rates on long-term lending by Uganda Development Bank.
 
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Commercial banks are charging between 20 and 22 percent in interest rates, way high for most Ugandans.
 
And while UCB is no more, a bank in a neighbouring country it was ahead of, Kenya Commercial Bank (KCB), has now spread its financial tentacles to not only Uganda but other EAC countries, with its eyes set on continental conquest.

 

About the author

David Rupiny
In his own words, David Rupiny says, "I am literally a self-trained journalist with over 12 years of experience. Add the formative, student days then I can trace my journalism roots to 1988 when as a fresher in Ordinary Level I used to report for The Giraffe News at St Aloysius College Nyapea in northern Uganda.


In addition to URN for which I have worked for five years now, I have had stints at Radio Paidha, Radio Pacis, Nile FM and KFM. I have also contributed stories for The Crusader, The New Vision and The Monitor. I have also been a contributor for international news organisations like the BBC and Institute for War and Peace Reporting. I am also a local stringer for Radio Netherlands Worldwide.


I am also a media entrepreneur. I founded The West Niler newspaper and now runs Rainbow Media Corporation (Rainbow Radio 88.2 FM in Nebbi). My areas of interest are conflict and peacebuilding, business, climate change, health and children and young people, among others."