Uganda bourse turnover surges

The Uganda economy is facing significant challenges as market turnover at the Uganda bourse surged to $509.123 from $19.455 in just one day. The sharp increase was accompanied by a 1.32% jump in Stanbic Uganda share prices to UGX 770. At the same time, the Uganda Bureau of Statistics reported a 7.1% increase in food crop prices, up from 1.7% in October. This rise is attributed to a prevailing drought that has led to a shortage of food in the country, sparking fears of food scarcity. To shed light on these developments and more market insights, Catherine Namujjuzi, Compliance Officer at Crested Capital, joined CNBC Africa for a discussion from Uganda. One of the key topics of discussion was the recent cut in benchmark lending rates by the central bank to stimulate economic activity. Namujjuzi explained that the move aims to boost the private sector, which had been experiencing slow growth due to government crowding out credit. By making lending more affordable, the central bank hopes to encourage more business activities, particularly essential as the country grapples with food shortages. The drought in Uganda has been a pressing issue, with estimates suggesting that 1.8 million people could face hunger if the situation persists. Namujjuzi highlighted the government's actions to restrict food exports to alleviate price pressures and expressed optimism about potential increased food production following recent rains. While challenges remain, the hope is that the agricultural sector will recover in the first quarter of 2017. Looking ahead to 2017, the discussion shifted to insurance firms gearing up to support the oil industry in Uganda. Namujjuzi noted that collaboration among insurance companies and strategic positioning by financial institutions like Stanbic Bank bode well for financing oil projects. Despite regulatory uncertainties, the market is optimistic about the role of insurance companies in supporting the oil sector's growth. Addressing the low insurance penetration rate in Uganda, which currently stands at 0.85% with a target of 3% by 2025, Namujjuzi emphasized the need for greater appreciation of insurance products and regulatory measures to drive uptake. She highlighted the importance of investor awareness and government support to encourage more companies, especially in the informal sector, to adopt insurance policies. As Uganda navigates these economic challenges and uncertainties, stakeholders across various sectors will need to collaborate and innovate to ensure sustainable growth and resilience in the face of evolving market conditions. The coming year will undoubtedly pose both opportunities and challenges for Uganda's economy, requiring proactive measures and strategic planning to mitigate risks and capitalize on potential growth avenues.