Africa: Uganda Maintains Fourth Spot in Absa Africa Financial Markets Index

Uganda also remained steady in legal standards and enforceability (Pillar 6) with a score of 85, showcasing advancements such as the adoption of netting legislation. This move aligns Uganda with international legal standards and is expected to further enhance the country’s attractiveness to investors.

However, the capacity of local investors (Pillar 4) emerged as an area requiring attention, with Uganda’s score dipping slightly to 14. The decrease was linked to a reduction in pension fund assets per capita, highlighting the need for initiatives to boost domestic investment capacity.

Alan Lwetabe, Director of Investments at the Deposit Protection Fund of Uganda, underscored the importance of creating a supportive environment for Ugandan businesses through tax incentives and education on financial markets and governance.

“We also need to give confidence to Ugandan businesses that they would be supported once they formalize and one of the areas to look at is tax incentives. We need to build a new Kampala corporate community,” he said.

He also stressed the need for enhanced liquidity in domestic markets to foster economic growth and socio-economic transformation.

Despite the challenges, initiatives such as the project to link centralised securities depositories and the ‘Okusevinga’ initiative aimed at improving retail investor access to government bonds are underway to bolster market depth and liquidity.

Looking forward, as Uganda navigates the complexities of enhancing its financial market infrastructure, the collaborative efforts of stakeholders across the private and public sectors are deemed crucial for the country’s continued advancement in the Absa Africa Financial Markets Index.