What you need to know:
Financial securities are generally classified as either equity securities, such as stocks or debt securities, such as bonds
Only 0.1 percent, out of the more than 22 adult working-age Ugandans save through buying financial securities, according to Bank of Uganda Deputy Governor Michael Atingi-Ego
Speaking at the launch of a partnership between Xeno and MTN Mobile Money in Kampala yesterday, Dr Atingi-Ego said an overwhelming majority of Ugandans depended on friends, family and good samaritans for survival, which creates a high dependency level thus constraining investment and saving.
Therefore, he noted, the high level of dependency and vulnerability among the population makes it urgent for policymakers, regulators, entrepreneurs and captains of the financial sector to devise ways through which saving and investment can be boosted to change the fate of majority of Ugandans that remain vulnerable to shocks.
Dr Atingi-Ego also noted that the partnership, which is part of MTN’s larger plan through which the telecom seeks to enhance mobile financial services to drive a cashless economy, was long overdue, given the extent of the prevailing need that was brought to the fore through Bank of Uganda 2020 Financial Capability Survey.
For instance, he indicated just 57.6 percent of working Ugandans had saved in the 12 months leading to the survey while only 0.1 percent had saved through buying financial securities.
Financial securities are generally classified as either equity securities, such as stocks or debt securities, such as bonds.
Dr Atingi-Ego also referenced a Financial Sector Deepening Uganda report in which he said it had been revealed that only two out of three respondents were unable to raise Shs115,000 ($30) in seven days for emergencies, which exposes an overwhelming majority of Ugandans to high dependence levels thus the need for an urgent creation of safety nets through promoting investment and savings.
“The high level of dependency and vulnerability … makes it urgent for all of us to devise ways to boost savings and investment if we are to change the fate of the people we serve as policymakers, regulators, entrepreneurs, or captains of industry,” he said.
Saving and investment remains a challenge for a number of Uganda.
There has been noticeable growth, especially in collective investment schemes, whose assets under management during the period ended March 2022, grew to Shs1.1 trillion from about Shs567b as of March 2021.
However, according to Dr Atingi-Ego because if high level of dependency and vulnerability … it is increasingly becoming urgent for policymakers, regulators, entrepreneurs, or captains of the financial industry to devise ways to boost savings and investment to change the fate of Ugandans.