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Uganda Maintains Fourth Position in Absa Africa Financial Markets Index

February 4, 2025

(2 Minutes Read)

Uganda ranks fourth in the 2024 Absa Africa Financial Markets Index, reflecting strong macroeconomic stability and improved market transparency, though it faces challenges in market depth and pension fund development. With a score of 63, up from 62 in 2023, Uganda trails South Africa, Mauritius, and Nigeria. The index, which assesses 29 African economies, evaluates financial market infrastructure across six key pillars: market depth, access to foreign exchange, market transparency, pension fund development, macroeconomic environment, and legal standards.

Key strengths include an impressive score of 87 in macroeconomic stability, driven by sound fiscal policies and a decreasing inflation rate. Legal standards also scored well at 85, indicating progress in regulatory frameworks. Market transparency received a score of 76, while challenges persist in market depth (46 points) and pension fund development (15 points), one of the lowest scores in the index.

Deputy Governor of the Bank of Uganda Michael Ating-Ego highlighted the need for reforms to enhance market competitiveness and noted the importance of a stable monetary policy for investment and growth. The report emphasizes the necessity for Uganda to develop its pension system and diversify financial products to compete more effectively in the region.

As Uganda navigates global economic trends and manages its oil revenue, debt, and infrastructure investments, its integration into the East African Community and the African Continental Free Trade Area offers further growth opportunities. The index, now in its eighth edition, serves as a crucial benchmark for Africa’s financial sector progress.