Connect with us

Business & Money

Bank of Uganda Warns: High Staff Exits Threaten Stability

The central bank also stressed the need for more collaboration between banks and fintech firms to reduce the “talent drain” by exploring partnerships rather than competing for the same pool of professionals.

Published

on

Dr. Michael Atingi-Ego,Deputy Governor, Bank of Uganda: A significant factor driving the recent wave of staff exits is the rapidly expanding fintech sector, which provides employees with growth opportunities, flexibility, and competitive salaries. Fintech companies are not only attracting talent from traditional banks but are also spearheading the digital transformation of Uganda's financial services landscape

: Bank of Uganda warns in its October report that high staff exits are jeopardizing the stability of the nation’s banking sector.

By Charles Wachira

The Bank of Uganda (BoU) has raised alarm over the rising number of staff exits within the banking sector, citing the trend as a potential risk to the industry’s overall stability. 

This concern comes amidst a growing wave of resignations, particularly among mid-level and senior management, which the BoU says could negatively impact the operational efficiency, institutional memory, and strategic direction of banks.

Growing Concern Over High Turnover

In a recent report, the central bank pointed out that high employee turnover within Uganda’s banking institutions is creating a challenging environment.

 “The frequency of staff departures, especially at critical managerial levels, undermines the continuity of key functions and may expose institutions to operational risks,” said Dr. Michael Atingi-Ego, the Deputy Governor of the Bank of Uganda. 

He emphasized that the problem is more pronounced in private banks, which have been grappling with retaining top talent in an increasingly competitive financial landscape.

According to BoU’s data, some institutions have witnessed turnover rates as high as 25% in management roles over the past year, with many employees leaving for opportunities in emerging sectors such as fintech and telecommunications, where salaries and benefits are often more lucrative.

Implications for the Banking Sector

The central bank highlighted several ways in which this trend is disrupting the sector. A loss of institutional memory is one of the biggest concerns.

 When experienced staff leave, their knowledge of the bank’s operations, clients, and compliance systems is lost, and replacing that expertise can take time and resources.

“High turnover, especially in compliance and risk management, puts banks at risk of regulatory breaches,” noted Atingi-Ego.

 He added that there is a growing concern about the ability of smaller and mid-tier banks to compete with the larger players who have the resources to attract and retain top talent. For example, smaller banks might struggle to maintain the same level of customer service and operational efficiency due to the frequent replacement of experienced employees.

The BoU also indicated that frequent staff changes could lead to instability in customer relationships. In the banking industry, relationships are often built over time, and customers, particularly corporate clients, value stability.

 A rapid succession of relationship managers could weaken client trust and loyalty, potentially leading to a loss in revenue.

The Financial Impact

As a result of these exits, some banks have reported increased operational costs. 

Recruiting and training new staff, particularly for specialized roles, is an expensive and time-consuming process.

 Moreover, many institutions are offering higher salaries and more comprehensive benefits packages in an attempt to attract and retain qualified professionals.

“It’s a competitive job market, and banks are having to increase compensation packages to keep their best people,” said a senior executive at a leading Ugandan bank, who requested anonymity. “This drives up costs for the banks, but we’re left with little choice if we want to maintain quality service.”

However, despite the challenges, there are signs that some banks are trying to adapt.

 Some institutions are investing heavily in employee development programs aimed at improving retention.

 Others are exploring automation and digital banking platforms as a way to reduce their dependence on human resources for certain functions.

The Role of Fintech in Attracting Talent

One of the major drivers of the current wave of staff exits is the booming fintech sector, which offers employees opportunities for growth, flexibility, and higher pay. 

Fintech companies are not only absorbing talent from traditional banks but are also leading the digital transformation of the financial services sector in Uganda.

“The fintech industry is offering more agile working conditions and better incentives, which is why we’re seeing a lot of movement from traditional banks to these new players,” said Paul Bwogi, a senior HR consultant based in Kampala.

