Uganda Development Bank (UDB), the country’s national Development Finance Institution and the recipient of the prestigious title’ Best Bank in East Africa 2024 due to its contribution to the growth and development of Africa’s banking sector, has released its 2023 Development Impact Report. The Bank conducts ex-post development impact assessments annually, culminating in a Development Impact Report.
According to UDB 2023 Report launched on Friday, at the Bank’s Head Office located on Rwenzori Towers in Kampala, under the theme, “Transforming Lives: The Role of UDB in Driving Socio-economic Transformation in Uganda,” underscores the impressive and reassuring socioeconomic outcomes of the Bank’s interventions across various sectors through job creation, output value, forex, and tax generated by enterprises supported by the Bank.
It also emphasizes the Bank’s pivotal role in fostering the country’s sustainable socio-economic transformation and growth. It serves as a beacon of hope, reflecting UDB’s unwavering optimism about Uganda’s future and instilling confidence in its potential.
“The 2023 Development Impact Report underscores the substantial impact of our strategic investments and interventions. We are steadfast in our support for Uganda’s economic growth and job creation, with a strong emphasis on sustainability and regional trade. Our financial and nonfinancial interventions are designed to deliver high socio-economic value, including job creation, increased production output, and foreign exchange earnings while contributing to government revenues through tax,” said Ms. Patricia Ojangole, the Managing Director UDB during the launch.
In the intervening period, the Bank’s investment created and maintained 51,841 jobs, and a total output value of UGX5.8 trillion was realized. This output value contributed UGX236.1 billion in tax revenue to the government, which will be used for the country’s social development and forex earnings of UGX953 billion.
UDB’s Key findings show; on Employment that It’s worth noting the enterprises the Bank financed saw a significant increase in job creation and maintenance, with a total of 51,841 jobs compared to 51,439 in 2022. Of these, 41.21 per cent were permanent and 58.78 percent were temporary. The highest proportion of temporary employment, 41.5 percent or 12,633 jobs, was in primary agriculture.
“This may be attributed to the nature of the sector, where activities peak during the planting, weeding, and harvesting seasons and are low during other seasons. Therefore, farmers follow the same patterns in employing workers,” Dr Francis Mwesigye, the Director of Economic Research and Knowledge Management, explained, providing a clear understanding of the impact of the seasonal nature on employment.
According to UDB, the youth have been a driving force in the job market, filling 64 percent of the Contributed 0.25 percent. The Bank noted that 33 percent of the youth, 39 percent of women, and 0.2 percent of PWDs are among the shareholders, as per the report.
“Women accounted for 13,727 jobs and held 39 percent of shareholding, up from 27 percent the previous year. This increase can be attributed to the Bank’s deliberate effort towards women’s inclusion through tailored products. Women constituted 43 percent of the senior management teams in these enterprises, up from 37 percent in 2022”, reads the UDB report in part.
As for PWD (Persons living with Disabilities) the bank took up 130 jobs and UDB-supported enterprises posted over UGX 869.05 billion in profitability in 2023, indicating continued growth in financial strength and viability.
“Sectoral profit margins varied, with sectors like health and primary agriculture demonstrating higher profit margins than tourism and hospitality. Tax Contribution Supported enterprises contributed approximately UGX236.08 billion in direct domestic taxes in 2023, which is estimated to be 1.43 percent of the total national domestic taxes in 2023, a significant figure that underscores the scale of our tax revenue”, pointed the UDB report.
Accordingly, UDB analysis of the sectoral contribution to taxes showed that the manufacturing sector contributed the most, at 47 percent of the total tax revenue contribution, followed by Agro-processing at 27.9 percent and primary agriculture at 15.0 percent. Even the least contributing sectors, tourism at 3.2 percent, Education at 0.1 percent, and other sectors combined at 0.5 percent, play a part in our collective tax revenue. Promoting the Import Substitution Agenda Conversely, the earnings from locally produced destined products (exports) saw a commendable 47 percent increase from UGX649 billion to UGX953 billion.
