Uganda is taking bold steps to harness private capital as a driving force for economic transformation.
According to Josephine Ossiya Okui, Chief Executive Officer of the Capital Markets Authority (CMA), the country has introduced significant reforms to facilitate private capital, aligning with the National Development Plan (NDP) III and the Capital Markets Masterplan Uganda.
Ms. Ossiya made the remarks today during a stakeholder engagement with Uganda Registration Services Bureau (URSB) and East Africa Private Equity & Venture Capital Association (EAVCA) in Kampala, aimed at discussing the recent developments to facilitate the domiciliation of private capital in Uganda.
”Uganda has made bold reforms to facilitate private capital. These reforms are in line with the National Development Plan (NDP) III and the Capital Markets Masterplan Uganda, which prioritize the mobilization of alternative financing sources through strengthening the legal and regulatory frameworks for Private and Venture Capital,” Ossiya said.
“The recently passed Capital Markets Licensing Regulations and Partnership Regulations provide clear pathways for structuring and registering private equity and venture capital funds within our borders. For the first time, general partners can confidently establish and operate in Uganda,” she added.
Key Reforms to Facilitate Private Capital
Ossiya revealed that the CMA has implemented several key reforms, including:
Capital Markets Licensing Regulations
This has been achieved by providing clear pathways for structuring and registering private equity and venture capital funds in Uganda, according to Ossiya.
Partnership Regulations
She noted that private capital can also be raised by enabling general partners to confidently establish and operate in Uganda.
Benefits of Private Capital in Uganda
Private capital can play a vital role in Uganda’s economic growth by, among other things:
Supporting Small and Medium-Sized Enterprises (SMEs)
This can be very instrumental in providing access to finance for SMEs, which are crucial for economic development.
Promoting Entrepreneurship
Private capital is key when it comes to encouraging entrepreneurship and innovation, leading to job creation and economic growth.
Attracting Foreign Investment
This, according to the CMA, can be achieved by showcasing Uganda as an attractive investment destination, increasing foreign investment and economic activity.
Initiatives to Support Private Sector Growth
It is important to note that the Ugandan government has launched several initiatives to support private sector growth, including:
Private Sector Development Programme
Running under the Private Sector Foundation Uganda (PSFU), this programme aims at improving the capacity of private enterprises and access to finance.
Uganda Development Bank
Funded through the African Development Bank (ADB), the UDB is providing affordable long-term capital to agriculture, agro-processing, and manufacturing sectors.
Parish Development Model
The government is also helping Ugandans to raise private capital through encouraging them to form Savings and Credit Cooperative Organisations (SACCOs) countrywide, through which they build their capacity to support small businesses.
Emerging Trends in Private Equity
Private equity firms are shifting their focus towards:
Environmental, Social, and Governance (ESG) Investing
They are doing this by prioritizing sustainable investments that promote economic growth while addressing social and environmental concerns.
Supporting Distressed Assets
This is being done by providing capital to companies affected by natural calamities and political unrest, in a bid to promote economic recovery.
By embracing private capital and implementing supportive reforms, therefore, Uganda is poised to unlock its economic potential and drive sustainable growth. With the right policies and investments in place, the country can create a thriving business environment that benefits both local and international investors.