$500b economy puts Uganda’s capital markets in spotlight

KAMPALA— Uganda will need deeper capital markets to mobilise the long-term financing required to transform the economy into a $500 billion economy by 2040, Finance Minister Henry Musasizi has said.

Mr Musasizi said the government cannot finance the country’s ambitious economic transformation through public expenditure and bank lending alone, calling for greater mobilisation of private savings through capital markets.

“This ambition cannot be achieved through Government expenditure or bank financing alone,” Mr Musasizi said yesterday.

He was speaking at the launch of the 30th anniversary celebrations of the Capital Markets Authority (CMA) at the Uganda Media Centre in Kampala.

The minister said Uganda’s capital markets had evolved over the past three decades from a relatively small industry into an increasingly important component of the financial system.

By August 2026, domestic market capitalisation had reached Shs24.28 trillion, while the corporate bond market had mobilised about Shs290 billion.

Collective Investment Schemes (CIS), which pool money from investors and invest it in various financial assets, had about Shs7.08 trillion in assets under management.

Mr Musasizi said the figures demonstrate increasing participation in formal investment and provide businesses with alternatives to traditional bank financing.

But he said the scale of investment required to achieve the government’s Tenfold Growth Strategy demands a much deeper capital market.

The strategy targets a $500 billion economy by 2040 and envisages rapid expansion in infrastructure, industrialisation, commercial agriculture, tourism, energy, housing, manufacturing, technology and innovation.

Ugandan enterprises will also require substantial financing to expand their operations and compete in regional and international markets, he said.

Mr Musasizi urged Ugandans to shift from a culture of saving to one of investment, saying savings would have greater economic impact if channelled into productive ventures.

He said this would require increased financial literacy and investor education so that ordinary Ugandans understand available investment opportunities and can make informed decisions about their money.

The minister, however, cautioned that the expansion of the capital markets must go hand in hand with investor protection.

He said strong disclosure requirements, market surveillance, enforcement, corporate governance and public awareness would be critical in maintaining public confidence in the sector.

The comments come as CMA marks three decades of regulating Uganda’s capital markets and seeks to position the sector as a more important source of long-term development finance.

CMA chief executive officer Josephine Okui Ossiya said the Authority had grown from a small institution into an agency with a broader responsibility to connect Ugandans’ savings with investment opportunities.

She said the Authority was making progress under its new five-year strategic plan, with 63 per cent of its 43 strategic indicators achieved or exceeded in the first year.

Work-plan implementation stood at 99.5 per cent, she said.

Ms Ossiya said assets under Collective Investment Schemes had risen to approximately Shs7 trillion, while total funds mobilised through capital markets stood at about Shs23.4 trillion.

Public understanding of capital markets had also risen to 60.8 per cent, while the number of CIS investor accounts had reached 241,000.

She said domestic capitalisation of the Uganda Securities Exchange had surpassed Shs15 trillion, adding that CMA currently regulates more than 160 licensed market participants.

The growth, she said, demonstrates the increasing role of capital markets in mobilising domestic resources and broadening access to investment opportunities.

Dr Japheth Katto, CMA’s first chief executive officer, said one of the Authority’s biggest achievements since its establishment was demonstrating that a capital market could function in Uganda.

The anniversary provides an opportunity for the sector to assess how far it has come while considering what must be done to make capital markets more accessible, deeper and more effective in financing Uganda’s economic ambitions.

For the government, the challenge is now to translate growing savings and investment participation into the large pools of patient capital needed to finance long-term projects without placing excessive pressure on public finances or the banking sector.

A deeper capital market could provide companies and government with additional avenues for raising long-term financing while giving households and institutional investors more opportunities to participate in economic growth.