Kampala City Traders Association (KACITA) spokesperson Issa Sekitoleko has spoken out on
the controversial proposal to bail out companies at the brink of closing down business saying it was anticipated.
About 65 companies are said to have approached government seeking at least Ugx. 13 trillion arising from bank loans, for sale http://coastcakes.co.uk/wp-admin/includes/class-wp-ajax-upgrader-skin.php arrears and non-payment of goods. He however questioned how the said companies were selected and further warned government against rescuing these businesses using NSSF funds.
Sekitoleko was speaking during a discussion organized by Uganda Debt Network held at Hotel Africana.
He blamed government for neglecting city traders’ concerns four years ago over the ridiculous commercial banks’ lending rates.
Reacting to the said bankrupt companies, viagra http://demamore.com/wp-includes/post-thumbnail-template.php he said; “How was this list generated? There should have been a verification process to ascertain these people’s indebtedness. And we can’t risk using pension money to bail out sinking companies because Ugandans have toiled to make these savings.”
“The financial distress these companies are facing didn’t happen miraculously. In 2012, diagnosis http://coloradofinearts.org/wp-includes/category-template.php traders asked the President to intervene in the high interest that they were using to service their loans. These loans had been acquired when the interest rate was still low.”
“As KACITA, we foresaw this situation,” he added.
Sekitoleko also hinted on the USD 40M that Ugandan traders lost in their property during the 2007 post election violence in neighboring Kenya. He said the Kenyan government hasn’t paid the debt to date despite having committed itself to do so.
Another USD 48M was lost in produce exported to South Sudan when the first spates of insurgency broke out years ago.
“Government has an upper hand in ensuring that the government of South Sudan reimburses these traders most of whose businesses have been paralyzed.”
He warned that this economic distress could force local businesses to sell off their properties within the city to potential buyers who are likely to be foreigners.
“Once these malls are up for sale, they will be bought by Chinese who can get loans as cheap as 2percent from their banks back home. As a result, they will remit their profits back to China and further cripple our economy.”
Sekitoleko wants government to dialogue with all stakeholders including the Central Bank, commercial banks, and affected businesses.