The Uganda Capital Market

The Capital Markets Industry

The current state of Uganda’s financial markets can be described as an emerging market, which is at an early stage of development. Over the last 15 years, financial sector reform has been implemented by, among other things, strengthening of the Central Bank, liberalization of the capital account, interest rates and the foreign exchange market; the reintroduction of treasury bills in 1990; privatization – which has seen to the growth and development of the private sector in the country; the establishment of the Capital Markets Authority (to regulate the securities industry in the country) and the establishment of Uganda Securities Exchange (USE) to facilitate a vibrant secondary market for issued securities. The removal of restrictions on foreign participation in the sector has resulted into improved efficiency and innovativeness in the sector.

Structure of the Market

The market generally consists of:

The Regulator, Capital Markets Authority CMA (Uganda) which is an autonomous body that was set up following the enactment of the Capital Markets Authority Statute 1996 to Regulate, promote and develop Capital markets in the Country.

The Market – Uganda Securities Exchange, which is the only Stock Exchange in the country. The USE is a Self Regulated Organisation (SRO) meaning that it creates, amends and implements its own Rules and Regulations.

The Market Players who include brokers/dealers (have a license to trade on the USE floor), Investment Advisors, Collective Investment Schemes (who pool the funds of their clients for investment purposes), Registrars and the Investing public.

Taxation in the Industry

Withholding Tax on Dividends 10% taxed at source
Stamp Duty Nil
Capital Gains Tax Nil
Corporate tax 30%
Currently there are no restrictions to foreign investors in the Ugandan market.

Click Here to go to the Uganda Securities Exchange website.