DFC: We have real money, who wants it?

DFC Chief Development Officer, Mr Andrew Herscowitz

What you need to know:

  • The DFC Chief Development Officer Andrew (“Andy”) Herscowitz visit which ended yesterday follows the African leader’s summit that President Biden and Vice President Harris hosted in December last year in Washington, DC.  Africa is now being looked as the shaper of the future — not just the future of the African people, but of the world. This is rooted in recognition that Africa is a key geopolitical player.

Ugandan companies dealing in healthcare, transport, energy and some aspects of agricultural value chain such as coffee shouldn’t shy away from partaking the US International Development Finance Corporation (DFC) funding made available for promotion of private sector investment in the country, sector players have advised.
Additionally sectors engaged in financial services, small and medium enterprises (SMES) involved in economic activities with potential to create jobs or accelerate growth and development can also access the funding whose portfolio of $50 million (about Shs183.6 billion) can be increased to $1 billion (about Shs3.6 trillion) depending on demand.   

 According to the DFC Chief Development Officer, Mr Andrew Herscowitz, whose visit in the country is to raise awareness of DFC products and aims, as well as identify opportunities for private sector partnerships in Uganda, noted after a meeting with some of the leading private sector actors that: “you would see there is an opportunity for significant investment.”
Speaking in an interview held at the USAID Mission Director's residence in Kampala, Mr Herscowitz disclosed that there is some $50 million investment portfolio that has since been earmarked for private sector companies in the country to access for purposes of growing their operations, including beyond the country’s borders.
 “We can invest up to $1 billion for a transaction,” Mr Herscowitz revealed and addede: “When I say we have real money to invest in the country I mean DFC can provide financing directly to Ugandan companies and businesses beyond the $50 million for a transaction.”

Although their interest will continue to have US businesses set up shop here, it will not waver their focus towards supporting businesses domestic and regional businesses grow with a purpose of promoting economic development. 
 “Part of the reason why I am here is to figure out how we can make sure that people who don’t need a billion or million dollars can also get access to credit without difficulties. We need to do this to make sure that we create economic development in a long term in this country,” he said.
He continued: “Large projects are wonderful. It injects a lot of money in the economy and they also directly benefit the poorest people in the country, but our focus is also in finding smaller projects for about $5m or even less that will benefit small holder farmers and those that can get access to financing at rates that are reasonable and long term.”

It emerged that most of the financing will be done through institutions such as USAID and related agencies among other identified institutions, including several different Ugandan banks that will be providing loans for small businesses as DFC provide the much needed guarantee, lowering cost and risk of lending.
Private sector apex body in the country says they remain optimistic, arguing that any affordable financing, at a time like this—when businesses are trying to smart from the effects of the pandemic is welcome gesture, although the real benefit will be assessed after a year or so when there is something tangible to show for this initiative.