 He noted that the competition for talent has never been more intense, and banks need to think creatively about how to make themselves more attractive places to work.

BoU’s Recommendations

In light of these challenges, the Bank of Uganda has made several recommendations to stabilize the sector. First, it suggests that banks invest more in long-term employee engagement strategies, focusing on creating a work culture that emphasizes career development and work-life balance.

“Retention needs to be prioritized, and this means focusing not just on salaries, but on the overall work environment,” said Atingi-Ego. “Banks must work harder to build loyalty among their employees, especially those in key operational roles.”

Additionally, BoU has recommended a more comprehensive review of the compensation structures within the banking sector to ensure they remain competitive.

 The central bank also stressed the need for more collaboration between banks and fintech firms to reduce the “talent drain” by exploring partnerships rather than competing for the same pool of professionals.

Conclusion

The ongoing staff exits in Uganda’s banking sector pose a real threat to stability, but they also present an opportunity for the industry to evolve.

 By addressing the underlying causes of high turnover, banks can not only mitigate the risks but also position themselves to thrive in a more competitive and rapidly changing financial landscape. 

However, this will require deliberate strategies focused on employee retention, adaptability, and stronger relationships between traditional banking and the fintech sector. The coming years will be critical in determining how well the sector can adapt to these challenges and continue to support Uganda’s growing economy.

Keywords:Bank of Uganda:Banking sector stability:Staff turnover:Financial institutions

Economic impact

Charles Wachira, Managing Editor of businessworld, has disproportionately worked as a foreign correspondent in Nairobi, Kenya. Formerly an East Africa correspondent with bloomberg, covering the business beat he has since been published by a legion of other authoritative global news platforms including Global Finance Magazine, Toward Freedom, Earth Island Journal, and Dialogue. earth and so on. He is also a co-author of, Success to Significance, a biography of pre-eminent global industrialist and renowned philanthropist Dr. Manu Chandaraia. He’s an alumnus of the University of Nairobi and Nairobi School.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business & Money

Patricia Ithau: CEO of WPP-Scangroup, Leading Africa’s Marketing Giant

Patricia Ithau was honoured with the Head of State Commendation in 2020 for her impactful contributions to Kenya’s economic growth and business development. As an accredited executive coach and certified Emotional Intelligence practitioner, she remains dedicated to nurturing future leaders who champion emotional intelligence and holistic leadership

Published

on

Patricia Ithau, CEO of WPP-Scangroup, combines visionary leadership with a commitment to social sustainability. Her journey from L'Oréal Africa to heading sub-Saharan Africa's largest marketing group reflects her dedication to empowering women in leadership and fostering future business leaders, driving meaningful progress across Africa's corporate landscape.

: She leads WPP-Scangroup PLC, the largest marketing and communication group in sub-Saharan Africa, driving innovation, business growth, and social impact across the region.

Patricia Ithau leads WPP-Scangroup PLC, the largest marketing and communication group in sub-Saharan Africa. She took over as CEO on March 14, 2022, succeeding Bharat Thakrar at the helm of this Nairobi Securities Exchange-listed company.

Under her visionary leadership, WPP-Scangroup continues to redefine the marketing and advertising landscape in East Africa through a multi-agency, multi-disciplinary approach.

 Her focus on pushing the boundaries of creativity and innovation has positioned the company to drive growth and deliver groundbreaking solutions across the region.

Early Life and Academic Foundation

Patricia’s leadership journey grew from a strong academic foundation.

Patricia Ithau studied at Loreto Convent Msongari in Nairobi before earning her Bachelor of Commerce degree from the University of Nairobi.

Further expanding her knowledge, she earned an MBA in Strategic Management from the United States International University-Africa. 

She also completed advanced management programs at prestigious institutions like Strathmore University, IESE Business School, INSEAD, and Oxford University, laying the foundation for a distinguished career in business leadership.

