Uganda has jumped to a third-place ranking in the Absa Africa Financial Markets Index for 2025.
The financial index by Absa evaluates financial market development in 23 countries and highlights economies with the most supportive environment for effective markets.
The latest index indicates that Uganda’s overall score rose from 64 to 66 points for the East African country to be only behind South Africa at 86 and Mauritius at 76.
This means that Uganda has moved from 10th position in 2018, to fifth in 2021 and fourth in 2022 to now third position.
The index assesses countries according to market depth; access to foreign exchange; market transparency, tax, and regulatory environment; capacity of local investors; macroeconomic opportunity; and enforceability of financial contracts, collateral positions, and insolvency frameworks.
In 2025, Uganda’s best performance came in terms of macroeconomic environment and transparency where the country scored 87 points, only below Botswana which leads in Africa.
To this, Uganda beat giants South Africa and Mauritius which got 78 and 74 respectively and this stellar performance has been attributed to a fall in inflation and the country improving its non-performing loans ratio last year.
In market depth, Uganda got 46 while South Africa with 100 score and Morocco at 63 led the pack.
In terms of access to foreign exchange, Uganda scored 67, 20 points below leaders South Africa while in terms of market transparency, tax and regulatory environment, Mauritius led the pack with 95 points, closely followed by South African on 91 as Uganda got 76.
The report says survey respondents from Uganda mentioned the implementation of, or plans for, upgrades to central securities depositories to enhance settlement and support greater market liquidity.
“Authorities in Uganda and Zambia are working with Frontclear to develop their domestic interbank and money markets,” the report adds.
In terms of legal standards and enforceability, Uganda stagnated in fifth place got 85 points, below Mauritius and South Africa that each scored 100.
The report says Tradeclear was launched in Uganda in June 2024 allowing repo transactions under local GMRA and various derivative products under the standardised ISDA to be quoted on the platform and be eligible for the Frontclear guarantee through the Framework Agreement.
Bank of Uganda is drafting the Uganda Netting of Financial Agreements Bill and, once completed, it is expected to lead to a clean legal opinion from ISDA.
Uganda however performed poorly in terms of pension fund development scoring only 15 in 19th position, many points below leaders Namibia at 100 and South Africa at 66.
Speaking during the launch of the report at Kampala Sheraton Hotel, the permanent secretary of the Uganda Ministry of Finance and Secretary to Treasury, Ramathan Ggoobi hailed Uganda’s performance that he attributed to deliberate government efforts.
He specifically noted that Uganda has beaten all odds for the economy to continue growing.
“We are growing in an election year. It is not very characteristic. We are also ranked among fastest growing economies in the world and we will remain so in the mid term. This performance shows prudent macroeconomy performance and sustained reforms including expansion of the nominal GPD , income per capita expected to rise and inflation has been fully controlled,” Ggoobi said.
He also hailed the Uganda Shillings as one of the most stable in the region which the country’s exports have hit the $13.4 billion mark while foreign direct investments, tourism receipts and remittances have also grown steadily.
Ggoobi said in a bid to move Uganda further the index and deepen markets, government is committed to continue rebuilding capital markets that provide long term debt and equity financing to SMEs, attract venture capital that accepts higher risk, requires less collateral and build local capacity, strengthen corporate governance and further capitalise Uganda Development Bank to meet demand for long term finance.
The BOU Governor, Michael Atingi-Ego said more efforts are still needed to strengthen pension fund development.
