Uganda's financial markets climb Africa index, addresses capital depth
Uganda has advanced to third place in the 2025 Absa Africa Financial Markets Index, a testament to patient reform. Bank of Uganda Governor Michael Atingi-Ego outlined efforts to deepen capital markets and address the 'sophistication paradox'.
Uganda's ascent in African financial markets
Uganda climbed to third place in the 2025 Absa Africa Financial Markets Index, scoring 66 points, a significant rise from 10th in 2017. This achievement reflects strategic reforms, including enhanced collateral frameworks, adoption of Global Master Repurchase Agreement (GMRA) and International Swaps and Derivatives Association (ISDA) documentation for interbank transactions, adherence to the FX Global Code, and comprehensive Primary Dealer framework reforms.
However, Governor Atingi-Ego highlighted a "sophistication paradox": despite world-class regulatory infrastructure, market depth and capital mobilization remain constrained.
Pension fund assets are modest at 12.2% of GDP, and private sector credit growth reached only 9.2% in September 2025, falling short of the 14% target.
This indicates that the primary challenge has shifted from regulatory sophistication to attracting long-term institutional investors and deepening market liquidity.
Building on-ramps for capital
To address the capital mobilization challenge, the Bank of Uganda has launched a comprehensive market-deepening agenda.
Key initiatives include lengthening the yield curve with a new 25-Year Government Bond and accelerating the rollout of ISDA documentation.
The Mortgage Refinance Bill, passed in September 2025, aims to mobilize long-term capital for housing.
Furthermore, the Real-Time Gross Settlement system replacement, launching in March 2026, will modernize payment infrastructure.
Project Okusevinga is democratizing access to government securities for retail investors via mobile platforms, while pension sector reforms seek to channel assets into strategic growth sectors.
A race against the oil windfall
Uganda's ambitious financial market reforms are a critical race against time, especially with the impending oil production peak by 2030. Without deep capital markets, the anticipated oil windfall risks becoming a vulnerability, potentially leading to currency appreciation and crowding out other sectors.
The success of the Tenfold Growth Strategy, aiming for a USD 500 billion economy by 2040, hinges entirely on the radical transformation of these financial markets.