Career Milestones: L’Oréal Africa and Beyond

Before joining WPP-Scangroup, Patricia was the founding CEO of L’Oréal Africa, where she significantly drove the company’s growth and success in the region.

Under her leadership, L’Oréal’s African subsidiary generated $25 million in annual revenue, employed over 270 people, and produced 40 million units annually. 

One of her key achievements was leading one of the first acquisitions of a local business by a multinational in East Africa, demonstrating her ability to drive growth and market penetration in the competitive FMCG sector.

Advocacy for Women in Leadership

Patricia has actively championed women in leadership, advocating for creating opportunities that allow women to thrive in the corporate world.

As an Ambassador for the Women on Boards Network (WOBN) in Kenya, she has worked to elevate women into leadership positions.

 She holds board positions at organisations such as ABSA Bank Kenya, Jambojet Ltd, Vivo Fashion Group, and the British Chamber of Commerce.

 Furthermore, Patricia actively supports corporate governance and social impact as a Trustee for the Vodafone Foundation (UK) and the M-PESA Foundation.

Overcoming Personal Challenges and Building Resilience

In addition to her professional achievements, Patricia’s journey has been marked by resilience. 

She was crowned Miss Kenya in 1986 during her first year at the University of Nairobi. 

Navigating societal judgments and stereotypes during this period helped shape her leadership abilities, teaching her invaluable lessons in self-confidence and perseverance.

Recognition and Awards

Patricia’s contributions to Kenya’s economic growth and development have not gone unnoticed.

 In 2020, she was awarded the Head of State Commendation (HSC) for her outstanding role in business development.

 Patricia is also an accredited executive coach and certified Emotional Intelligence practitioner, emphasising her commitment to fostering future leaders who embrace emotional intelligence and holistic leadership practices.

Corporate and Social Impact

Patricia’s leadership extends beyond the corporate world. 

As East Africa Regional Director for the Stanford Institute for Innovation in Development Economies (SEED), Patricia has driven sustainable business growth and job creation across sub-Saharan Africa. 

Through SEED, she has supported over 200 businesses in tackling leadership challenges and fostering innovation, contributing significantly to the region’s economic transformation.

Family and Personal Values

Patricia is also deeply committed to her family. 

She proudly raises her two daughters, Mueni and Makena, instilling in them the values of hard work and resilience.

 Her role as a mother aligns with her broader mission of mentoring and guiding the next generation of leaders.

Conclusion: A Legacy of Leadership and Innovation

Patricia Ithau leads with vision, innovation, and a strong commitment to social sustainability, from her strategic achievements at L’Oréal Africa to her current role as CEO of WPP-Scangroup.

 Her dedication to advancing women in leadership, her contributions to the business community, and her efforts in developing future leaders make her a lasting influence on Africa’s corporate sector, inspiring and driving progress across the region.

Continue Reading

Leadership

Dr Peter Ndegwa Leads East Africa’s Top Company by Market Value

Dr. Peter Ndegwa leads Safaricom’s enterprise expansion, driving innovation in cloud services, cybersecurity, and IoT to empower sectors like healthcare and education, shaping Kenya’s digital economy.

Published

on

Dr. Peter Ndegwa exemplifies Safaricom’s commitment to long-term growth, balancing local insights with a global vision to drive transformative impact across Kenya and beyond.

: Discover how Safaricom, East Africa’s top company by market cap at $5.5 billion, continues to lead the region’s telecom sector under visionary CEO Dr. Peter Ndegwa.

Since taking the helm at Safaricom PLC in April 2020, Dr Peter Ndegwa has steered the telecommunications giant into a new era of growth and transformation.

 Safaricom, best known for M-PESA, its groundbreaking mobile payment platform, has continued to evolve under Ndegwa’s leadership, further cementing its position as a key player in Africa’s digital economy.

 Known for his strategic focus and innovative mindset, Ndegwa has achieved a series of significant milestones that reflect both his dedication to Safaricom’s mission and his responsiveness to the demands of a fast-changing industry.

