Bank of Uganda establishment. PHOTO BY MICHAEL KAKUMIRIZI
The Government of Uganda has started the first phase of its strategy to achieve a $500 billion economic growth target within 15 years.
This strategy is focused on four key growth areas, aimed at achieving full monetisation and formalisation of the economy. These areas include: agro-industrialisation and light manufacturing with a focus on fully commercialising and formalising farming plus undertaking strategic value addition for export.
Tourism development with a focus on increasing tourist arrivals by five-fold under the current spend-per-tourist and length-of-stay.
Mineral-based industrial development including oil and gas with a focus on: undertaking quantification of mapped mineral deposits and their governance regime and delivering of first oil as we prepare for commercialising operations of the petrochemical industry.
Science, Technology and Innovation (STI) including Creative Industry and ICT with a focus on fast-tracking commercialisation of ongoing innovations in pathogen control and management for vaccines, diagnostics and therapeutics.
While officials in the Finance Ministry argue that the above areas will be guided by the tenfold growth strategy, the NRM Manifesto 2021- 2026, the National Development Plan IV (NDPIV) and the Programme Implementation Action Plans (PIAPs).
The deputy Governor Bank of Uganda, Dr Michael Atingi-Ego, says the government has articulated an ambitious Ten-Fold Growth Strategy to expand the economy from $50 billion to $500 billion by 2040.
Dr Atingi-Ego says this is not just a numerical target, but a blueprint for transitioning from a low-income to an upper-middle-income economy.
To achieve the tenfold growth strategy in the next 15 years, the government should undertake key structural reforms in the pensions sector, innovative financial products and strengthen market structure according to the Central Bank.
“Capital markets are not peripheral to this strategy – they are central. They are the critical infrastructure that will enable our economic leap forward, providing the financial mechanisms to channel resources into our key strategic sectors: agro-industry, tourism, mineral beneficiation, and technology-driven innovation,” Dr Atingi-Ego says.
With the above in his mind, Dr Atingi-Ego has provided three key things that will drive the tenfold growth strategy.
“All stakeholders should focus on three transformative priorities: First, pension sector reform. Our pension funds represent an enormous, largely untapped reservoir of domestic capital. We must create regulatory frameworks and investment products that enable these funds to become active, strategic investors in our capital markets,” he says.
Adding: “Secondly, we need innovative financial products tailored to our economic strategy. This means developing infrastructure bonds, green bonds, diaspora bonds, and other instruments that can mobilise capital for our key growth sectors. Third, we must strengthen our market infrastructure – improving risk management mechanisms, enhancing transparency, and creating more robust trading and settlement platforms.”
There is need for a special for a special committee to drive this transformation agenda.
Putting his arguments into perspective, Dr Atingi-Ego said: “Spearheading the Uganda Fixed Income Market Committee to unlock market potential, enhancing financial education, introducing products aligned to different levels of income, technology, innovation, risk management techniques.”
Related to this, he says, promoting an Environmental, Social and Governance (ESG) Framework for the banking sector for sustainable financing. Advancing the National Financial Inclusion Strategy and expanding digital financial services infrastructure are critical to Uganda’s economic development initiatives.
“Our consistent fourth ranking in the Africa Financial Markets Index is not an endpoint, but a launching pad for further development. Financial institutions to develop and propose new investment products aligned with our national growth strategy,” he says.
It is over three decades since Uganda embarked on economic reforms.
Reflecting on the past developments that have taken place in Uganda, Dr Atingi-Ego said: “Our potential is not theoretical. Since 2011, we have demonstrated our capacity for economic transformation: Our economy has grown from $28 billion to $50 billion, GDP per capita has increased from $898 to $1,093.”
Dr Atingi-Ego further told the participants during the Capital Markets for Economic Development Forum themed: “A Complementary Platform for Funding the Government of Uganda’s Tenfold Growth Strategy” that took place in Kampala on December 4 that gross domestic savings have risen from 16 percent to 21 percent.
