Driving Uganda’s growth

Uganda

Anne Juuko, chief executive of Stanbic Bank Uganda, talks to The Energy Year about the recent evolution of investor confidence in Uganda, the bank’s role in the country’s energy sectors and the readiness of Ugandan SMEs to participate in oil and gas projects. Stanbic Bank Uganda is a financial services organisation.

This interview is featured in The Energy Uganda 2021.

How has investor confidence in Uganda evolved in recent years? What are its future prospects?
Uganda remains an attractive investment destination, having improved its position on the ease of doing business index over the years. With a fully liberalised economy offering security of investment, investors enjoy free inflow and outflow of capital, 100% foreign ownership of investments and the benefits of Uganda as a signatory to major international investment protection agreements like MIGA, OPIC and CREFAA.
Uganda has robust GDP growth and remarkable demographics. 68% of Uganda’s population is under the age of 24 years and the population is expected to grow from 37 million today to 96 million in 2050, therefore presenting a vast opportunity in an untapped growing market.
Uganda also has significant oil, iron ore, copper and gold reserves that are yet to be fully explored and opportunities in the area of infrastructure development, which is in need of huge capital investment.
Overall, Uganda is a nation that offers vast opportunities for investment across all sectors and a favourable investment climate. Without a doubt, the emerging oil and gas sector will be a significant contributor to the growth of Uganda’s economy and in this journey, Stanbic Bank remains committed to its purpose: “Uganda is our home and we drive her growth.”

What role does Stanbic Bank Uganda play in the country’s economy, including its energy sub-sectors?
Stanbic continues to play a critical role in the transformation of Uganda’s economy. Over the years, the bank has been instrumental in supporting Uganda’s economic growth through investments in key sectors such as agriculture, manufacturing, the SME sector, power and infrastructure, and Uganda’s budding oil and gas sector.
In line with the brand promise, “Making Dreams Possible,” Stanbic is true to its commitment to create bespoke solutions that meet our client’s needs. As the country’s largest bank, we leverage our position to maximise investment opportunities by focusing our support on all sectors across the economy to facilitate long-term sustainable growth.

What is the bank’s involvement in the oil and gas industry?
Following the recent signing of the key oil agreements by the government of Uganda, government of Tanzania and the EACOP [East African Crude Oil Pipeline] partners, Stanbic Bank’s role in the development of the sector has become more pertinent. This sets on course the next phases of development and production of the project while unlocking the vast opportunities the sector presents, especially for local content participation and regional economic growth.
In terms of the EACOP project, Stanbic Bank/Standard Bank Group is involved as the financial adviser. We support responsible investment through assessing and managing environmental, social and governance (ESG) risks to ensure the successful implementation of the project. In addition, our role as a bank is to provide financial solutions to clients across the entire value chain, especially for local companies looking to participate in the sector.
To support local companies, we have facilitated the development and capacity building of contractors and sub-contractors within the oil and gas value chain. We established our Business Incubator that has grown to five regional locations across Uganda. In the incubator, SMEs are exposed to modern management techniques, procurement and contracting standards, and market development skills.
We are also the only bank providing banking services in the remote Albertine Graben on the Western Rift Valley floor. We have tailored unique account solutions to support the project affected persons and enhanced financial literacy training for local communities in the oil and gas region.
And lastly, we have partnered with stakeholders to contribute and produce research studies and reports on the country’s readiness for the oil and gas sector and its impact.

What are the bank’s key objectives for 2021?
We shall continue to deliver on our promise to make dreams possible for our clients through four key focus areas.
This year, we aim to enhance our client experience using digital technology, data and human insight. We want to truly understand our clients, partners and employees as deeply and empathetically as we can in order to meet their needs and enable them to achieve their goals.
Our people are at the heart of our business and it’s our priority to ensure our teams are supported to achieve excellence and continue their growth and development as they contribute to the success of the organisation.
We are also ensuring that the business has a robust risk management framework that ensures we are doing business the right way to enhance the value our client can experience and enjoy.
And finally, sustainability is a key priority for our business. the bank is committed to the implementation of social, economic and environmental priorities which aim to deliver inclusive, enduring and environmentally sustainable value to our shareholders and to the societies and economies we serve.

How ready are Ugandan SMEs to collaborate and grow in the oil and gas industry?
SMEs in Uganda are keen to participate in the oil and gas sector. We also recognise that SMEs are a key engine of economic growth in Uganda and we are ranked as a top entrepreneurial country in the world, with over 160,000 MSMEs operating in Uganda, accounting for 90% of the entire private sector. SMEs employ over 2.5 million people. Despite their significant contribution to GDP, SMEs face numerous challenges including skills and knowledge gaps and access to both finance and markets.
To support SME involvement in oil and gas, we established the Stanbic Business Incubator, which aims to provide business development training programmes to SMEs to scale them up for opportunities in the oil and gas sector and the wider economy.
The Business Incubator was launched in February 2018 and is supported by various stakeholders, both private and public. To date, 2,392 individuals and 1,216 companies have been trained since the inception of the programme in February 2018.

What measures are being put in place to ensure that oil and gas projects have a positive impact, both socially and environmentally?
The bank is acutely aware of the E&S [environmental and social] impacts and takes these social and environmental issues seriously, bearing in mind the socio-economic benefits that are associated with these projects.
We support responsible investment through assessing and managing our ESG risks. Standard Bank will rigorously follow and be guided by its own internal policies as well as international standards and guidelines.
In this regard, we have developed a comprehensive E&S policy and framework, which ensures that we proactively identify, manage, monitor and embed E&S risk management into our lending processes. We apply national laws and standards and our exceptions list when assessing all transactions.
In addition, for large infrastructure transactions, we apply industry guidelines and international standards. The bank will follow the International Finance Corporation (IFC) Performance Standards and the IFC Environmental, Health and Safety guidelines. The project will also be guided by the OECD Common Approaches framework, which requires benchmarking against the IFC’s standards and guidelines.
Further, Standard Bank’s new fossil fuels financing policy sets out stringent conditions for lending to fossil fuel projects. Among other conditions, project owners must commit to minimising or reducing greenhouse gas emissions.

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