By Fred Mwebya
All over the world countries grow and develop as a result of how strong and respected their systems and structures are. There is no doubt that fundamental growth and development depends on the prevailing economic, political and legal structures of a given nation or community.
Unfortunately in many African communities little attention is paid to the proper set up of systems, structures and their functionality in achieving the desired level of growth and development.
There are three major categories of people we have in communities today; the politicians/leaders, entrepreneurs/business people and the craftsman/workers.
The success of all these mentioned categories depends on how effective and real systems of a given community or nation are. In this missive I am going to focus on the factors that hinder the actual realization of economic development based on real impact of systems to the people in our community today.
Throughout history of mankind, communities have realized economic growth and development through focusing on creation of effective markets that encourage production and laying of clear strategies/economic plans that reward those involved in various activities of production.
This is the secret that nations like United States of America, China and Singapore paid attention to and ensured that for their people to be able to attain a certain level of development there must be systems and structures that allow them to access the necessary support to achieve their desired national development results.
One of the biggest sectors they all paid attention to is the banking industry and how effective the banking systems are.
At the global scale nations keep referring to the World Bank and IMF as real bodies that work with National Central Banks of different nations to realize growth and development and this is where the real story starts from.
The IMF and World Bank will financially empower nations to carry out specific economic activities to achieve the planned growth and development usually expressed in terms of GDP.
However these two bodies deal with the broader plans of governments but the attainment of the planned results entirely depends on how Central Banks regulate the banking systems of nations.
This is the point at which we now critically and objectively start focusing on the recent ongoing case between Ham Enterprises and DTB and why it matters.
The banking system plays fundamental roles in the growth and development of an economy, depending on the economic, political and the legal systems within which the banks operate.
As financial institutions, banks perform intermediation roles generally by mobilizing resources from the surplus units and channeling same to the deficit units for productive activities within an economy.
Banks through their credit policies act as lubricants and promote growth in different sectors of the economy paying attention to the priority sectors as outlined in the national development plan.
It is therefore not a secret that the financial system of a given nation has an impact on the real economic performance.
Based on the above realities, it therefore becomes a very cardinal issue to start deeply looking into the challenges affecting our banking industry in relation to how they avail financial resources to the various individuals involved in different sectors of the economy.
For the banking sector to play a key role in pushing the national development agenda as stated by government, there needs to be a levelled play ground where Banks do not cheat and drain their customers even though they drive at achieving profits.
The Central Bank (Bank of Uganda) has a mandate to ensure that this fair play ground is achieved but is this the case in Uganda today?
Due to the fact that about 95% of all banks operating in Uganda are foreign banks raises the question of “how concerned are these banks towards the achievement of the national development goals as set by our government?’ This is one of the fundamental questions Ham asks having been a victim of the alleged internal fraud perpetrated by his longest banking partner DTB.
Ham also goes ahead to open the discussion on regulation 13 of the 2012 Mortgage Act which requires a deposit of 30% for anyone that wants to seek justice from courts of law which contradicts access to fair hearing by many Ugandans that have been victims of poor internal bank operations.
Ham also takes keen interest in how the current Banks in Uganda respond to the core needs of Ugandans in terms of accessing credit services compared to other foreign businesses in Uganda.
This too is a concern that many Ugandan businessmen and women should take seriously.
At the same time this heavy local investor is troubled by the internal bank structures which are predominantly filled by foreigners who have little knowledge and interest in the core banking needs of a typical Ugandan business person.
Ham’s suggestion of allowing Ugandans to acquire shares in these banks as they establish base in Uganda will go a long way in improving on the service delivery of these institutions with well thought out products that answer the most pressing needs of Ugandans.
This is why I encourage all Ugandans without bias to pay close attention to the real issues that need to be reformed in our banking sector so as to attain a better and efficient banking system that works for the betterment of Ugandans but the other way round of setting conditions that fail Ugandans.
The Author is a Finance Student and a Digital Content Creator.