Kampala City Traders Association members have vowed to go on with their three day strike that kicks off on 11.January.2011 which will see all shops closed according to the KACITA spokesperson Issa Sekitto.
The traders will also go to commercial banks and withdraw all their money all in an effort to compel government to intervene on the issue of interest rates which the traders say is eating into their profits and leaving them with barely nothing.
It is not clear what the traders will resort to after the three days. The strike is likely to paralyse upcountry businesses too as they use Kampala as a hub to replenish on their stock.
The traders were in a meeting today (Tuesday) with the Prime Minister to try and avert the looming strike but they failed to come up with a common position. The governor Bank of Uganda, Prof. Emmanuel Mutebile was asked what his take was regarding the commercial banks interest rate, he said that he had no legal basis to force the hands of banks interest rate on the charges.
“As we tighten monetary policy by increasing the Central Bank Rate, we expect commercial banks to follow suit and increase lending rates. I have no legal basis to force the hands of banks on the charges, its matter for them and their clients,” said Mutebile
Bank of Uganda has increased the prime commercial bank lending rate to over 30% in a bid to control the high inflation but this has left many traders and borrowers alike choking on the high interest rates.
