Strike Looms Over Interest Rates As Lukwago Joins Traders

SOURCE: THE RED PEPPER, 10 JANUARY 2012

KACITA's Isa Sekito

Kampala City Traders Association (KACITA) has vowed not to back down on the planned strike which will see all shops closed if government does not intervene in the interest rate saga.

The spokesperson of KACITA, Isa Sekito has called on over 42,000 members and other well wishers to join in the protest by closing shops and withdrawing all their money from the banks to suspend any loan repayments if the bank of Uganda doesn’t do something after 10^th of this month.

He argues that it is unfair for banks to impose the current interest rate. The Central bank’s inflation targeting has lead to a high increase in lending rates for commercial banks weighted at 25.4% in November 2011.

As expected, commercial banks have since raised loan interest rates making borrowers pay more than they were paying ealier.

KACITA argues that it is not fair for commercial banks to rush to protect their business interests while not caring for their customers, the borrowers. It further argues that if the current interest stands, borrowers are likely never going to able to off-set most of their current loans and mortgages will be taken over due to defaulting by borrowers.

Salary earners with bank loans are to be affected as well as interest rates sky rocket.

While speaking to traders recently, Kampala Lord Mayor Elias Lukwago become one of the latest leaders to support KACITA plans when he said: “This is a sign of failure on the side of the central bank to balance fiscal policy and monetary policy to support economic activity. I am behind you (KACITA) in whatever you are doing to fight this.”