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Uganda’s Economy Stable & Resilient- Absa Report

Mumba Kalifungwa, Managing Director of Absa Bank Uganda

The Africa Financial Markets Index 2020 conducted by Absa Group together with The Official Monetary and Financial Institutions Forum (OMFIF) to gauge financial markets performance of selected countries has ranked Uganda 10th, the same position the country held the previous year.  

During the virtual launch of the AFMI 2020 report on Tuesday 9th February 2020, Absa Bank Uganda hosted industry experts to an Economic Outlook Forum to discuss the Africa Financial Markets Index for 2020. 

Various  experts described the ranking to mean that Uganda’s economy is stable and resilient.

Mumba Kalifungwa, the Managing Director of Absa Bank Uganda said the Absa Africa Financial Markets Index helps unpack market opportunities across various markets on the continent.

“…We give insights into the market opportunities, the strength of  capital markets and the strength of foreign exchange,” Kalifungwa said.

He said currently 23 markets are participating in the index Uganda inclusive.

“Uganda has been ranked 10th for the second consecutive year. This  signifies the progress we are making and there are certain prospects where we score highly such as access to foreign exchange, strong macro-economic environment and the ability to be open to business from other potential investors,” he said.

Speaking about the outlook of Uganda’s economy, Kalifungwa said that  based on Absa predictions, they are looking at economic recovery of about 4% in 2021 going forward.

He however said the prediction is dependent on how fast the COVID-19 vaccine gets rolled across the continent.

Dr. Michael Atingi-Ego, the Deputy Governor, Bank Of Uganda said  that the AFMI report will act as a guide  investors as well as policy makers in financial markets.

“By measuring the openness, transparency, and accessibility of financial markets, the AFMI measures exactly what matters for building the critical framework for investor decision making and thus enhancing confidence in the investment destinations. It also provides a vital benchmark to guide policymakers and regulators in closing the gaps in the African financial markets,” Atingi-Ego said.

He revealed that the Central Bank has embarked on various measures to develop capacities of local financial market investors using existing technologies and boost market depth through promoting investment, reforming the primary dealership systems, developing road border trade among other interventions.

 “Seeking to boost the capacity of local investors, the BoU in consort with stakeholders is developing a platform to enable low-income earners to invest in government securities using mobile phones,” he said.

He noted that although Uganda has maintained the ranking of 10th since 2017, it was stable- attributing Uganda performance in the financial markets, Uganda’s strength in access to foreign exchange, strong score in market transparency, tax and regulatory environment among others.

He added that Uganda needs to learn  from its peers to catch up in market depth, the capacity of local investors, as well as the legality and enforce-ability of standard financial market master.

The Absa Group Chief Executive,  Daniel Mminele, said the  AFMI 2020  continues to guide policy makers, and financial market participants as a key reference in developing a robust financial market in Africa He added that the index has created a common fact base to allow cross country comparison and anchoring policy discussion between regulators, investors, corporates, on how to promote accessibility, open and transparent markets.

By Drake Nyamugabwa

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