Uganda’s financial market ranked third in E.A - study
Posted Monday, September 16 2013 at 01:00
Meaning. The findings mean that Uganda needs to up its game to advance into East Africa’s financial hub.
Uganda’s financial market has been ranked the third developed in East Africa, the 2013/14 financial markets report shows.
Of the six countries in the region, Kenya which ranked 31 out of 148 world economies that were surveyed topped the East African list, followed by Rwanda in the 57 position.
Uganda on the other hand ranked 77, ahead of Tanzania’s 99 and Burundi’s 146 positions, respectively.
The World Economic Forum financial development report focuses on a set of long-term measures to assess the overall competitiveness of financial systems including the availability of financial services, access to credit and loans, affordability, financing through local equity markets and availability of venture capital.
The other factors are corporate governance, legal and regulatory issues, financial stability and non-banking financial services, among others. The findings mean that Uganda needs to up its game if it is to become a financial hub within the East African region.
Alpha Capital Partners managing director Stephen Kaboyo said Uganda’s financial sector is still constrained with slow market growth and financing market infrastructure challenges which limit the availability of financial services, financing through the local capital market and access to credit.
He added that while some progress has been achieved in developing the financial sector, the development has been gradual and modest.
Mr Kaboyo, however, explained that Uganda needs to invest in revamping public infrastructure, fully leverage ICT uptake, improve further the quality of public and private institutions and develop the financial sector further.
Although Ms Angela Kanyima Kiryabwire, the Capital Markets Authority (CMA), Uganda, acting chief executive officer, said there has been tremendous growth in the local capital markets in the past eight months when compared to a similar period last year, the latest findings indicate that most countries in the region back trailed from last year’s ranking, with exception of Kenya.
Uganda, for instance, slipped 15 places back from the 62nd position while Tanzania fell back 39 steps back from last year’s 60th position to 99 this year.
Rwanda also declined from 49th position last year, while Burundi slid from 144 to 146. Kenya, however, improved from the 54th position to the current 31st rank. Hong Kong topped the world as the country with the highly developed financial markets, a position it has held for three consecutive years since 2011.
This was attributed to the country’s high level of capital markets efficiency, trustworthiness, and stability of the system, according to the report. The country also has particular strengths in highly developed foreign exchange and derivatives markets.
Meanwhile, Uganda slipped 19 positions back in the global competitiveness index, falling to 129 position out of 148 countries, from 123 (out of 144) in 2012 and 121 (out of 142) in 2011.
This was attributed to corruption, difficulty to access finance and inefficient government bureaucracy, among others.