In 2024, Safaricom made headlines by reducing Ndegwa’s annual bonus by KSh62 million.

 This decision, though surprising, aligns with the company’s broader strategy of reinvesting in expansion, especially in Ethiopia.

 Safaricom’s entry into Ethiopia, one of Africa’s most untapped telecom markets, is a major achievement under Dr. Ndegwa’s leadership, requiring substantial capital and adept navigation of regulatory hurdles.

 By 2024, Safaricom Ethiopia had attracted 4.6 million subscribers, a feat that not only signals the potential of this market but also demonstrates the resilience and agility that Ndegwa has instilled within Safaricom.

 The bold decision to channel resources into this high-stakes venture underscores the company’s commitment to long-term growth over immediate executive rewards, signalling a strategic shift towards sustainable development.

Central to Dr Ndegwa’s vision has been the continued evolution of M-PESA, which he expanded into a comprehensive financial ecosystem through integrations with global platforms and the introduction of the M-PESA Super App.

 This app, with a variety of mini-apps catering to different services, has strengthened M-PESA’s position as a pillar of financial inclusion across East Africa. 

Safaricom’s commitment to enhancing digital financial services has driven up transaction volumes and revenue, making M-PESA a vital part of Kenya’s economic framework and a model for other markets looking to bridge financial access gaps.

Ndegwa has also championed digital transformation through products that respond directly to customer needs.

 The Safaricom MyCounty app, launched in partnership with county governments, is one of these innovations. By offering essential services through mobile, the app represents Dr Ndegwa’s commitment to customer-centric innovation, further reinforcing Safaricom as a digital solutions leader.

Beyond consumer services, Dr Ndegwa has prioritised the expansion of Safaricom’s enterprise segment, offering technology solutions such as cloud services, cybersecurity, and IoT to various sectors including healthcare and education.

 This growth in enterprise offerings reflects Safaricom’s role as an enabler of Kenya’s digital economy, diversifying revenue streams while positioning itself as a trusted partner for businesses.

On the technology front, Ndegwa oversaw the rollout of Kenya’s first 5G network in 2021, expanding its reach to multiple cities.

 This advancement not only offers faster, more reliable internet but also lays the foundation for future innovations across sectors, reinforcing Safaricom’s competitive edge in data services.

Social responsibility is a key component of Dr Ndegwa’s approach. Safaricom, under his leadership, has committed to becoming a net-zero carbon emitter by 2050, setting a new standard for corporate sustainability in Kenya.

 Safaricom’s programs in education, healthcare, and economic empowerment have further cemented its brand as a socially responsible organisation that contributes meaningfully to society.

Despite challenging economic conditions, Dr Ndegwa has maintained Safaricom’s strong financial performance by focusing on operational efficiency and product innovation. 

His resilience and adaptability have enabled Safaricom to thrive amid inflation and currency fluctuations, with M-PESA and data services driving revenue growth.

In recognition of his accomplishments, Ndegwa received an Honourary Doctorate in Business Management from Meru University in October 2024, where he also serves as Chancellor.

 This accolade reflects his contributions not only to Safaricom but also to Kenya’s business landscape, underscoring his commitment to inspiring future leaders.

Dr.Ndegwa’s appointment as Safaricom’s first Kenyan CEO was a pivotal moment, as previous CEOs were expatriates.

 Following the passing of his predecessor Bob Collymore, both the board and the government showed strong support for appointing a local leader.

 Michael Joseph, Safaricom’s former CEO and interim head during the transition, highlighted the desire for a Kenyan to lead the company, a sentiment echoed by former 

By aligning executive rewards with Safaricom’s evolving performance goals and reinvesting resources into expansion, Ndegwa demonstrates a long-term commitment to growth.

 His journey as CEO showcases how he has successfully balanced local roots with a global outlook, driving Safaricom’s mission to transform lives across Kenya and beyond.

