Capital markets option for non-entrepreneurial says Maggie Kigozi

Former Executive Director of Uganda Investment Authority Dr. Maggie Kigozi has urged those with investment capital but no time to start a business to inject it into capital markets.

According to Dr. Kigozi who has invested in different sectors, including farming, capital markets are one of the better options for growing the value of money. 

“If you don’t have time to start a business, maybe you have the money and you want it to grow, so you can contribute by buying some shares in any companies on the stock exchange,” Dr. Kigozi told me.

A capital market is a financial market in which long-term debt or equity-backed securities are bought and sold. 

Capital markets channel the wealth of savers to those who can put it to long-term productive use, such as companies or governments making long-term investments.

Capital markets play a significant role in mobilizing resources and diverting them in productive channels as it facilitates and encourages the procedure of economic growth in the country. 

However, first-time investors will struggle with a few challenges like information overload, unknown risks, limited capital, over-diversification, bad timing, among others.

According to Dr. Kigozi, the problem here in Uganda is that capital markets are relatively young since a lot of people do not understand how they work.

“There are few companies that have registered on it and the owners of the companies aren’t so sure what it is and how it can help you. But the way it is supposed to help you in your company is having access to money, which you can use to grow your company by selling off some shares and share profits with the shareholders who are able to give you their money,” she explained.

Currently, there are nine domestic companies listed on the Uganda Securities Exchange (USE), with the other eight being cross-border listings, bringing the total number of companies currently trading in the bourse to a paltry 17

It should be recalled that Uganda was ranked as the world’s most entrepreneurial country by Global Entrepreneurship Monitor (GEM) in 2014, recording the highest youth entrepreneurs with 55.6 percent of the youth population involved in new or established businesses, and this is the same energy required of Ugandans and other African countries to invest in capital markets as it is the next stage of its development.