By KT Reporter
The Government of Uganda has received 170 Billion Shillings being part of the World Bank financing for the manufacturing and export value chains through the INVITE Trust.
The INVITE (Investment for Industrial Transformation and Employment) Project is a Government of Uganda (GoU) initiative financed by the World Bank and other development partners through a Multi-Donor Trust Fund Grant, and provides grant products for business development under the Private Sector Foundation Uganda (PSFU) and financing products under the INVITE Trust.
The money received is the first tranche of the 800 Billion Shilling project, and comes after the fulfilment of conditions precedent to disbursement and consequently the World Bank lifting the moratorium.
This first tranche will be deployed towards the operationalisation of a Working Capital facility through eligible financial institutions, according to the Ministry of Finance, Planning and Economic Development.
Of the total 800 Billion Shillings, 642 billion will be channelled through the INVITE Trust for lending to the private sector through four financing facilities. These are Working Capital, Receivables Financing or Invoice Purchasing, Credit Guarantee, and Patient Capital in local currency.
The other 158 Billion Shillings, to be managed by the Private Sector Foundation of Uganda (PSFU), will finance grants to support business development services for private sector enterprises in manufacturing and export, according to Ramathan Ggoobi, the Permanent Secretary and Secretary to the Treasury.
“This shows government determination to increase access to affordable finance,” Ggobi said, adding that he looked forward to the full operationalisation of all the financing facilities.
One of the objectives of the funds is to create 200,000 jobs in the manufacturing and export value chains, increase incomes and support new economic opportunities and investments, including in refugee-hosting communities.
The move for this project was supported by a 2023 World Bank report highlighting Uganda’s need for industrial diversification to reduce poverty by increasing domestic output, value addition and export growth.
Bank of Uganda Governor, Michael Atingi-Ego, said the central bank would continue supporting the INVITE Trust because of the long-term implications of its success in the financing landscape.
INVITE will complement other government initiatives to transform and propel Uganda’s economic growth under the tenfold growth strategy through increasing access to affordable finance.
In August 2023, the World Bank halted new lending to Uganda in response to the country’s Anti-Homosexuality Act, which the bank deemed to contradict its human rights values.
However, Uganda has insisted that the law is aimed at upholding Uganda’s cultural and traditional values as a society and also protects vulnerable groups like children against sexual violence.
Earlier this month, almost two years later, the Bank said it would resume funding to Uganda after reports that it had worked with Ugandan authorities to put in place strong measures to mitigate potential harm coming from the law.
INVITE is also supported by the governments of the Netherlands, the United Kingdom and Sweden through a multi-donor trust fund-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
