Uganda Climbs to 3rd Position in Africa’s Financial Markets Rankings, Takes Lead across East Africa Uganda overtakes Nigeria to rank third in Africa’s financial markets, driven by balanced gains across all six pillars and renewed momentum to deepen capital markets and mobilise long term savings.

Uganda has moved up to third position in Africa’s financial markets rankings, overtaking Nigeria and consolidating its position as the leading financial market in East Africa.

According to the Absa Africa Financial Markets Index 2025, Uganda now ranks behind only South Africa and Mauritius on the continent, marking a significant shift in Africa’s financial markets hierarchy and underscoring the impact of sustained, multi-year reform across all six pillars of market development.

This upward movement reflects a long reform trajectory that has prioritised institutional credibility, market openness, and resilience over scale.

Uganda’s composite score of 66 places it ahead of Nigeria, which scored 65, and well above other East African peers, whose performance remains uneven across the six pillars assessed by the index.

Uganda’s rise has been driven by consistent progress across all pillars rather than dominance in any single category.

Under the market depth pillar, Uganda continues to build gradually, with a score of 45 reflecting the steady expansion of its government securities market, improving liquidity conditions, and modest but growing product diversity.

While Uganda’s equity market remains relatively small, the depth of its domestic bond market and the extension of its yield curve have strengthened price discovery and market functioning.

By contrast, Kenya continues to lead East Africa on market depth, driven by the scale of its banking sector and the size of the Nairobi Securities Exchange.

Kenya’s market depth score of 34, however, reflects recent pressures linked to declining equity valuations, lower liquidity, and heightened sovereign exposure within the financial system.

Uganda’s smaller but more stable market structure has therefore translated into stronger risk-adjusted outcomes.

Tanzania’s market depth score of 50 reflects progress in product diversification, including the issuance of sovereign sukuk and infrastructure bonds.

However, limited secondary market activity and a narrow investor base continue to constrain the depth and liquidity of its capital markets.

Rwanda, with a market depth score of 31, remains constrained by scale, reflecting a small banking system and limited capital market instruments.

Access to foreign exchange has emerged as a defining pillar for Uganda’s improved ranking. Uganda scored 70 under this pillar, reflecting reforms aimed at liberalising the FX market, improving interbank liquidity, and strengthening reporting standards.

These reforms have reduced friction for investors and supported smoother capital flows, contributing significantly to Uganda’s overall score.

Nigeria recorded one of the strongest gains under this pillar, climbing sharply following comprehensive FX market reforms.

However, despite Nigeria’s improvement, Uganda’s more stable FX environment and lower volatility supported stronger consistency across the index.

Kenya scored 64 under the FX access pillar, reflecting relatively deep FX markets but ongoing pressure from currency volatility and external financing constraints.

Tanzania and Rwanda scored 58 and 57 respectively under this pillar.

While both countries maintain functioning FX markets, lower liquidity and episodic administrative frictions weighed on ease of access and investor confidence relative to Uganda.

Market transparency, tax, and regulatory environment form another pillar underpinning Uganda’s ascent. Uganda recorded a score of 71, reflecting consistent regulatory oversight, improved disclosure practices, and the integration of environmental, social, and governance considerations into supervisory frameworks.

The Bank of Uganda’s move to integrate ESG compliance into its supervisory process strengthened institutional credibility and transparency.

Kenya continues to perform strongly on this pillar, scoring 87, supported by advanced regulatory frameworks and its role as a regional financial hub.

However, frequent tax and policy adjustments have introduced uncertainty, which weighed on its overall composite ranking.

Rwanda also performs well on regulatory efficiency, scoring 74, reflecting strong institutional capacity and policy coordination.

Tanzania scored 73 under this pillar, supported by ongoing reforms, while Nigeria scored 86 following improvements in market transparency and regulatory clarity.

Uganda’s strength lies not in leading this pillar, but in maintaining consistent and predictable regulatory conditions over time.

Pension fund development represents a critical pillar in assessing domestic investor capacity.

While Uganda does not lead the continent on this measure, the steady growth of its pension and insurance sectors has strengthened domestic demand for government securities and supported market resilience.

