Overview:
According to Leonard John Businge, EAVCA’s Country Coordinator in Uganda, businesses also suffer from poor guidance, sometimes from legal advisors who lack investment knowledge.
Uganda’s ability to attract international investment is being undermined by a combination of weak financial intermediaries, limited deal flow, and misalignment between investor expectations and business readiness, a new report has revealed.
The study, The State of Private Capital Markets in Uganda, conducted by the East African Venture Capital and Private Capital Association (EAVCA) with support from the European Union through the Deal Flow Facility (DFF), finds that local enterprises are losing out in a competitive race for global capital due to inadequate advisory support and structural gaps in the investment ecosystem.
“There is a mismatch between the support advisors are able to give businesses and the sophistication investors expect,” noted Amanda Kabagambe, Managing Director of Bethel Advisors Ltd. She warned that this gap risks pushing investors toward more organised markets with stronger intermediaries.
The problem is compounded by Uganda’s limited deal activity, which restricts advisors’ exposure to complex transactions and slows the growth of their expertise. “When deals do not come out as expected, investors tend to change and tighten terms,” Kabagambe explained, underscoring how missed opportunities erode investor confidence.
According to Leonard John Businge, EAVCA’s Country Coordinator in Uganda, businesses also suffer from poor guidance, sometimes from legal advisors who lack investment knowledge. “There is need to strengthen the intermediaries. We want to reduce the time they spend talking back and forth with the investors,” he said.
The report calls for regulatory reforms to enable more funds to domicile in Uganda, arguing that this would widen access to capital, especially for SMEs and startups. Yet, structural challenges remain: while many emerging opportunities are in early-stage sectors such as climate, energy, and sustainability, 67 percent of investors continue to focus on growth-stage companies—leaving a financing gap for newer ventures.
Cultural barriers also play a role. Many Ugandan entrepreneurs prefer to retain full control of their businesses, even if it limits their ability to attract strategic capital. Copycat trends, particularly in high-interest sectors like e-mobility, further risk oversaturating markets and diluting investor interest.
Despite Uganda’s removal from the EU’s list of High-Risk Third Countries earlier in 2024, the lingering impact of its previous designation continues to shape investor perceptions.
“Unlocking investment in Uganda requires investor–investee alignment, stronger intermediary support, more local capital mobilisation, and targeted investor readiness,” said Brenda Amony, Portfolio Relationship Manager at DFF.
For the EU, the findings provide a roadmap for intervention. “Our goal is to build a more inclusive and dynamic financial ecosystem for Ugandan enterprises,” added Cristina Banuta, Programme Manager for Access to Finance, Agribusiness and Land at the European Union Delegation.