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January 21, 2019

Borrow a leaf from Kenya on interest rates, EAC states told

Busia governor Sospeter Ojaamong with chief of staff Sebastian Okiring in Kampala yesterday /GILBERT OCHIENG
Busia governor Sospeter Ojaamong with chief of staff Sebastian Okiring in Kampala yesterday /GILBERT OCHIENG

The Ugandan business community has appealled to EAC member states to cap interest rates at a lower point to be in tandem with Kenya’s to spur trade.

Speaking during the Africa Now Business Leadership meeting in Kampala yesterday, the trade fraternity said Kenya’s move to cap interest rates was a positive development.

“In Kenya, interest rates have been capped in the banking sector. This is a very innovative idea that will enhance business in the region if other member states adopt it,” Maria Dido said during a Q&A session with Kenyan Deputy President William Ruto.

Ruto said although there is pressure from bankers and development partners for Kenya to allow demand and supply to dictate the market on interest rates, banks have registered good half-year profits.

Governors from counties bordering Uganda, including Sospeter Ojaamong (Busia), Josphat Nanok (Turkana) and John Lonyangapuo (West Pokot) joined the business fraternity in Uganda to benchmark.

Former East African Legislative Assembly speaker Dan Kidega said there is need to expedite the formation of a political federation to save the EAC, which continues to experience “chronic” funding with 50 per cent of its annual budget coming from donors.

Aligning vision

Ruto said he believes the dream of a political federation among EAC member states will come true, adding he supports Ugandan President Yoweri Museveni to realise the vision.

“EAC has made a huge leap since 1999, with many achievements realised in the last 10 years. In 2006, business between Kenya and Uganda was Sh48 billion. Today it has reached Sh104 billion,” he said.

Ruto said in the last four months, Uganda has overtaken Kenya with huge exports to Kenya.

Some people from the business community wondered about the disparities between EAC member states concerning timelines in the realisation of their vision.

Kenya hopes to achieve its vision in 2030, Uganda in 2040 and Rwanda in 2020. There is need to align these visions.

Ruto said despite the disparities, the five items are the same although configured differently.

“We also need to consolidate the regional blocs on the continent to increase intra-Africa trade, which currently stands at 18 per cent,”

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