UDB says; this significant growth was primarily due to the increased production, particularly in the manufacturing and agro-processing sectors, a testament to the strength of our local industries.
“They mainly exported to neighboring countries within the East African Community (EAC), COMESA, the EU, and the UAE, emphasizing the importance of regional trade partnerships for market access. Notably, a promising 66% of all raw materials utilized in enterprises funded by the Bank were locally produced during the year, a clear sign of the growing strength and potential of our local industries”, adds the. Report.
“The 2023 Development Impact Report showcases the substantial impact of our strategic investments and interventions. We proudly support Uganda’s economic growth and job creation, while unwaveringly prioritizing sustainability and regional trade. Our financial and non-financial interventions aim to deliver high socio-economic value, including job creation, increased production output, and foreign exchange earnings,” Ms Ojangole reaffirmed.
On Social Inclusion on behalf of the Ugandan government, the Bank states that it has made a firm commitment to a comprehensive, far-reaching, and people-centered set of universal and transformative social inclusion targets.
These targets, according to UDB, prioritize the participation of the youth, women, and People With Disabilities (PWDs).
“To the Bank, social inclusion symbolizes diversity and social cohesion, unlocking the full potential of individuals and societal segments where everyone can fully participate, contribute, and thrive. In line with the Bank’s effort to democratize economic participation, the Development Impact report notes positively that over 33 percent of companies funded by UDB are owned by women. In 2023, 31 percent of the Boards of the institutions funded by the Bank were women, 43 percent were Women in senior management, and 27 percent of the jobs created and maintained were filled by women”, points out the report.
Youth assessment revealed that 64 percent of the jobs created and maintained were filled by Youth, according to a UDB report confirming their role and participation in the national agenda. Additionally, 33 percent of the shareholders in the surveyed businesses are Youth, with 19 percent representing Youth on the Board and 29 percent representing Youth on the senior management team. People With Disabilities 0.25 percent of the jobs created and maintained were filled by People With Disabilities (PWDs). 0.2 percent of the Shareholders are PWDs, 0.3 percent Representation of PWDs on the Board, and 0.4 percent Representation of PWDs in senior management.
On Environmental Sustainability, UDB states that Environmental sustainability is not just a goal, but a deeply ingrained priority for the UDB, which employs a range of strategies to ensure that enterprises the Bank works with share this commitment, including conducting thorough environmental impact assessments, monitoring compliance with regulations, and supporting initiatives for mitigating and adapting to prevent adverse environmental impact.
“This steadfast commitment is a testament to our values and the importance we place on environmental sustainability. Environmental Compliance 72 percent of assessed enterprises were certified by NEMA in 2023, up from 56.5 percent in 2022”, points out UDB report.
Emissions Assessment Enterprises that have embraced renewable energy have made significant strides in reducing emissions, according to the UDB report.
“Their projects emit about 32.8 Mt of C02, significantly lower than those using nonrenewable energy, which produces about 69.18 Carbon Footprint (tCO2e) per project. This progress is a cause for optimism and a testament to the potential for positive change in our environmental impact”.
“Transition to Cleaner Energy It’s not just important, but crucial to emphasize the need for a transition to cleaner energy sources, especially in the infrastructure sector, where reliance on fossil fuels persists,” further states the report.
On Sustainable Waste Management, UDB report states that; Enterprises rightly prioritize waste reduction, recovery, reuse, and as critical strategies to promote environmental sustainability. The Bank says; most projects have adequate waste management capacity, utilizing strategies like composting, recycling, and energy generation. Conclusion The 2023 Development Impact Report demonstrates progress towards realizing the Bank’s mandate and purpose to improve the quality of life of Ugandans.
“I would like to thank our customers who continue to rely on our leading financial and non-solutions to create the much-needed difference for Ugandans,” Ms Ojangole concluded.
“We are committed to measuring our impact, learning from our and our partners’ successes and challenges, and transparently sharing insights to promote dialogue and inform action. We believe learning is integral to adapting and improving our strategies to strengthen our collective efforts to advance transformation, make opportunities sustainable, and improve the well-being of the people we serve,” she further pointed out.
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