Members of Parliament on the finance committee have approved the Shs6.4 billion budget for the Capital Markets Authority (CMA) for the Financial Year 2022/2023.
Led by the Minister of State Finance (Planning), Hon Amos Lugoloobi, the CMA leadership appeared before the committee on Wednesday, 19 January 2022 to present the authority’s budget priorities for the Financial Year 2022/2023.
The authority cited a budget shortfall of Shs963 million, arising from underfunded priorities including; investor and issuer outreach programmes which requires an additional Shs583 million.
The authority further requested additional funding of Shs220 million for nationwide media campaigns and Shs160 million for stakeholder engagements.
Committee vice chairperson, Hon Jane Pacuto, called on her counterparts to support the authority’s plea to ensure that government covers the underfunded priorities, especially public education programmes.
She argued that public education as a mandate of the authority is key to its success.
“CMA is not a simple subject and we need to be educated and when we are educated and aware, then we shall appreciate and make their work easy. This committee should avail funds for them to do much more than they are doing now,” said Pacuto.
She also encouraged the authority to attract listings from more companies, saying that this will ensure the availability of more resources for both the private and public sectors.
“We need to reduce on external borrowing which has become more commercial to save this country,” Pacuto said.
Hon Paul Omara (Indep. Otuke County) said that the CMA’s performance in the last financial year is remarkable and it justifies the budget request, but advised the authority to focus on mobilising corporate bonds to enable the private sector to access equity funding.
“Government is borrowing a lot of money from commercial banks at very high rates. You should mobilise some of these funds, so that we can rely on domestic savings,” Omara said.
Finance committee chairperson, Hon Keefa Kiwanuka
Bungokho Central MP, Hon Richard Wanda, urged the authority to develop strategies aimed at countrywide awareness of its mandate.
“Many Ugandans might be interested in engaging with the authority but they do not understand what you do. The public education is only concentrated in the capital city – this should spread to all parts of the country,” he said.
The CMA Executive Director, Keith Kalyegira, said that the authority requires Shs167 million to conduct public education activities.
“The authority needs funding to move around the country and sensitise people through radio and television programmes on the opportunities available in the capital markets for both potential investors and potential issuers,” he said.
He added that the public education outreaches will help grow the Collective Investment Scheme (CIS) and Assets Under Management to Shs2 trillion.
“CMA will popularise the use of CIS as a viable saving option for the population. A significant pool of CIS assets will provide an alternative pool of savings for government borrowing, freeing up banks to focus on lending to the real economy,” Kalyegira said.
He added that CMA expects to collect Shs1.2 billion of Non-Tax Revenue in the Financial Year 2022/2023, which will primarily be on account of the increased trading attributed to the new listings.
“We expect Airtel telecommunications to list on the securities exchange in the next financial year,” said Kalyegira.
He revealed that the listing of MTN telecommunications has doubled the domestic market capitalisation at the Uganda Securities Exchange (USE) by Shs4.6 trillion, following the 06 December 2021 commencement of trading of the company’s shares on the Uganda bourse.