Makerere University Chancellor Prof Ezra Suruma (pictured) has advised the different groups pushing for the re-establishment of a cooperative bank to harmonise their efforts.
This comes after Dr Suruma, who, according to President Yoweri Museveni, was opposed to the privatization of state banks in the 1990s’, learnt that a group of university student leaders had teamed up to demand for the creation of a cooperative bank.
This group; the Agriculture and Cooperative Bank Promoters (ACBP), petitioned the Speaker of Parliament for dialogue as they step up efforts to ensure the re-establishment of the Cooperative Bank.
It has been working independently of the Uganda Cooperative Alliance whose idea is to either to restore or replace the Cooperative Bank that the Bank of Uganda controversially closed in 1999.
The Agriculture and Cooperative Bank Promoters group led by one Lt Moses Mugisha Babyomera, also a procurement officer at Operation Wealth Creation, and student leaders of different universities, says this is part of the consultative processes to get different ideas from all stakeholders before tabling the idea to the President for consideration.
Mugisha says that they are of the view that to ease the process and achieve the goal more easily, the government can convert one of the state-owned banks or microfinance institutions like Post Bank. He says that there needs to be a bank that would support the Parish Development Model because the currently available financial institutions cannot perform the function in their current structures.
Mugisha says that when the idea first came up in September last year, he wrote to the National Coordinator of Operation Wealth Creation, Gen Salim Saleh (Caleb Akandwanaho) about the possibility of pooling all the funds meant for different wealth creation programs.
He says this is purely an idea by the Guild Council and himself which they have decided to bring to the attention of different authorities including Gen Saleh. According to him, the resources, including Operation Wealth Creation, are too scattered to cause an impact across the various groups while each is managed under different guidelines.
Mugisha claims that the re-establishment of the Bank is being fought by some financial institutions that want to keep benefiting from offering highly-priced loans to small businesses.
The Cooperative Alliance is also pressing the government to expedite the process that is being led by the Ministry of Trade, Industry and Cooperatives. The Ministry recently asked the Attorney General to explain the sale of the Cooperative Bank assets and its controversial liquidation.
But the Attorney General in turn asked the Bank of Uganda to explain its actions of 20 years ago. In its explanation, the Central Bank insists that the Cooperative Bank, formed in 1963, under the Cooperative Societies Act was transformed into a corporate entity and registered under the Companies Act in 1997, before being liquidated in 1999.
However, the Uganda Cooperative Alliance rejects this explanation, saying the process to register a corporate entity in 1997 was never completed and so the 1963 bank has never been liquidated and that the assets were sold irregularly by BOU.
State Minister for Trade, Frederick Gume said he welcomes the intervention of the students, calling for a faster process to have the bank running. A similar view was voiced by the UCA General Secretary, Ivan Asiimwe saying that pressure on the government is necessary. He says, however, that the Agriculture and Cooperative Bank promoters need guidance.He says that this is just an addition to the process that the cooperative movement started in 1999.
On the fear of a clashing of views from the different stakeholders with the student leaders’ group calling for an agriculture and cooperative bank, Asiimwe says the views are not very different because, after all, the majority of the cooperators are farmers, and mainly small-holder farmers.
According to him, the available government efforts that also include the Agriculture Credit Facility and programs through the Uganda Development Bank are not adequately answering the needs of the majority of farmers. According to him, these funds are not being utilized by the smallholder farmers that dominate the cooperative movement and whom the cooperative bank aims to serve.
As the effort picked up momentum, Dr Ezra Suruma, Makerere University Chancellor, called on all the groups to work together because the ideas from the different corners are similar.
Makerere University School of Business and Management Sciences through the Technical Committee on the PDM Lab has also launched a process to assess the possibility of the establishment of such a bank.
This would help implement the financial decisions on the Parish Development Model.
The head of the Technical Committee – PDM Lab, Prof Eria Hisali has now told Lt Mugisha’s group to work with the PDM Lab committee to harmonise the efforts. “It became apparent that our interests are quite similar and that it might be useful to maximize the synergies between our ongoing efforts,” he says in his letter.
