BusyMarkets Kampala #007: Uganda banks on enhanced trade in Africa

Left to Right: H.E Yoweri Kaguta Museveni, President of Uganda and H.E Cyril Ramaphosa, President of South Africa
Left to Right: H.E Yoweri Kaguta Museveni, President of Uganda and H.E Cyril Ramaphosa, President of South Africa

The Ugandan shilling traded stably on Wednesday the 15th of March 2023, supported by thin demand for dollars from importers and within the interbank market. Inflation still seems at bay due the good seasons in agriculture plus fuel prices at the pump continue to subdue. However, appetite for debt from the government establishment is still worrying.

H.E Yoweri Museveni’s biggest focus is Value addition and balance of payment on trade. The Ugandan President visited South Africa and Algeria on attempts to build strong bi-lateral trade terms must be something to study and see how it turns out. The outlook is for a stronger shilling just like Museveni’s bask in hope for enhanced trade opportunities in African markets.

What are the stocks to watch?


UMEME Uganda is currently at a market price of UGX 300.0000. UMEME has been more volatile than 90% of UG stocks over the past 3 months, typically moving +/- 5% weekly.

UMEME’s weekly volatility (5%) has been stable over the past year but is still higher than 75% of UG stocks. This provides a firm buying support level for the long-term investor. Having government confirm the buy-out clause which is priced at roughly UGX 720 per share, provides you with leverage and a massive capital gain and dividend pay-out as well.


This PLC delivered very solid results according to how they closed their books at end of 2022. These results were made public on all media channels on 13th March 2023. Service revenue grew by 11.1% to Ush 2.2 trillion. Data revenue grew by 24.0% to Ush 511.3bn.

Fintech revenue grew by 24.9% to Ush 656.1bn. Profit after tax (PAT) increased by 19.3% to Ush 406.1 billion. Total dividend for FY 2022 increased by 6.1% to Ush 15.9 per share (Ush 355.9bn). Each shareholder, registered on the books of the company by 01 June 2023, will receive a dividend of UGX 5.5 per share on 22 June 2023. As many PLCs close 2022 books I will be monitoring and bringing you insights on the best lucrative stock in Uganda.


Nairobi Stock Exchange (NSE) market capitalization closed at Ksh 1962.73 Bn in February, down from 1961.63 Bn at the start of the month. Investors expected dividends and higher earnings as blue-chip firms announce their full–year results. BAT, UMEME and BAT (as predicted) continue to rally upwards but things not looking good for Safaricom. In fact, most investors are selling their stock because of little trust in Safaricom’s business strategy.

The stock to watch on NSE is Equity Bank. Equity Bank Kenya acquired certain assets and liabilities of Spire Bank Ltd. Equity Bank acquired about 20,000 deposit clients with a value of KES 1.30bn. It also acquired est. 3,700 loan clients with a net carrying value of Ksh. 945m.

Treasury Bills and Bonds landscape

A small refresher, what are Bonds? Interest risk-free instruments that are medium and long-term issued by the government. What are the features of Uganda’s Bonds.

  • Uganda Shillings Investment
  • Treasury Bonds –medium- and long-term instruments. Issued in tenors of 2,3,5,10,15, 20 years
  • Have periodic payments called Coupons. Coupons are paid twice a year (Every182days)
  • Coupon rates are fixed for the duration of the bond investment
  • Minimum Amount Ugx 100,000


A bank Account in any commercial bank and a Central Securities Depository Form (CSD)

Benefits of investing in Bonds

  • They are safe and offer a steady stream of income over the investment period.
  • They offer a competitive rate of return.
  • They are credit/default risk-free instruments.
  • A good saving mechanism requires a minimum starting amount of Ugx. 100,000 only.
  • Government bonds are very liquid as they can easily be sold in the secondary market at competitive prices.
  • They can be pledged as collateral for borrowing

There was a T-bill auction on Wednesday 15th March 2023, the overnight money was trading at an average of 11.5% compared to the one-week money that was trading at an average of 12%. The results were 10.384, 10.512, and 13.003 for 3, 6 and 12 months respectively.

I predicted a +/- 0.3% change in interest rates for the 12 months’ paper, however we saw a +0.5%. We can all agree that interest on long term debt declined for all tenors, with yield on the two-year bond falling to 13.5 percent in January from 16.25 percent in November 2022 while yield on 10-year tenor reduced to 15.39 percent from 17.5 percent in the same period.

Next week comes with the three year and fifteen-year bond auctions; I don’t expect an interest rate out of range after the auction on 23rd March 2023. I am inclined to predict that the rates will hold still at 13.5% and 16.000% respectively. I urge investors to go for it, especially the 15-year tenor. It’s likely to never get better than this, especially this year.

Seth Nuwagaba is an investment banker at one of the biggest banks in East Africa.