Uganda's stock market capitalisation rose more than 25% in 2025, alongside persistent obstacles to trading and investment, a speech published Oct. 20 by the Bank for International Settlements said.
Thin equity trading, few domestic listings and competition from government debt constrain further development, the speech, titled “Celebrating 30 years of capital markets development in Uganda”, said.
Domestic market capitalisation on the Uganda Securities Exchange now exceeds 15 trillion Ugandan shillings, the speech said. It put Uganda's unit trust investor base at 220,000, far below participation in neighbouring Kenya.
Kenyan unit trusts held about 851 billion Kenyan shillings for more than 3.6 million investors in the first quarter of 2026, the speech said. It presented that participation gap as an indication of Uganda's potential to expand.
But none of the main exchanges in Nairobi, Kampala, Dar es Salaam or Kigali recorded an initial public offering in 2025, the speech said. Companies increasingly raise money through private equity to avoid listing and disclosure requirements, it said.
Thin trading makes it difficult for investors to sell shares and discourages large investors from buying, the speech said. Too few growing Ugandan businesses seek funding through public markets, it said.
Government securities dominate investment portfolios, while high government bond coupons force businesses to offer higher returns to compete for savings, the speech said.
A more developed market needs alternatives including property investment trusts, infrastructure bonds, green bonds, asset-backed securities and sukuk, the speech said. Limited participation and trust also constrain the market, it said.
The speech traced Uganda's capital market development from the establishment of the Capital Markets Authority in 1996. The exchange received its licence in 1997, and Uganda Clays launched the country's first IPO in March 2000, it said.
MTN Uganda's 2021 IPO became the country's largest, followed by Airtel Uganda's listing in 2023, the speech said.
Listings of MTN, Airtel and Cipla added 8.1 trillion Ugandan shillings to exchange capitalisation and brought in 27,600 investors during former authority chief Keith Kalyegira's tenure, it said.
A further 65,000 investors put more than 2.2 trillion Ugandan shillings into markets through unit trusts under his leadership, the speech said. It identified financing the growth of businesses as the purpose of capital markets.
Regional integration has advanced through a platform linking trading systems in Uganda, Rwanda and Tanzania, the speech said. The East Africa Exchanges 20 Share Index tracks companies across four markets, it said.
Sustainability and green finance, Islamic finance and mobile investment platforms are reshaping finance globally, the speech said. Uganda needs to prepare its markets to receive capital, it said.
