To unpack what this means for institutional investors, the economy, and Uganda’s place in regional and global markets, Muhereza Kyamutetera, Executive Editor of CEO East Africa Magazine, sat down with Mosetsana Mahlafunya, the Head Absa Investor Services at Absa Investor Services Pan Africa. In this conversation, Mosetsana explains—in simple, practical terms—what custodial services are, why Absa chose to return to this space now, and how these services can unlock new opportunities for pension funds, insurers, asset managers, and other long-term investors. She also shares Absa’s broader vision for building a Pan-African investor services platform that not only supports Uganda but also strengthens Africa’s capital markets as a whole.
For starters, many people out there may not fully understand what custody services are, yet they might be interested in using them. Could you, in very simple terms, explain what custody or custodial services are all about? What exactly do they mean, and why should someone care about them?
Custodial services are essentially about the safekeeping of assets. In the past, this meant physically storing share certificates or other documents in secure vaults. Today, the service has evolved significantly. Whenever an investor buys shares, bonds, or other fixed-income instruments, the custodian ensures two key things: first, that those assets are safely held, and second, that the transfer or movement of ownership between parties is executed seamlessly.
In simple terms, the custodian acts as a trusted guardian of investments—making sure assets are protected, transactions are settled properly, and records are kept accurately. Because this involves not only shares but also cash—and in some markets even property, infrastructure, and other asset classes—custodial services operate in a highly regulated environment. This evolution reflects the growing complexity of investments, and the custodian’s role is to provide investors with both security and confidence in managing their assets.
Absa has previously offered custody services in Uganda and is now reintroducing them. Why now? What has informed this decision at this particular time, and what makes it the right moment for Absa to return to this space?
When the decision was made to exit the custodial business, it was part of a broader strategic realignment during the Barclays disinvestment from Africa. However, as Absa, one of the very first products we identified as essential to reintroduce was custody—because of the critical value it brings to the wider franchise and to the markets we serve.
Custody services enable capital to flow seamlessly across markets and allow us to support clients more effectively through a range of value propositions. Re-entering custody in Uganda is therefore more than just a product decision; it is a strong signal of our long-term commitment to deepen Uganda’s capital markets. By doing so, we aim to build investor confidence, attract both regional and global investment flows, and strengthen market infrastructure. Ultimately, custody is the backbone of any economy because it underpins trust and facilitates investment—both international and local.
From a broader Absa Group perspective, how does Uganda fit into your Pan-African strategy for investor services and capital flows? And on a more practical level, if someone is asking why they should choose Absa’s custodial services over any other provider, what sets you apart—what do you do best, and what unique value do you bring to the table?
Our strategy is very clear—we are building a Pan-African Investor Services platform that connects global investors to African opportunities and African investors to global markets. With operations already established in South Africa, Mauritius, Kenya, Mozambique, Botswana, and now Uganda, we are demonstrating both our confidence in Uganda’s growth story and our commitment to supporting it.
What sets us apart is that we don’t just provide a custodial service—we build partnerships. We have taken time to understand the evolving needs of investors, both local and international, and what they consistently look for is a trusted provider who delivers efficiency, leverages technology, and aligns with global standards without losing the local context. That is exactly what Absa offers.
Technology sits at the heart of our solution. In such a highly regulated environment, you need adaptable systems that not only ensure compliance but also minimise risk and improve efficiency. Through our platform, clients gain access to over 80 international markets via a single provider, supported by a dedicated team here in Uganda. This means they benefit from consolidated reporting, standardised processes, and the reassurance of working with professionals who understand both the Ugandan regulatory landscape and global best practice.
Finally, we’ve invested in a real-time digital portal—already live in most of our markets—that allows clients to monitor their transactions instantly. This tackles long-standing challenges in the custodial space, such as reconciliation delays and settlement inefficiencies, and gives investors the transparency and immediacy they demand today.
Ultimately, clients don’t just want to hear about the technicalities of custodial services—they want to know the tangible benefits. As I like to say, don’t tell me how good the fertiliser is, tell me how beautiful my flowers will be. So, what are the key outcomes or real value that clients can expect when they choose to work with Absa Custodial Services?
