Gov’t secures Shs 537bn loan from Arab Bank to boost private sector growth

The Government of Uganda has secured a $150 million (Shs 537.4 billion) loan from the Arab Bank for Economic Development in Africa (BADEA) to accelerate private sector growth and empower small and medium enterprises (SMEs).

The financing agreement was signed in Kigali, Rwanda, on the sidelines of the 41st Board of Governors Meeting of the Trade and Development Bank Group (TDB Group). Uganda’s Finance minister, Matia Kasaija, and BADEA president, Abdullah Almusabeeh, officiated the signing.

Of the total package, $100 million (Shs 358.3 billion) loan, sourced through BADEA’s private sector window, will be channelled via the Uganda Development Bank (UDB) to support priority sectors such as agro-processing, manufacturing, infrastructure, health and education.

The remaining $50 million (Shs 179.1 billion) loan, drawn from the public sector window, will focus on micro, small, and medium enterprises (MSMEs), particularly in agriculture, agro-industry, infrastructure, and social sectors.

This funding aligns with BADEA 2030, the bank’s strategic plan, which emphasizes infrastructure development, private sector growth, SME financing, agricultural value chains, and capacity building.

“Today’s agreement is a prime example of how governments can tap into BADEA’s suite of financial instruments to empower the private sector and fast-track development,” said Almusabeeh.

Since its inception, BADEA and its affiliated Arab institutions have committed approximately $2.5 billion (Shs 8.9 trillion) to Uganda’s development agenda, spanning energy, transport, agriculture, health, education, and water infrastructure.

Dr Patricia Adongo Ojangole, managing director of UDB, hailed the partnership as a catalyst for inclusive economic growth.

“By empowering MSMEs, we are not only enhancing livelihoods but also driving long-term, inclusive growth,” she said.

Minister Kasaija praised BADEA’s evolving support, noting the shift from public sector-heavy projects to a balanced approach that now embraces private sector empowerment.

“Over the last five decades, BADEA’s partnership has focused largely on infrastructure. Today, they are responding to our call for broader development financing that includes the private sector and trade,” he said.