Gov’t Bullish as Uganda Jumps to 4th in Africa in New Financial Markets Index

The Ministry of Finance and Bank of Uganda have expressed confidence about Uganda’s economic outlook following a flattering performance in latest Absa Africa Financial Markets Index

The financial markets report for the year 2022, which was unveiled today, Tuesday by Absa Bank in Kampala, showed that Uganda had jumped from 6th to 4th position in Africa.

Uganda also ranked the best in the East African region, with a score of 66 points, up from 60 points the previous year.

David Wandera, the Absa Bank Executive Director and Head of Markets, while presenting the report, noted that Uganda excelled in Market transparency, tax and regulatory environment, where the country scored 81 points, up from 60 in 2021.

David Wandera – Executive Director and Head of Markets, Absa Bank Uganda

Uganda’s highest score was 90 which came in the Legal standards and enforceability pillar.

There was also great improvement in Access to foreign exchange where Uganda got 84 points from the previous 65, as well as Macroeconomic Environment and Transparency where the country got 82 percentage points.

Speaking at the release of the report, Ramadhan Ggoobi, the Permanent Secretary to the Ministry of Finance, said this performance was indicative of good prospects for the country’s economy, and therefore called on the private sector to take advantage of the stabilising economic situation.

“With this good performance; I expect investors and the overall private sector to take advantage of this and also continue to engage with government on improving the business environment for even better performance,” he said.

Mr Ggoobi further thanked Absa Bank for “sustaining this initiative to facilitate evidence based policy development in Africa.”

“Access to accurate data and information for us as policy makers is still a major challenge. We therefore welcome initiatives like this, especially when they come from the private sector.”

The Absa Bank Uganda Managing Director Mr Mumba Kalifungwa said the annual Financial Markets Index is intended to facilitate meaningful debate about the maturity and accessibility of Africa’s financial markets, and to record the openness and attractiveness of countries across the continent to foreign investment.

Mumba Kalifungwa – Managing Director, Absa Bank Uganda

“The report continues to assess progress and potential across six key pillars: market depth, access to foreign exchange, market transparency, the capacity of local investors, macroeconomic opportunity, and the legality and enforceability of standard financial markets master agreements,” he said.

“It a credible source of information and insight on financial markets in Africa and macroeconomic indicators, providing vital data for the business community, policy makers, economists, regulators and the various players in the market”

On his part Michael Atingi-Ego, the Acting Governor Bank of Uganda described the new report as very encouraging and extenuating to the economic recovery efforts taken by the Central Bank in the past month.

Michael Atingi-Ego – Deputy Governor, Bank of Uganda

“It is especially encouraging to us because it provides positive reinforcement of our initiatives,” he said.

The Governor however, noted with dismay, two areas where Uganda performed poorly in the index, namely; Market Depth with a score of 46 points, and the Local Investors’ Capacity with only 16 points.

“Regarding these two, we must grit our teeth, clench our fists and pull up our socks to tackle the persisting challenges in order to unlock the potential of financial markets. We have taken key steps, but a long road is ahead,” he said.

The Absa Africa Financial Markets Index, now in its sixth year, evaluates the financial development of African countries, primarily based on measures of market accessibility, openness and transparency.

Scores are determined by the relative, rather than absolute, performance of each country across six key pillars: market depth; access to foreign exchange; market transparency, tax and regulatory environment; capacity of local

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

This year, coverage has expanded to 26 countries with the addition of the Democratic Republic of Congo, Madagascar and Zimbabwe.

Overall, South Africa was the best performer with 90 points, followed by Mauritius with 76 points, while Nigeria came third with 67.

In the region, Kenya was ranked 8th with 61 points, followed by Tanzania in 11th place with 55, while Rwanda was 17th with 43 points.

The least performing countries in this year’s index are Ethiopia, Lesotho and Madagascar.

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