Custodial services operate in a highly regulated environment, which naturally comes with certain limitations. But that’s also where our value lies—because we help clients navigate those complexities with the right insights, expertise, and systems.
What most clients are really looking for is not just someone to keep their assets safe, but a partner they can trust. That’s the role we play. We invest the time and effort to align our systems, reporting, and processes with each client’s unique needs. By doing this, we free them from day-to-day operational risks and technical challenges, so they can focus on what really matters—strategic planning, designing strong investment strategies, and achieving long-term growth.
In short, Absa Custodial Services goes beyond safekeeping. We give clients the confidence and space to focus on the bigger picture, while we handle the operational side with efficiency and reliability.
Looking at the economic fundamentals, Uganda’s pension sector assets grew by 18% in FY 2023/24 to UGX 25.4 trillion—now about 12% of GDP according to URBRA. Fund managers also reported assets under management of UGX 4.78 trillion by December 2024, up 4.7% from the previous quarter. While this growth is encouraging, one recurring concern is that most of these funds are concentrated in government securities and bonds, with limited diversification. By working with a cross-border player like Absa, how can custody services help unlock more investment potential for pension funds and other institutional investors beyond the traditional options?
Pension fund assets represent one of the most important pools of long-term capital in Uganda. For this capital to truly drive economic development, it must be invested with confidence—and that’s where custody plays a critical role. Custody services provide safekeeping, transparency, reporting, and efficient management of pension assets, enabling funds to diversify across multiple asset classes. Locally, this means trustees and asset managers can focus on strategy and growth, knowing that their assets are secure, settlements are efficient, and reporting is timely.
The infrastructure we’ve built also gives regulators and policymakers confidence that pension savings are being properly safeguarded, thanks to the robust controls we have in place. Beyond the local market, our custody services unlock access to over 80 international markets, opening the door for more diversified and productive investments—whether in capital markets, infrastructure, or regional opportunities.
Of course, regulatory limits still exist on what can be invested offshore or regionally. But with the right level of trust in custodians, we can begin to unpack those limitations over time. Ultimately, custody is not just about safekeeping; it is about unlocking the full potential of Uganda’s pension industry—tapping into the UGX 25.4 trillion you mentioned—and channelling it into sustainable growth and economic transformation.
dfcu Bank and Monitor Publications Crown Season 7 Rising Woman Champions, Celebrating Uganda’s Top Women EntrepreneursYou’ve mentioned that through Absa’s custodial services, investors in Uganda can access over 80 global markets. This directly ties into the question of capital inflows. Uganda has set out an ambitious 10x Growth Strategy, which will require significant long-term and affordable investment capital from both local and international sources. How does Absa position itself to help Uganda unlock these opportunities and attract the scale of global capital needed to achieve such growth objectives?
Many international clients—global banks, institutional investors, and asset managers—are looking for strong regional providers who can help them navigate Africa. That’s where Absa’s Pan-African platform comes in. Our role is twofold: first, to partner with clients in growing their businesses globally by unlocking new opportunities and managing risk as markets evolve; and second, to provide seamless regional services that make investing across African markets more efficient and attractive.
For Uganda, this is particularly important. Our custodial offering is designed to increase both inflows and outflows of capital in a way that builds confidence and transparency. What differentiates Absa is that we don’t separate regional custody from global custody. Instead of clients managing multiple systems and teams, we provide a single, centralised view—covering opportunities, reporting, and transactions across more than 80 markets.
This integrated model gives international investors the confidence and clarity they need, and it positions Uganda as a credible destination for long-term capital. It also aligns well with the country’s 10x Growth Strategy by helping attract the scale of investment required to fund infrastructure, enterprise growth, and broader economic transformation.
You’ve emphasised that custodial services operate in a highly regulated environment, and that trust is central to their success. How is Absa working with Uganda’s local institutions—such as the Capital Markets Authority, Bank of Uganda, and the Uganda Securities Exchange—to align custodial services with global standards while still keeping the local context in mind?
From a Ugandan perspective, we are working very closely with the Capital Markets Authority, the Bank of Uganda, and the Uganda Securities Exchange—not only to align them with the custodial services we provide, but also to help strengthen the market so that it meets global standards while retaining its African-Ugandan identity.
