KAMPALA, UGANDA – In a pivotal session at the 2nd Annual Financial Symposium today, the Capital Markets Authority (CMA) of Uganda outlined a clear strategic direction for manufacturers seeking to move beyond traditional bank debt and tap into long-term, market-based financing for sustainable growth.

Addressing industry leaders, Mr. Dickson Ssembuya, CMA’s Director of Research & Market Development, detailed how the authority is creating a facilitative regulatory environment specifically designed to help Ugandan businesses, particularly manufacturers, access capital for expansion, innovation, and enhanced competitiveness. He highlighted two key mechanisms that serve as powerful alternatives to conventional loans: the Uganda Securities Exchange (USE) Growth Segment and the newly established Deal Flow Facility.

This move addresses a core challenge for many manufacturers: while bank loans are essential for operational needs, they often come with high collateral requirements, shorter tenors, and restrictive covenants that can stifle long-term strategic investment. Market-based financing, such as raising capital through selling shares (equity) or issuing bonds (debt), offers a more flexible, “patient” source of funding.

The USE Growth Enterprise Market Segment (GEMS)

Mr. Ssembuya explained that the GEMS platform on the stock exchange is specifically tailored for high-potential Small and Medium Enterprises (SMEs), which form the backbone of Uganda’s manufacturing sector. Recognizing that young, growing companies cannot meet the stringent requirements of the main stock market, GEMS offers a more accessible path to raising substantial capital.

For a manufacturer, listing on GEMS can provide the funds needed for major capital expenditures—like acquiring new machinery or building a new production facility—by selling a minority stake to the public or institutional investors. This equity financing does not require pledging assets as collateral and brings on new partners who are invested in the company’s long-term success.

The Deal Flow Facility: Getting Investment-Ready

A significant barrier for many businesses seeking to access capital markets is a lack of “investment readiness.” Acknowledging this, Mr. Ssembuya detailed the “Deal Flow Facility,” an innovative partnership between CMA, the European Union (EU), and Financial Sector Deepening Uganda (FSDU).

This facility acts as a crucial preparatory program to help manufacturers become more attractive to investors. It provides targeted technical assistance and advisory to help companies:

• Strengthen corporate governance structures.
• Improve financial record-keeping and reporting standards.
• Develop robust business plans and growth strategies.

By taking businesses through this process, the Deal Flow Facility creates a pipeline of credible, well-structured companies ready to attract both public market funding through the USE and private investments from venture capital and private equity firms.

The CMA’s proactive, two-pronged approach signals a transformative shift in the financing landscape for Ugandan manufacturers. By not only regulating but actively preparing businesses for investment, the Authority is building the necessary infrastructure for manufacturers to secure the long-term capital required to scale their operations, innovate, and compete effectively on a regional and global stage.