Liberalisation of pensions to boost securities


Aocates for the pending liberalisation of the pensions sector have argued that the move will spur growth of the stock exchange markets in the country.

Opening up the sector to competition, they argue will strengthen the Uganda Securities Exchange (USE) and even attract more foreign firms for listing.
Speaking at a Pensions workshop for journalists in Kampala last week, Mr George Mulindwa, the business development manager African Alliance, one of the few licenced Fund managers, said Uganda’s capital markets is still under developed, largely attributed to low investments.

The firm currently manages up to Shs140 billion in pension funds.
“Pensions liberalisation can yield a vibrant capital markets which can even in the future yield the success of public private partnerships to the extent that returns can be used to finance some of government’s proposed key infrastructures,” Mr Mulindwa said.

Currently, he said, the local capital markets is dominated by the mandatory contributions provident fund-The National Social Security Fund with an estimated asset size of Shs4.5 trillion, but its propositions to invest are inhibited by red tape administrative approvals.

“Given this growth pattern, the fund assets are expected to be upwards of Shs6 trillion in the next five years but other than the interests generated for contributors how else is the money benefiting the country? But with other players on board there will be room for investments in equities and other ventures in consultation with the regulator.”

SOURCE: Daily Monitor

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