Continue Reading

Business & Money

Dr Joshua Oigara Powers Stanbic, Africa’s Top Bank with SA Roots

Dr. Joshua Oigara blends a strong foundation in finance and economics with a doctorate in leadership effectiveness and sustainable growth, shaping his leadership approach with both practical expertise and academic insight.

Published

on

Under Dr. Joshua Oigara's leadership, Stanbic has achieved a remarkable 35% increase in digital transactions, thanks to innovative mobile banking solutions and SME-focused lending platforms. Currently, 93% of the bank's transactions are processed digitally. This digital-first strategy reflects Dr. Oigara's vision to align Stanbic's services with the growing tech-savviness of Kenya's population, ensuring the bank not only meets evolving customer needs but also stays competitive in a rapidly changing and crowded market.

: He leads Africa’s largest Bank by assets, driving innovation and growth across the continent with a focus on sustainable banking

When  Joshua Oigara took the reins as Chief Executive of Stanbic Bank Kenya and South Sudan on December 1, 2022, he brought with him a rare combination of practical expertise and scholarly insight. 

His predecessor, Charles Mudiwa, had cultivated nearly 20 years of growth at Standard Bank Group, leaving behind a solid foundation. 

Oigara, a seasoned leader known for his transformative tenure at Kenya Commercial Bank (KCB) from 2013 to 2021, took on the new role fortified by a recent academic milestone—an honourary degree of Doctor of Humane Letters, from the Kibabii University which he received on Friday, March 3, 2023. 

Dr. Oigara’s doctorate is not merely an academic achievement; it is a foundational element of his leadership philosophy. 

The university emphasised that his nomination was based on his exceptional accomplishments in finance, economics, and leadership, as well as his achievements and dedication to shared values and charitable endeavours.

In addition to his doctorate, Dr Oigara holds an MBA with distinction in International Business Management from Edith Cowan University in Australia, a Bachelor of Commerce degree from the University of Nairobi, and has completed the Advanced Management Programme at INSEAD in Fontainebleau, France.

With his doctoral focus on leadership effectiveness and sustainable growth in financial institutions, Oigara’s education and experience have significantly informed his strategic direction at Stanbic.

With a background in finance and economics, bolstered by a doctorate in leadership effectiveness and sustainable growth, Oigara’s leadership philosophy is rooted in both practical expertise and scholarly depth.

 The bank has made substantial strides under his guidance, growing its customer base, expanding its network of branches, and enhancing its digital services.

 Under his leadership, Stanbic has seen a 35% increase in digital transactions, driven by new mobile banking innovations and SME-focused lending platforms– 93  per cent of transactions at the local lender are processed digitally. 

 This digital-first strategy reflects Dr Oigara’s goal to align the bank’s services with Kenya’s increasingly tech-savvy population, an approach that not only meets client needs but also ensures Stanbic remains competitive in a crowded market.

 And it also reflects Oigara’s commitment to aligning the bank’s offerings with the needs of Kenya’s increasingly tech-savvy population.

Rapid Expansion and Financial Growth

In his first year, Dr Oigara focused on expanding Stanbic’s regional footprint while solidifying its position as a leader in digital banking and sustainable finance.

 Under his leadership, the bank has added five new branches, expanding its reach to more customers across Kenya.

 In terms of financial growth, Stanbic Kenya has seen an 8% increase in deposits, totalling Ksh 300 billion in 2023.

 The bank’s loan book also grew by 6%, driven by a focus on SMEs and digital lending platforms.

This growth is evident in Stanbic’s strong performance in customer acquisition, with the number of active customers increasing by 10% year-on-year. 

These efforts have also positioned Stanbic as the third-largest bank by assets in Kenya, with total assets valued at over Ksh 500 billion.

Focus on Sustainable Finance and Innovation

A cornerstone of Oigara’s strategy is the promotion of sustainable finance.

