BoU links Uganda’s high interest rates to heavy govt borrowing

The Bank of Uganda (BoU) has linked Uganda’s high interest rates to heavy government borrowing from the domestic financial market, saying the government’s demand for funds is competing with the private sector.

BoU Governor Michael Atingi-Ego told Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) on Monday that excessive domestic borrowing reduces the funds available to businesses and individuals, contributing to higher lending rates.