He further stated: “These statistics are a testament to our collective potential. Realising this potential requires the combined efforts of government agencies, private sector institutions, international partners, and every Ugandan dedicated to our mutual prosperity.”
Ms Josephine Okui Ossiya, the chief executive of Uganda Capital Markets Authority, said: “Capital markets serve as the lifeblood of any thriving economy. They provide a platform for raising long-term capital, facilitating innovation, and enabling job creation. For Uganda, they hold the key to unlocking funding opportunities across sectors that underpin the tenfold growth strategy, particularly Agriculture, Tourism, Manufacturing, and Technology (ATMs).”
Ms Ossiya said the fixed-income market, comprising instruments such as government and corporate bonds, is especially significant. Globally, these instruments have proven essential in mobilising resources for large-scale infrastructure, industrialisation, and energy projects.
She further stated that efficient regulatory frameworks and improved secondary market liquidity are vital to attracting a broader investor base. Currently, Uganda’s bond turnover ratio averages 42.1 percent accounting for Shs15.3 trillion according to the CMA Quarterly Bulletin as of September, 2024. A more liquid market ensures better price discovery, reduces investment risks, and enhances investor confidence.
As per the tenfold economy growth strategy, the ATMs sectors are estimated to annually contribute a total of $95 billion by 2040 and are pivotal for job creation plus export growth. Corporate bonds issued by manufacturing firms can facilitate the development of industrial parks and enhance export capacity, fostering diversification and value addition.
Agricultural bonds can finance different opportunities within the agricultural sector such as irrigation systems, mechanisation, and agro-processing industries.
“Innovative instruments such as infrastructure bonds, green bonds, agricultural bonds, and diaspora bonds can unlock sector-specific investments. For instance, green bonds can finance renewable energy and environmental conservation projects, while agricultural bonds can support irrigation, storage facilities, and value addition—key components of our agricultural strategy,” Ms Ossiya said.
She also argues that technology-driven solutions through trading platform products such as e-bonds, and collective investment schemes have democratised access to investment opportunities and can modernise, enhance transparency, and reduce transaction costs. This aligns with Uganda’s vision of becoming a regional financial hub.
Additionally, institutional investors like pension funds and insurance companies hold vast potential. If just 10 percent of pension assets were allocated to infrastructure bonds, this could inject about Shs2.5 trillion annually into the economy according to URBRA).
The State Minister of Finance Planning and Economic Development Henry Musasizi said the theme of the Forum: “Financial Markets as a Complementary Platform for Funding the Planned Ten-Fold Growth’’ fits within the broader strategy of the government to grow the economy ten-fold.
Mr Musasizi said Nigeria is one of the African economies that has greatly used their Capital Markets as an alternative source of financing to complement bank financing.
“Capital Markets can mobilise both long-term and short-term finance for all sectors of the economy. While this is the case in other economies including Nigeria, the Capital Markets in Uganda remain small contributing about 7 percent of Uganda’s GDP. This implies that there are missing links to enable the Capital Markets to play a substantial role as a complementary source of long-term patient capital,” he said.
Dr Albert Musisi said although Uganda’s economic growth was better than its peers, and above the sub-Saharan average, actual GDP growth was below Uganda’s potential GDP growth estimated at 6 – 7 percent.
Dr Musisi said that accelerating growth and structural transformation requires further increases in both actual and potential GDP.
“In Uganda’s case, it means both actual and potential real GDP growth will have to grow significantly more than the level achieved last year of 6 per cent per annum. This means new sources of growth must be found and there must be improvements in the productive capacity of the economy to achieve a higher growth potential,” he said.
“Growing the economy ten-fold requires sustaining high economic growth rates for several years. Economies worldwide, including Uganda, are facing frequent internal and external shocks caused by, among others, globalisation (increased financial and trade linkages), climate change, and geo-political tensions.