 In 2023, Stanbic launched a $150 million SME facility aimed at empowering small and medium-sized enterprises—described by Oigara as “the heartbeat of Kenya’s economy.” 

His leadership has seen the bank increase its support for businesses prioritising environmental, social, and governance (ESG) principles.

 Notably, Stanbic has financed over Ksh 1.2 billion in renewable energy projects, including solar energy ventures, since 2022.

Dr Oigara’s commitment to sustainable development also extends to Stanbic’s adherence to the United Nations Principles for Responsible Banking (PRB), positioning the bank as a leader in promoting environmentally and socially responsible investments.

 This aligns with Oigara’s philosophy that financial institutions must drive the transition to a greener, more sustainable economy.

“We are at the frontier of a new era in African trade,” Oigara shared during an African Continental Free Trade Area (AfCFTA) forum, highlighting Stanbic’s potential to leverage regional trade financing to foster cross-border business.

Challenges and Complex Markets

However, the terrain Dr Oigara navigates is arguably challenging. Stanbic competes in a high-stakes market, with other major players like Equity Bank and KCB, as well as digital lenders, all vying for market share.

 This competition requires both resilience and innovation, traits that Dr Oigara has emphasised throughout his career.

In South Sudan, the complexity multiplies, given the country’s political and economic volatility.

 “South Sudan remains a complex but promising market,” he said at a recent shareholder meeting. “Through a data-informed approach, we’re able to make strategic investments while managing the inherent risks.” His research on risk management in dynamic environments has informed Stanbic’s cautious yet optimistic stance in South Sudan.

Another challenge has been adapting to Kenya’s increasingly stringent regulatory landscape. 

Heightened Central Bank oversight on data privacy and credit management adds a layer of compliance, one that Oigara’s strategic background helps him manage.

 His academic foundation in sustainable business has enabled him to balance these regulatory demands with innovative solutions, implementing secure digital platforms that meet both client needs and regulatory standards.

Vision for the Future

Looking ahead, Dr. Oigara is focused on expanding Stanbic’s digital offerings and enhancing its regional presence through strategic partnerships.

 His leadership has set the stage for further growth, with Stanbic poised to continue increasing its footprint across Africa.

Opportunities on the Horizon

Despite these challenges, Dr. Oigara sees substantial opportunities for Stanbic’s growth.

 The African Continental Free Trade Area (AfCFTA) opens new doors for cross-border trade financing, allowing Stanbic to facilitate regional commerce.

 “We’re at the frontier of a new era in African trade,” he shared during an AfCFTA forum, underscoring his vision for positioning Stanbic as a key financial enabler across East Africa.

Building a Legacy of Informed Leadership

Dr. Joshua Oigara’s leadership of Stanbic Bank represents a powerful combination of industry experience and academic rigour. 

With assets totalling $20 billion and a presence in 20 countries, Stanbic is a testament to the vision of Standard Bank Group, which was founded over 160 years ago to serve the financial needs of Africa.

 Dr. Oigara’s contributions build on this legacy, as he guides the bank through a rapidly changing financial landscape.

Reflecting on his leadership journey, Dr Oigara said, “Education has empowered me to lead with a strategic, forward-thinking approach, ensuring we meet the evolving needs of our clients and foster resilience in the communities we serve.”

As Stanbic Bank continues to expand its footprint across Africa and innovate in the digital and sustainable finance spaces, Dr Oigara’s leadership ensures that the bank remains well-positioned for future success, solidifying its role as Africa’s largest and most dynamic banking institution.

Key Figures:

  • 35% increase in digital transactions (2023)
  • 93% of transactions processed digitally
  • 5 new branches added in 2023
  • 8% growth in deposits totaling Ksh 300 billion
  • 6% increase in loan book
  • Ksh 1.2 billion invested in renewable energy projects since 2022
  • $150 million SME facility launched in 2023

Continue Reading

Trending