(L-R) Jeff Gable, Keith Kalyegira, Prof. Samuel Sejjaaka, Prof. Pamela Mbabazi, Patrick Ayota & David Wandera during the panel discussion

The newly released 2022 Africa Financial Markets Index indicates that Uganda has registered strides ranking fourth out of 26 surveyed markets in Africa.

Uganda’s overall score in the Absa Financial Markets Index increased by six points to 66 this year, moving the country up to fourth from sixth place in the rankings. This is alluded to strong data reporting standards and new environmental, social and governance incentives.

Uganda is ranked fourth from sixth position in 2021. It is currently rallying behind South Africa, Mauritius and Nigeria. It is however ranked first in the East African Community, followed by Kenya in the eighth position; Tanzania, eleventh; Rwanda dropping from to 17th position and DRC in the 23rd position.

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The report shows that Market transparency, tax and regulatory environment registered the largest increase to 81, from 60 in 2021. This was largely due to an improvement in ESG initiatives and standards after the Bank of Uganda launched a strategic five year plan from 2022-27 which focuses on the ‘sustainability of the financial system and climatic risk.

“Access to foreign exchange, Uganda’s score increased to 84 from 65 which was mainly due to an improvement in foreign exchange interbank liquidity. The score for FX reserves adequacy also rose. This indicator stayed relatively stable at four months of imports in Uganda in 2021, while it deteriorated more significantly in other AFMI economies,” the report indicates.

Despite tumult in the global economy and slightly worsening inflation, Uganda’s solid growth prospects and relatively strong macroeconomic data standards ranks it third behind only Egypt and Botswana.

Speaking at the launch of the report Gable, the Head of FIC Research and Chief Economist Absa said the economic growth in Uganda is progressively robust post-pandemic recovery.

“Inflation was painful in 2022, but should ease significantly during 2023.Moderating grain, fertilizer and oil prices, copied with easing supply chain constraints and improved weather conditions, should help bring inflation down. Fiscal consolidation is a theme across Africa as financial conditions have become more challenging and some countries face debt distress,” he said.

Mr. David Wandera, the Executive Director and Head of Markets at Absa Bank said their Interbank FX turnover increased by 20% year on year. This is a reflection of the confidence of the world in our country and prospects of future growth in trade.

He said despite the challenges faced our gross domestic product growth has been good ranging at 4.4% annually over the past years and it’s forecasted to rise to 5.9% over the next five years.

“There has been some good work done under legal standards and enforceability. Currently BoU is working on a way forward to improve use of master agreements and encourage a more liquid interbank market,” he said.

Mr. Michael Atingi-Ego, Deputy Governor of Bank of Uganda said the annual assessment of Africa Financial Markets Index (AFMI) is vital for policymakers, regulators, users and providers of capital to learn from challenges  and milestones in pursuing our national and continental advancement.

“We are grateful to Absa for shining a bright light on the African continent, increasing investor interest and encouraging us to learn from one another across several pillars to nature deeper capital markets,” he said.

He said through assessment of the Africa Financial Markets Index, we will be able to demonstrate our efforts towards answering our present challenges nationally.

Mumba Kalifungwa, the Managing Director of Absa Bank said; “We believe financial markets are vital to Africa’s growth, providing an opportunity to tap into domestic capital and be better positioned to access global capital.”

“We are grateful to policy makers and regulators and market practitioners whose input was essential to the findings presented under the index. Uganda’s ranking has steadily improved over the years. In 2021 we ranked 6th to currently a rank of 4th out of 26 markets surveyed,” he said.

Ramathan Ggoobi, Permanent Secretary to the Treasury, Ministry of Finance, Planning and Economic Development said the improvement Uganda has made on the Africa Financial Markets Index, is commendable however we still have massive work to do especially on market depth and capacity of local investors.

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