KAMPALA — October 7, 2025: A new report from the Bank of Uganda (BoU) has revealed that the Central Bank quietly extended UGX 3.798 billion in loans to its own top Executive Management in 2025 at interest rates as low as 0 percent and not exceeding 3 percent even as the Bank maintained the national Central Bank Rate (CBR) at 10.25 percent.
The details contained in BoU’s Integrated Annual Report for the Financial Year ending June 30, 2025 expose a controversial internal credit scheme that allows senior officials to borrow from public funds at rates far below what the Bank demands from the private sector.
According to the report, the loans , issued in line with the Bank’s “staff loan policy” carry repayment periods of between one and twenty years depending on the Board’s discretion.
The BoU earned just UGX 43 million in interest from these executive loans during the year, compared to UGX 37 million in 2024 ,a marginal return for what amounts to a long-term drain on public capital.
While ordinary Ugandans face commercial lending rates averaging 18–22 percent, the central bank’s top brass are accessing near interest-free credit from the state’s own coffers the same funds the Bank is mandated to safeguard and regulate.
Conflict of Interest or Institutional Privilege?
The revelation raises serious governance and ethical questions about how Uganda’s apex financial institution treats its senior management relative to the citizens it serves.
Economists and financial analysts say the move undermines the credibility of BoU’s monetary policy and exposes an internal culture of privilege.
“This is a classic conflict of interest,” said one senior financial analyst who spoke on condition of anonymity. “The Bank of Uganda sets the lending tone for the entire economy, yet its executives are living in a parallel universe borrowing at 0–3% while the rest of the country drowns in expensive credit.”
The practice effectively turns the Central Bank into a lender to its own executives using funds ultimately derived from national reserves and government deposits resources that belong to the Ugandan public.
The BoU report does not disclose the individual beneficiaries, the amounts each received, or the specific purposes of the loans. It merely states that the advances were issued “in accordance with Bank policy” and that the preferential rates were “as determined by the Board of Directors.”
Such language raises questions about transparency and accountability, particularly since the same Board is responsible for regulating and auditing the Bank’s own conduct.
A former BoU insider familiar with internal procedures told us that such executive loans are typically justified as “staff welfare” measures, but the criteria for eligibility and approval are rarely disclosed publicly.
“It’s a tightly guarded practice,” the source said. “Even within the Bank, only a small circle knows the real numbers and beneficiaries. The justification is always ‘to attract and retain talent,’ but there’s little scrutiny on whether it’s financially sustainable or ethical.”
Outrage
The timing of the disclosure is particularly sensitive. It comes amid growing frustration over Uganda’s rising cost of credit where small business owners and farmers face prohibitive loan rates and limited access to affordable financing.
In stark contrast, BoU’s top executives , custodians of national monetary policy appear insulated from the economic hardships faced by the citizens their decisions affect.
Civil society actors and governance advocates say this practice points to a widening gap between public sector elites and ordinary taxpayers.
“When the same institution that enforces tight monetary policy gives its top officials loans at 0%, it’s no longer a policy issue — it’s moral hypocrisy,” said a governance researcher
Past Controversies
The revelation also rekindles memories of previous accountability concerns at BoU, including questions raised by Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) in past probes about staff allowances procurement practices, and asset management.
While the Bank has long defended such benefits as part of competitive executive packages, critics argue that the lack of public oversight enables self-serving financial decisions within one of Uganda’s most powerful institutions.
With the report now public, pressure is likely to mount on the Ministry of Finance and Parliament’s Public Accounts Committee (PAC) to demand explanations from the BoU Board and Executive Management.
Key questions remain on why is the Central Bank extending multi-billion shilling loans at near-zero interest while the national lending rate remains above 10%, Who approved these loans and under what justification and How does BoU ensure such internal lending does not compromise its independence or financial integrity.
Financial analysts observe that until such answers emerge, the Bank of Uganda’s moral authority to enforce fiscal discipline across the financial sector stands deeply undermined.
