Uganda’s economy, fore example, has evolved from the pre-colonial medieval economy, through the ‘enclave economy’ under the British imperialist government, to the post-independence ‘control model’.
Read more Parliament should free Bo U from government arm-twisting Although in the Bank of Uganda (Bo U) Act 1993 edition, Bo U is a corporate entity, the political influence that the bank suffered during Idi Amin Dada has been sighted under the present government like; printing paper money without a financial plan to support government spending spree programmes, and arm-twisting Bo U to sanction risky credits to government backed firms which as individual companies hold no bank accounts against which they can access loans.
In the end, such monetary episodes continue to fuel inflation, poverty and political problems.Read more James Obuku imports goods from China for retail purposes.At the height of the depreciation of the Shilling, Obuku took out a loan at an interest rate of 28 per cent which kept on fluctuating because it was not a fixed rate loan. If Obuku attempts to borrow again today, he says he will be given credit at an interest rate of 25 per cent which is still high.Kenya has written a law that puts a cap on lending rates at 4 per cent above the Central Bank Rate (CBR), among other clauses.This means that banks will not be allowed to lend at interest rates above the CBR+4 per cent.
For example, the current CBR in Kenya is 10.5 per cent.
This means that it will be illegal for banks to issue new loans above 14.5 per cent.
This new amendment in Kenya’s Banking Act has stirred a hot debate within Kenya, the East African region and globally.
The global economy has reduced control of economic indicators.
The world has never seen the level of economic freedom enjoyed nearly everywhere.
In the years gone-by, government used to control nearly everything.