If you are a financial institution (FI) operating in Uganda, now is the time to explore Uganda Government’s medium-term priorities which your bank could position to tap into. The National Development Plan Three (NDP III) came into effect on 1st July 2020 and takes over where the NDP II left.
The big audacious goal (BAG) of NDP III, which is a five-year plan, is to “Increase Average Household Incomes and Improve the Quality of Life of Ugandans.” The overall plan theme is sustainable industrialization for inclusive growth, employment, and sustainable wealth creation.
I give it to our planners for always coming up with ear-friendly goals and themes. At this time when many leaders are taking time off to review the impact of the Coronavirus pandemic on their portfolio, as well as adjustments to their strategy, one of the areas that must be considered is the NDP III. Winning financial institutions are recommended to align some of their strategic projects to specific targets in the NDP III, to be and be seen to support government programs. Considering the government is one of the biggest business partners, aligning your FI’s strategic imperatives could make your journey light. Table 1 shows some of the most relevant areas for banks.
Table 1: Summary targets in NDP III relevant to FIs
|1||Enhance value addition in key growth opportunities||Rate of growth of the agricultural sector from 5.37% to 7%.||%GE of Bank portfolio to agriculture|
|2||Strengthen private sector capacity to drive growth and create jobs||Savings (% of GDP), GDP (35%)||Mobilize Savings|
|3||Consolidate & increase stock and quality of Productive Infrastructure||n/a||n/a|
|4||Increase productivity and wellbeing of the Population||The proportion of labor-force transitioning into gainful employment and enterprise development (from 34.5% to 55%)||Financial literacy training to youths and groups.|
|5||Strengthen the role of the State in development||n/a||n/a|
The NDP III has five objectives (Table 1), and 18 programs.
It was noted with concern that the alignment of the National Budget with the NDP was poor at just 59.7% for the FY2019/2020, according to the National Planning Authority. Going forward, all government entities must align their strategic plans as well to the NDP, for swift attainment of the plan ambitions.
We selected relevant targets for the banking sector. These may not be conclusive. But they help provide a financial institution with areas to consider optimizing to support national development imperatives. For example, under objective 1, banks have a big role to play to help contribute to the captioned target. And can provide ongoing reporting to the relevant Ministries and stakeholders as well as in their annual reports of their contribution to this national target.
Banks must specifically include a table in their strategic plan that speaks to the NDP III so that key issues are identified, and strategies to optimize them defined with clear scorecard targets to measure progress.
Have you completed your strategic planning process yet? We can help facilitate your process to win. With the right partners, you smile.
In the next issue, I will write about the newly passed National Payments System Act, 2020, and implications for your bank. Now is time to transform your digital agenda beyond the basic software to something excellent.
Copyright Mustapha B Mugisa, 2020. All rights reserved.