Availability of foreign currency makes Uganda most investable market, says Stanbic
What you need to know:
- Uganda operates a liberalised foreign exchange market and capital account, which allows free movement of capital in and out of the country.
Standard Bank Group, which operates Stanbic, has said Uganda remains the most investable market in Africa due to availability of foreign currency.
Speaking in Kampala during the Stanbic Global Markets Economic Forum, Mr Jibran Fauz Qureishi, the Standard Bank group head of Africa research, said Uganda’s forex market remains liquid, noting the country “has not had challenges with forex market liquidity like other countries such as Nigeria, Egypt, Ghana and Kenya”.
Uganda operates a liberalised foreign exchange market and capital account, which allows free movement of capital in and out of the country.
This, Mr Jibran said, has affordable Uganda an opportunity to have a liquid foreign currency market because investors are free to enter and exit investments such as bond markets.
Mr Jibran also indicated that Uganda’s economic growth is now expected to pick-up to 6 percent in the 2022/23 financial, which is higher than previous forecast of 5.5 percent.
The growth is projected to increase further to 6.5 percent and 6.8 percent in the subsequent years supported by investments in the oil and gas sector.
Standard Bank Group also expects foreign direct investment inflows to pick up in the next three years, supported by mineral earnings such as gold.
The economy is also expected to benefit from tourism receipts resulting from an increase in visitor numbers from within Africa.
Mr Jibran also noted that Standard Bank expects Uganda’s first oil by 2026.
However, the Ministry of Energy Permanent Secretary, Ms Pauline Irene Batebe, said Uganda was “still on course to start oil production in 2025”, having completed all technical works.
In the next two years, she said, investment in various oil projects, will peak, the stage at which many local companies, especially in logistics, procurements and catering will start to benefit.
Mr Jibran also noted that inflationary pressures had started to relax, which will subsequently lead to a reduction in the Central Bank Rate during the course of this year.