A big part of this work involves building the right infrastructure, promoting integration, and driving efficiencies that directly benefit our clients. We actively engage regulators and market operators to ensure Uganda’s practices are benchmarked against international standards, while at the same time drawing lessons from the other markets where Absa is already active. This cross-market experience helps us introduce tested innovations and regulatory best practices into Uganda.
Ultimately, our partnerships with regulators and policymakers are about shaping the future of the market together—making sure custodial services continue to evolve in ways that foster safety, transparency, and efficiency. That’s what investors expect in mature markets, and that’s the standard we are committed to helping Uganda achieve.
Earlier, you mentioned that you have a good feeling about Uganda and the East African region. As one of the continent’s largest institutions with access to cross-border data and insights, what are you seeing ahead? How does the future look for Uganda’s custodial and capital markets, and what key trends or shifts are informing Absa’s decision to return at this point in time?
I’d respond to that in two parts. First, my excitement about Uganda is shaped by the conversations we’ve been having with international clients—whether from South Africa or other parts of the region. What we see is a market that is becoming deeper and more diversified, backed by stronger regulation and infrastructure. Uganda is also taking important steps toward market integration, which is a huge move toward aligning with global standards.
At the same time, we are seeing increasing participation from both domestic and international investors. That reflects a growing sense of trust and confidence in Uganda’s financial system, and it reinforces the demand for transparent, world-class custodial solutions. The combination of market reforms, investor appetite, and Absa’s own African footprint and technology offering makes Uganda a very attractive market at this point in time. In fact, many of our clients have already been asking when we are going live here, because they are ready to channel flows through Uganda. That is very encouraging.
The second part of my response is about risk. While it is exciting to see these inflows, we cannot lose sight of regulatory oversight and operational risk. Custody is a highly technical product, and risk management is central to its success. That’s why it’s critical to ensure alignment between Uganda’s regulatory framework, Africa’s regional standards, and global best practice—so that the system works seamlessly and without friction. For us, that alignment is key to building a sustainable future for Uganda’s custodial and capital markets.
A recurring theme across many industries is that Africa is said to be ‘open’ under the AfCFTA, yet in practice, barriers still exist—often around regulation and integration. Given Absa’s presence across multiple markets, what specific adjustments would you say Uganda needs to make to better align with regional partners and major global capital sources? In other words, what regulatory or structural changes are most critical for Uganda to attract more inflows and build investor confidence?
From a custody perspective, one of the biggest challenges has been limited market integration, and that directly impacts investor confidence. International investors are increasingly looking for markets that can provide real-time updates, seamless processes, and consistent standards. Without that integration, Uganda risks being overlooked.
The good news is that the industry is already moving in the right direction. Integration efforts currently underway will be a key enabler in attracting more international flows. The other challenge has been market fragmentation, but here, too, progress is being made. At the Central Securities Depository (CSD) level, for example, we are seeing active discussions between South Africa, Botswana, Uganda, and other markets. These engagements are critical because they allow us to align regulatory practices across countries, ensuring they are fit for purpose and consistent with global norms.
Ultimately, greater integration and alignment will not only make it easier to do business but also give international investors the confidence that Uganda is a market where their capital will be safe, efficient, and well-managed.
As we wrap up, what are your parting thoughts? What final message would you like to leave with Uganda’s investors, regulators, and the wider public about Absa’s return to custody services and your long-term commitment to this market?
Our return to custody is a deliberate and strategic decision. It’s not just about reintroducing a product—it’s about demonstrating our long-term commitment to Uganda’s capital markets and to the country’s economic growth. We see custody as a catalyst: it strengthens investor confidence, facilitates capital flows, and creates the foundations for deeper, more resilient markets.
Going forward, we intend to work hand in hand not only with regulators but with all industry stakeholders to shape the right agenda for Uganda. At the same time, what we are building is bigger than one market. Absa’s vision is Pan-African—connecting investors across borders and creating opportunities that benefit not just Uganda, but the region as a whole. Together, we can unlock the full potential of Africa’s capital markets.
