As part of preparations for the commencement and rolling out of NDP4 (July 2025-July 2030), the Finance Ministry mid last year instructed NPA to carry out a study advising on the reforms that needed to be effected to enable Uganda Development Bank (UDB) play a more effective role in supporting the President’s socio-economic transformation agenda, and more so the realization of the 10-fold growth strategy-transitioning Uganda’s GDP size from $50bn to $500bn between now and 2040.
Led by the Executive Chairperson Prof Pamela Mbabazi and Executive Director Dr. Joseph Muvawala (PhD), the National Planning Authority (NPA) top leadership did as instructed and the voluminous 160 pages’ dossier, containing their findings and recommendations, was recently published.
The well-structured and appropriately-themed report makes many shocking findings, exposing great and weak areas. It also makes recommendations on the operational reforms and things that generally have to change for UDB to become more efficient in delivering its core mandate-namely the giving out of long-term loans to finance private sector actors desirous to go into long-term development projects.
The UDB funding has longer repayment period and the very lowest interest rates any borrower can get anywhere in the Ugandan finance market. Their loans are given out at just 12% interest, in comparison to commercial banks which lend at an average of 22% interest. In fact, the NPA report finds that UDB is actually far ahead of and doing much better than its peer development financing institutions in countries like Botswana, Rwanda and others. Quite understandably, many would-be peers frequently come to Uganda to benchmark on the UDB experience.
ON THE STAFFING STRUCTURE:
That notwithstanding, there are areas where UDB needs to carry out reforms in order to enable it cope and remain resilient in these rapidly-changing times. As of 2024, UDB had a total of 140 employees, all of whom were permanent and pensionable with exception of 9 (6%). On gender inclusiveness, all was well as 55% of them were males and 45% females. This is way above the 33% females’ requirement prescribed under the Bank’s own HR manual. This emancipation of females demonstrates inclusiveness and diversity in the Bank’s own HR practices.
Whereas having 94% of staffers serving on permanent and pensionable terms is good for organizational stability, continuity, long-term expertise retention, strategic consistency, deep institutional knowledge retention and sustained commitment to the Bank’s mission, the NPA report authors raise a red flag.
That much as this is a good way for the Bank to retain highly skilled staff capable of delivering a complicated mandate, there is need for operational agility. That there is need to enlarge opportunities for staff to be attracted and engaged under non-permanent terms and arrangements to cater for projects and interventions which many require short-term specialists and niche expertise, all of which can only be sourced more efficiently through flexible and project-based staff contracting terms.
That the Bank must consider taking on non-permanent employees to cater for the much-needed institutional responsiveness to ‘emerging development priorities, technological shifts and evolving market needs.’ That much as its okay for staff in strategic leadership positions and those deployed onto the long-term financing functions to be engaged on permanent & pensionable terms; it’s high time decision makers at UDB considered expanding on the Bank’s reliance on contract-based employees who can conveniently be relied upon to execute project-specific roles.
As captured in the report, the justification is that: “This balanced workforce model would allow UDB to retain its institutional strengths while introducing the adaptability and innovation needed to meet dynamic development challenges.”
CALLING OUT THE ARMCHAIR COMPONENT:
The NPA report also faults UDB over the fact that currently 54% or 75 of out of the total 140 employees it has are employed or deployed in highly-remunerated non-core/armchair roles which are merely enabling/supportive roles without ever requiring them to go to the field to directly interact with any of the Bank’s customers or clients. These are referred to as ‘non-customer-facing roles.’
Without contradicting the need to rely on permanent staff to ‘optimize resource allocation & strengthen capacity building,’ the NPA report illustrates why the prevailing staff mix at UDB is problematic.
The report shows that it’s an operational anomaly to have only 46% of the staff employed in roles that require direct and regular interaction with the Bank customers in the field. There is need to increase on the proportion of the personnel or employees whose designated roles cause them participate directly in the delivery and execution of UDB’s development financing mandate.
The NPA report relies on a recent report by the American Productivity & Quality Centre (APQC) to illustrate the long-established wisdom that “organizations with a higher proportion of operational staff tend to achieve stronger performance outcomes [than those prioritizing staff in non-core armchair roles].” That the frontline staff teams employed into direct client engagement roles, project origination, onsite monitoring, debt collection and responsive service delivery tend to be more critical to the maximisation of institutional impact.
“[Therefore], increasing their share ensures that more human capital is focused on executing projects, deepening client relationships and enhancing service quality while still leveraging the vital support provided by the enabling departments,” the NPA report reads in part clearly calling out decision-makers at UDB to wake up and become more deliberate about diminishing the proportion of armchair employees, while increasing operational ones, on the Bank’s staff payroll.
The NPA in its report makes it clear to their bosses at the Finance Ministry that UDB can’t achieve any sustainable operational efficiencies without “prioritizing recruitment and deployment of more customer-facing staff.”
The NPA impact assessment report adds that increasing the number of operational staff, mandated to frequently go to the field to directly engage and interact with the Bank’s customers, is the only way through which UDB can deliver on its core mandate of sustainably driving inclusive economic transformation through effective development finance provision, besides strengthening its outreach, responsiveness and project supervision capabilities.
BREAKING DOWN THE UDB STAFFING SITUATION:
Briefly, hereunder is how UDB’s 140 generously-remunerated employees are distributed. The NPA report authors found it problematic that only 65 (46%) of them are deployed/employed in operational roles that require them to daily directly engage or interact with the Bank’s customers. The breakdown is as follows: credit directorate has 22 staff, investment 3 & customer service 12.
The report faults UDB management and board for underprioritizing and overlooking key operational roles or units such as M&E, Advisory Services and Customer Care while over investing in armchair roles (the so-called business enablers) such as those risk management (7 employees), legal (7), audit (3), executive level (3) and apprenticeship which has seven staffers.
These are described in the report as mere business enablers, back office and non-operational staff who appropriately can be categorized as armchair employees as well. According to the NPA report, its simply unsustainable for UDB to continue having 54% or 75 of the Bank’s 140 employees deployed in non-core armchair roles or positions while the all-important operational section is kept at just 65 employees who constitute a mere 46% of the total structure as at the time of assessment by NPA researchers. Give us feedback on this story through our email: kamwokyatimes@gmail.com.