This growing institutional base has reduced reliance on volatile foreign portfolio flows and improved market stability.

Kenya continues to dominate this pillar regionally, supported by a larger pension industry and higher assets under management.

However, increased exposure to government securities has elevated concentration risks.

Tanzania and Rwanda trail on pension fund development, reflecting smaller systems and limited participation in capital markets.

Macroeconomic environment and transparency remain one of Uganda’s strongest pillars.

Uganda recorded a score of 85, placing it among the top performers on the continent and jointly leading within East Africa.

Strong macro data standards, credible monetary policy, and relatively contained volatility supported Uganda’s performance, particularly during a period of global financial tightening.

Tanzania matched Uganda with a score of 85 under this pillar, reflecting prudent fiscal management and relatively low public debt.

Kenya scored 75, reflecting macro pressures linked to high debt levels and fiscal consolidation.

Rwanda scored 73, supported by macro stability but constrained by external vulnerabilities.

Legal standards and enforceability represent another area of significant progress for Uganda.

Uganda scored 90 under this pillar, following reforms expanding the use of global master agreements and advancing close-out netting legislation.

These changes enhanced legal certainty, reduced counterparty risk, and strengthened confidence among market participants.

Nigeria also scored 90, reflecting strong legal frameworks, while Kenya lagged with a score of 55, reflecting slower progress on netting enforceability.

Rwanda recorded notable improvements under this pillar, scoring 70 after adopting key legal reforms, while Tanzania remained lower at 25, reflecting limited enforceability of standard financial contracts.

Across East Africa, Uganda’s leadership reflects its ability to perform consistently across all six pillars.

Kenya remains the region’s largest and most innovative market but faces macro and fiscal pressures that weigh on its composite score.

Tanzania demonstrates strength in macro stability and product diversification but lags on legal and market depth pillars.

Rwanda excels in regulatory efficiency and legal reform but remains constrained by scale.

What industry leaders say

Uganda’s rise in Africa’s financial markets rankings has been matched by renewed policy focus on deepening capital markets and mobilising long term savings. Speaking at the Absa Africa Financial Markets Index and Economic Outlook Forum, Bank of Uganda Governor Michael Atingi Ego underscored the urgency of strengthening market depth to support sustained growth.

The Governor said Uganda must bring more capital, liquidity, and institutional participants into the system, particularly as the country prepares for oil revenues.

He warned that “an oil windfall managed by a shallow financial market is not an opportunity, it is a vulnerability.”

He called on government to fast track pension sector reforms and emphasised the role of regulators in mobilising long term domestic savings. “Sustained growth must be matched with deeper, more inclusive capital markets,” he said.

The forum coincided with the release of the Absa Africa Financial Markets Index, which ranks Uganda among Africa’s top performing financial markets.

Uganda’s progress reflects improvements in market stability, regulatory credibility, and institutional coordination.

The Chief Guest, Permanent Secretary to the Treasury Ramathan Ggoobi, commended regulators and market institutions for Uganda’s strong showing, noting the country’s rise to fourth place on the index.

He said the results reflect disciplined macroeconomic management and policy consistency.

Ggoobi stressed that the next phase of progress requires deliberate market deepening.

Priorities include rebuilding capital markets that provide long term debt and equity financing and attracting venture capital to support higher risk innovation with lower collateral requirements.

He also highlighted the need to explore an SME focused stock exchange to support firms that do not yet meet main board listing thresholds.

“Even in a period of tighter financial conditions and global uncertainty, opportunity still exists for economies that stay disciplined,” he said.

Ggoobi reaffirmed that Uganda remains on a strong growth path, with expansion projected between 6.5 percent and 7 percent in 2026, even in an election year.

Uganda continues to rank among the fastest growing economies in the region, supported by prudent macroeconomic policy.

Absa Uganda Managing Director David Wandera highlighted improving macroeconomic fundamentals, noting that inflation remains below the Bank of Uganda’s five percent target. The Central Bank Rate has been held at 9.75 percent, supporting stability.

He added that the Uganda Shilling ranks among the more stable currencies on the continent, reinforcing investor confidence. “Uganda’s financial markets are no longer just growing, they are stabilizing with confidence,” Wandera said.