Elias Biryabarema Kampala
Ugandan President Yoweri Museveni has refused to yield under pressure to striking local traders who are demanding that the authorities direct banks to stop raising interest rates, as retailers in the capital locked their shops for a second day.
Museveni, whose administration cracked down on a wave of opposition-led protests against surging prices last year, urged a union of city traders to hold more talks with the government and banks.
“I will not accept pressure and confusion,” he was quoted as telling union leaders in a statement issued by his office on Wednesday.
“These strikes and confusion will harm our economy. There is no reason for resorting to strikes when we can discuss these issues amicably.”
Ugandan authorities are likely to be keen to prevent the low-level protest from escalating, especially as thousands have taken to the streets in Nigeria to protest against fuel subsidy cuts that have more than doubled the petrol price.
Business owners in east Africa’s third-largest economy are angry about higher interest rates on their bank loans since mid-2011, which they say are crippling their businesses.
The rise in interest rates followed a sharp tightening of monetary policy after inflation hit an 18-year high above 30 percent in October.
The rate has eased in the past two months, falling to 27 percent in December.
Uganda’s Bankers’ Association said it would be impossible for commercial banks to consider lowering interest rates until the central bank of Uganda cut its benchmark rate, now at 23 percent. – Reuters